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Civitas Resources (CIVI)
NYSE:CIVI
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Civitas Resources
(NYSE:CIVI)
Rating:75Outperform
Price Target:
$31.00
▲( 12.12% Upside)
Positive Factors
Company Strategy
The appointment of Billy Helms to the Board introduces a well-respected industry veteran, which is seen as a positive move for the company's leadership.
Valuation
Civitas Resources shares are valued at $72, trading at a notable discount to peers, which could present an attractive investment opportunity.
Negative Factors
Financial Performance
CIVI reported disappointing results which missed expectations across nearly all key metrics.
Guidance
The company set its guidance below prior estimates and Consensus for both oil production and total production, while capex guidance was above estimates.
Market Reaction
Investors may have a tough time believing it can achieve the guidance following disappointing execution over the past few quarters.
Civitas Resources (CIVI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.56B
Dividend Yield7.24%
Average Volume (3M)2.02M
Price to Earnings (P/E)3.2
Beta (1Y)1.46
Revenue Growth22.14%
EPS Growth5.69%
CountryUS
Employees655
SectorEnergy
Sector Strength42
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)1.77
Shares Outstanding92,579,895
10 Day Avg. Volume1,840,476
30 Day Avg. Volume2,020,834
Financial Highlights & Ratios
PEG Ratio-0.19
Price to Book (P/B)0.40
Price to Sales (P/S)0.00
P/FCF Ratio2.87
Enterprise Value/Market Cap2.73
Enterprise Value/Revenue0.36
Enterprise Value/Gross Profit3.62
Enterprise Value/Ebitda0.54
Forecast
1Y Price Target
$44.58Price Target Upside61.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Civitas Resources Business Overview & Revenue Model
Company DescriptionCivitas Resources, Inc. (CIVI) is a leading independent oil and gas company engaged in the exploration, development, and production of oil and natural gas properties. Headquartered in Denver, Colorado, the company primarily operates in the Denver-Julesburg (DJ) Basin, a prolific hydrocarbon region. Civitas Resources focuses on optimizing its asset base to deliver sustainable energy solutions while maintaining a strong commitment to environmental stewardship and community engagement.
How the Company Makes MoneyCivitas Resources generates revenue primarily through the sale of crude oil, natural gas, and natural gas liquids (NGLs) extracted from its operations in the DJ Basin. The company's revenue model is centered around the exploration and production activities, where it drills and completes wells to extract hydrocarbons. Civitas Resources benefits from strategic partnerships and joint ventures that enhance its operational efficiency and access to technology and expertise. The company's earnings are influenced by factors such as commodity prices, production volumes, and operational costs. Additionally, Civitas Resources may engage in hedging activities to manage commodity price risks and stabilize cash flows.
Civitas Resources Financial Statement Overview
Summary
Civitas Resources exhibits strong financial health with substantial revenue and cash flow growth. The company has a solid balance sheet with low leverage, although some operational challenges are noted in the EBIT margins.Income Statement
Civitas Resources has shown robust revenue growth, with a significant increase from $930.61 million in 2021 to $5.21 billion in 2024, marking a strong upward trajectory. The gross profit margin is exceptionally high at 99.40% for 2024, indicating efficient cost management. Net profit margin improved to 16.11% in 2024 from 8.40% in 2021, demonstrating enhanced profitability. However, the EBIT margin dropped significantly to 0.08% in 2024, reflecting potential operational challenges.85
Very Positive
Balance Sheet
The company maintains a strong equity base with a 44.35% equity ratio in 2024, highlighting financial stability. The debt-to-equity ratio has improved, moving to 0.00 in 2024 from 0.86 in 2020, indicating a reduction in leverage and a stronger balance sheet. Return on equity has decreased slightly to 12.65% in 2024 from 13.63% in 2022, impacted by lower net income relative to equity growth.78
Positive
Cash Flow
Civitas Resources has demonstrated significant growth in free cash flow, increasing from $121.85 million in 2021 to $2.87 billion in 2024, reflecting strong cash generation capabilities. The operating cash flow to net income ratio is robust at 3.42 in 2024, indicating efficient conversion of earnings to cash. Free cash flow to net income ratio is high at 3.42, emphasizing strong cash flow relative to profitability.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.20B | 3.48B | 3.79B | 930.61M | 218.09M | Gross Profit |
| 2.14B | 1.39B | 2.18B | 504.25M | 69.22M | EBIT |
| 1.51B | 1.22B | 2.05B | 421.48M | 37.80M | EBITDA |
| 3.60B | 2.34B | 2.52B | 589.30M | 173.61M | Net Income Common Stockholders |
| 838.72M | 784.29M | 1.25B | 178.92M | 103.53M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 75.83M | 1.12B | 768.03M | 254.45M | 24.74M | Total Assets |
| 14.94B | 14.10B | 7.97B | 6.74B | 1.18B | Total Debt |
| 4.49B | 4.96B | 418.08M | 531.98M | 30.02M | Net Debt |
| 4.42B | 3.84B | -349.95M | 277.53M | 5.28M | Total Liabilities |
| 8.32B | 7.92B | 2.60B | 2.09B | 137.56M | Stockholders Equity |
| 6.63B | 6.18B | 5.37B | 4.65B | 1.05B |
| Cash Flow | Free Cash Flow | |||
| 893.36M | 729.63M | 1.13B | 121.85M | 95.00M | Operating Cash Flow |
| 2.87B | 2.24B | 2.48B | 274.60M | 158.80M | Investing Cash Flow |
| -2.67B | -5.24B | -1.31B | 73.55M | -63.80M | Financing Cash Flow |
| -1.24B | 3.36B | -657.37M | -118.44M | -81.25M |
Civitas Resources Technical Analysis
Negative
27.65
Price Trends
30.15
Negative
37.95
Negative
44.52
Negative
Market Momentum
-0.49
Negative
43.76
Neutral
12.89
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIVI, the sentiment is Negative. The current price of 27.65 is below the 20-day moving average (MA) of 28.58, below the 50-day MA of 30.15, and below the 200-day MA of 44.52, indicating a bearish trend. The MACD of -0.49 indicates Negative momentum. The RSI at 43.76 is Neutral, neither overbought nor oversold. The STOCH value of 12.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CIVI.
