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Approach Resources Inc
AREX : NASDAQ : Basic Materials
$7.34 -0.39 | -5.00%
Today's Range: 7.32 - 8.02
Avg. Daily Volume: 1,823,100
03/02/15 - 2:55 PM ET

Financial Analysis


APPROACH RESOURCES INC's gross profit margin for the fourth quarter of its fiscal year 2014 has decreased when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not.

During the same period, stockholders' equity ("net worth") has increased by 8.98% from the same quarter last year.

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Income Statement Q4 FY14 Q4 FY13
Net Sales ($mil)55.0758.57
EBITDA ($mil)33.640.17
EBIT ($mil)4.9318.16
Net Income ($mil)26.9964.32


Balance Sheet Q4 FY14 Q4 FY13
Cash & Equiv. ($mil)0.4366.11
Total Assets ($mil)1401.431145.48
Total Debt ($mil)400.0250.0
Equity ($mil)774.33710.5


Profitability Q4 FY14 Q4 FY13
Gross Profit Margin76.8683.86
EBITDA Margin61.068.58
Operating Margin8.9631.01
Sales Turnover0.180.16
Return on Assets4.06.3
Return on Equity7.2510.16
Debt Q4 FY14 Q4 FY13
Current Ratio0.571.07
Debt/Capital0.340.26
Interest Expense5.725.23
Interest Coverage0.863.48


Share Data Q4 FY14 Q4 FY13
Shares outstanding (mil)39.3439.05
Div / share0.00.0
EPS0.681.65
Book value / share19.6818.2
Institutional Own % n/a n/a
Avg Daily Volume1797710.01385232.0

Valuation


HOLD. APPROACH RESOURCES INC's P/E ratio indicates a significant discount compared to an average of 22.70 for the Oil, Gas & Consumable Fuels industry and a significant discount compared to the S&P 500 average of 19.92. For additional comparison, its price-to-book ratio of 0.39 indicates a significant discount versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 12.65. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, APPROACH RESOURCES INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AREX 5.34 Peers 22.70   AREX 1.67 Peers 12.70

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

AREX is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AREX is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AREX NM Peers 32.77   AREX NM Peers 0.60

Neutral. The absence of a valid price-to-projected earnings ratio happens when a stock can not be valued on the basis of a negative expected future earnings.

AREX's ratio is negative making this valuation measure meaningless.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

AREX's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AREX 0.39 Peers 12.65   AREX -22.71 Peers 37.56

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AREX is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, AREX is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AREX 1.16 Peers 2.27   AREX 42.59 Peers 8.57

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AREX is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

AREX has a sales growth rate that significantly exceeds its peers.

 

 

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