Evolution Petroleum Corp

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EPM : AMEX : Basic Materials
$5.55 | %
Today's Range: 5.50 - 5.65
Avg. Daily Volume: 46,600
07/22/16 - 4:03 PM ET

Financial Analysis

EVOLUTION PETROLEUM CORP's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income fell significantly; although net income growth outperformed the average competitor in its industry, revenue growth did not. EVOLUTION PETROLEUM CORP has strong liquidity. Currently, the Quick Ratio is 1.86 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 4.45% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)5.117.07
EBITDA ($mil)0.62.4
EBIT ($mil)-0.681.25
Net Income ($mil)-0.130.74

Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)14.0120.39
Total Assets ($mil)70.6765.21
Total Debt ($mil)0.00.0
Equity ($mil)50.2948.14

Profitability Q3 FY16 Q3 FY15
Gross Profit Margin56.8654.68
EBITDA Margin11.7233.89
Operating Margin-13.3517.71
Sales Turnover0.40.35
Return on Assets8.027.22
Return on Equity9.948.39
Debt Q3 FY16 Q3 FY15
Current Ratio1.894.37
Interest Expense0.010.03
Interest Coverage-48.7150.04

Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)32.8932.91
Div / share0.050.05
Book value / share1.531.46
Institutional Own % n/a n/a
Avg Daily Volume47834.070828.0


HOLD. The current P/E ratio indicates a significant discount compared to an average of 71.04 for the Oil, Gas & Consumable Fuels industry and a significant premium compared to the S&P 500 average of 25.03. Conducting a second comparison, its price-to-book ratio of 3.76 indicates a premium versus the S&P 500 average of 2.80 and a significant discount versus the industry average of 11.34. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, EVOLUTION PETROLEUM CORP proves to trade at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
EPM 38.33 Peers 71.04   EPM 19.82 Peers 289.35

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

EPM 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.

EPM is trading at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
EPM 19.83 Peers 35.15   EPM 2.49 Peers 2.07

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

EPM is trading at a valuation on par with its peers.


Premium. 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.

EPM trades at a premium to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
EPM 3.76 Peers 11.34   EPM 25.00 Peers -192.85

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.

EPM is trading at a significant discount to its peers.


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

EPM is expected to have an earnings growth rate that significantly exceeds its peers.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
EPM 6.71 Peers 2.47   EPM 22.01 Peers -25.98

Premium. 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.

EPM is trading at a significant premium to its industry.


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

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



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