Vitesse Energy, Inc. (NYSE: VTS)

Sector: Energy Industry: Oil & Gas E&P CIK: 0001944558
Market Cap 665.31 Mn
P/B 1.27
P/E 25.70
P/S 2.81
ROIC (Qtr) 2.85
Div Yield % 11.87
Rev 1y % (Qtr) 15.72
Total Debt (Qtr) 114.00 Mn
Debt/Equity (Qtr) 0.18
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About

Investment thesis

Bull case

  • Strong operating cash flow of 167.60M provides robust 1.47x coverage of total debt 114M, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 167.60M provides exceptional 16.28x coverage of interest expenses 10.29M, showing strong debt service capability.
  • Operating cash flow of 167.60M provides strong 17.08x coverage of stock compensation 9.81M, indicating sustainable incentive practices.
  • Strong tangible asset base of 932.92M provides 8.18x coverage of total debt 114M, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 167.60M provides 6.36x coverage of SG&A expenses 26.37M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 167.60M barely covers its investment activities of (126.13M), with a coverage ratio of -1.33, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 167.60M provides thin coverage of dividend payments of (85.85M) with a -1.95 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 41.48M provides weak coverage of capital expenditures of 126.13M, with a 0.33 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 39.11M show weak coverage of depreciation charges of 121.89M, with a 0.32 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 121.89M relative to operating cash flow of 167.60M, which is 0.73x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Oil & Gas E&P
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 COP Conocophillips 136.62 Bn 17.10 2.22 23.44 Bn
2 CNQ Canadian Natural Resources Ltd 85.21 Bn 17.67 3.04 12.51 Bn
3 EOG Eog Resources Inc 66.33 Bn -60.48 8.67 8.13 Bn
4 FANG Diamondback Energy, Inc. 49.64 Bn -2,818.83 314.47 16.24 Bn
5 OXY Occidental Petroleum Corp /De/ 37.18 Bn 15.36 2.56 22.88 Bn
6 WDS Woodside Energy Group Ltd 34.64 Bn 11.73 2.51 -
7 TPL Texas Pacific Land Corp 29.74 Bn 126.16 78.66 0.02 Bn
8 DVN Devon Energy Corp/De 18.80 Bn 3.24 1.91 8.55 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.80 1.02
EV to Cash from Ops. EV/CFO 5.25 18.21
EV to Debt EV to Debt 6.54 54.57
EV to EBIT EV/EBIT 14.06 29.98
EV to EBITDA EV/EBITDA 5.02 19.64
EV to Free Cash Flow [EV/FCF] EV/FCF 62.14 39.33
EV to Market Cap EV to Market Cap 1.12 1.57
EV to Revenue EV/Rev 3.14 11.47
Price to Book Value [P/B] P/B 1.27 2.97
Price to Earnings [P/E] P/E 25.70 -25.98
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.24 26.80
Dividend Payout Ratio % Div Payout % (Qtr) 443.70 31.86
Dividend per Basic Share Div per Share (Qtr) 2.22 0.78
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 209.25 1.05
Interest Coverage Int. cover (Qtr) 3.80 -4.97
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 3.21 -533.65
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 129.81 52.06
Dividend Growth (1y) % Div 1y % (Qtr) 7.67 -5.45
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -45.65 6.14
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -6.27 105.89
EBIT Growth (1y) % EBIT 1y % (Qtr) -51.21 75.94
EBT Growth (1y) % EBT 1y % (Qtr) -59.32 17.44
EPS Growth (1y) % EPS 1y % (Qtr) -67.11 3.07
FCF Growth (1y) % FCF 1y % (Qtr) 91.65 -43.36
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -0.75 149.32
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.29 0.33
Cash Payout Ratio Cash Payout (Qtr) 0.29 0.07
Cash Ratio Cash Ratio (Qtr) 0.08 1.32
Current Ratio Curr Ratio (Qtr) 0.85 2.37
Debt to Equity Ratio Debt/Equity (Qtr) 0.18 0.34
Interest Cover Ratio Int Coverage (Qtr) 3.80 -4.97
Times Interest Earned Times Interest Earned (Qtr) 3.80 -4.97
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 59.30 16.19
EBIT Margin % EBIT Margin % (Qtr) 14.42 -16.83
EBT Margin % EBT Margin % (Qtr) 10.62 -24.06
Gross Margin % Gross Margin % (Qtr) 67.90 58.92
Net Profit Margin % Net Margin % (Qtr) 7.70 -28.75