Civitas Resources Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.56B | 3.17 | 12.73% | 7.24% | 22.14% | 5.69% | |
72 Outperform | $2.65B | 3.25 | 20.28% | 3.36% | 26.04% | 11.96% | |
70 Outperform | $2.85B | 14.72 | 19.93% | 11.13% | -12.71% | -39.85% | |
63 Neutral | $3.46B | 16.69 | -16.01% | ― | 10.44% | -139.05% | |
61 Neutral | $2.58B | 32.85 | 2.86% | 8.19% | 7.18% | ― | |
57 Neutral | $7.06B | 3.07 | -3.45% | 5.82% | 0.59% | -50.58% | |
55 Neutral | $2.72B | 23.27 | -3.54% | 5.57% | 31.58% | -114.70% |
* Energy Sector Average
Performance Comparison
CIVI
Civitas Resources
27.65
-38.97
-58.50%
SM
SM Energy
23.17
-23.83
-50.70%
BSM
Black Stone Minerals
13.49
-0.65
-4.60%
STR
Sitio Royalties
17.18
-4.11
-19.30%
GPOR
Gulfport Energy
194.68
36.46
23.04%
CRGY
Crescent Energy Company Class A
8.54
-3.30
-27.87%
Civitas Resources Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 2.29%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with notable efforts to optimize costs and maintain a strong financial position through hedging and strategic planning. However, production challenges and increased operating costs were significant concerns. The company's strategy to focus on cost efficiency and growth in the Permian Basin is encouraging, yet market volatility and operational hurdles in the DJ Basin and Permian posed challenges.Q1-2025 Updates
Positive Updates
Cost Optimization and Efficiency Plan
Civitas announced a comprehensive cost optimization and efficiency plan to generate an incremental $100 million of annual free cash flow, with 40% of this benefiting the second half of 2025.
Strong Hedge Position
The company significantly expanded its hedge position, now nearly 50% hedged on crude oil for the remainder of the year, with a hedge value of nearly $200 million.
Leadership Addition
Clay Carrell was introduced as the new President and Chief Operating Officer, bringing deep operating experience and proven leadership to Civitas.
Permian Basin Growth
Civitas expects oil production to grow by 5% in the second quarter, led by growth in the Permian Basin.
Share Repurchase Program
The company completed its existing 10b5 repurchase program, buying back nearly 2% of its shares outstanding.
Negative Updates
First Quarter Production Decline
First quarter production was slightly lower than expectations due to lower capital and weather-related impacts.
Increased Operating Costs
Cash operating costs were higher than planned due to operational challenges with contracted water takeaway in the Permian.
DJ Basin Production Challenges
First quarter volumes reflected a prolonged period with few turn-in-lines, resulting in a significant decline in DJ Basin volumes.
Asset Divestment Challenges
Challenges in the upstream market affected the ability to divest assets, with the company emphasizing they won't be 'price takers.'
Company Guidance
In the first quarter 2025 earnings call for Civitas Resources, the company provided key guidance and metrics related to its financial and operational strategy amid a volatile market environment. Civitas announced a reduction of $150 million in capital expenditures compared to 2024, focusing on capital discipline and lower reinvestment rates. The company aims to generate an additional $100 million in annual free cash flow through a comprehensive cost optimization and efficiency plan, with $15 million anticipated from a new oil gathering agreement in the DJ Basin. Civitas is also targeting a year-end 2025 net debt of $4.5 billion, supported by a nearly 50% hedge on crude oil and planned investment proceeds of $300 million. Despite slightly lower production and higher operating costs in Q1, Civitas expects a 5% production growth in Q2, primarily from the Permian Basin, while maintaining confidence in its full-year guidance. The company remains focused on debt reduction, cost management, and shareholder returns, with an unchanged base dividend and a completed 10b5 repurchase program amounting to nearly 2% of shares outstanding.Civitas Resources Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Civitas Resources Appoints New President and COO
Positive
May 7, 2025
On May 7, 2025, Civitas Resources appointed Clayton A. Carrell as President and Chief Operating Officer, effective immediately. Carrell brings over 35 years of experience in the oil and gas industry, having previously held leadership roles at Southwestern Energy and EP Energy. His appointment is expected to enhance Civitas’ operational capabilities and strategic execution, particularly in the Permian and DJ Basins, as the company focuses on delivering value for shareholders through its scaled development programs.
Executive/Board ChangesBusiness Operations and Strategy
Civitas Resources Expands Board and Adjusts Leadership
Neutral
Feb 24, 2025
On February 24, 2025, Civitas Resources expanded its board of directors from nine to ten members and appointed Lloyd W. ‘Billy’ Helms, Jr. as the new director. Mr. Helms, with over 40 years of experience in the oil and gas industry, will serve on the Sustainability and Audit Committees and is recognized for his operational and technical expertise. Concurrently, the company terminated the employment of its Chief Operating Officer, T. Hodge Walker, and Chief Transformation Officer, Jeffrey S. Kelly, without cause. M. Christopher Doyle, the current President and CEO, assumed the additional role of principal operating officer. These changes reflect Civitas Resources’ strategic adjustments in its leadership to enhance operational efficiency and governance.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.