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Kosmos Energy Ltd. (KOS)
NYSE:KOS
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Kosmos Energy
(NYSE:KOS)
Rating:57Neutral
Price Target:
$2.00
▲(16.28%Upside)
Positive Factors
Financial Management
Kosmos has confirmed capital expenditure of less than $400 million, representing a significant drop year over year, indicating improved financial management.
Growth Opportunities
The potential expansion of the GTA project could significantly increase capacity and offer future growth opportunities for Kosmos Energy.
Production and Operations
Tortue project is performing ahead of expectations, potentially leading to lower capital expenditures in future phases.
Negative Factors
Debt and Financial Health
Kosmos Energy's ability to reduce its debt is postponed, affecting its financial health and delaying potential benefits for shareholders.
Operating Costs
Higher than expected operating costs are impacting Kosmos Energy's financial outlook, delaying cash return to shareholders.
Production Guidance
Kosmos Energy's 2025 production guidance is below expectations, leading to reduced estimates for future cash flows.
Kosmos Energy (KOS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$779.15M
Dividend YieldN/A
Average Volume (3M)11.01M
Price to Earnings (P/E)4.0
Beta (1Y)1.18
Revenue Growth-11.11%
EPS Growth-105.10%
CountryUS
Employees243
SectorEnergy
Sector Strength45
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)-0.22
Shares Outstanding478,009,060
10 Day Avg. Volume11,226,394
30 Day Avg. Volume11,006,883
Financial Highlights & Ratios
PEG Ratio-0.35
Price to Book (P/B)0.70
Price to Sales (P/S)0.00
P/FCF Ratio-3.35
Enterprise Value/Market Cap4.51
Enterprise Value/Revenue0.50
Enterprise Value/Gross Profit5.33
Enterprise Value/Ebitda0.95
Forecast
1Y Price Target
$4.26Price Target Upside147.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Kosmos Energy Business Overview & Revenue Model
Company DescriptionKosmos Energy Ltd. is an independent oil and gas exploration and production company focused on the Atlantic Margins. The company operates in various sectors, including exploration, development, and production of oil and natural gas resources. Kosmos Energy has a diverse portfolio of assets with operations primarily located in offshore regions of Ghana, Equatorial Guinea, and the U.S. Gulf of Mexico, as well as exploration interests in other promising locations.
How the Company Makes MoneyKosmos Energy generates revenue primarily through the exploration, development, and production of oil and natural gas. The company's key revenue streams include the sale of crude oil, natural gas, and natural gas liquids extracted from its producing fields. Kosmos Energy's financial performance is significantly influenced by global oil prices and production volumes. The company often enters into joint ventures and partnerships with other energy companies and national oil corporations to share exploration and development risks and costs, which can also contribute to its earnings. Additionally, Kosmos Energy may engage in strategic acquisitions or divestitures to optimize its asset portfolio and enhance its revenue potential.
Kosmos Energy Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 8.18%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Positive
Kosmos Energy reported several positive milestones, including the first LNG cargo export from the GTA project and significant cost reductions. However, challenges remain with production in the Gulf of America and higher operating costs. Overall, the highlights outweigh the lowlights, as the company demonstrates financial resilience and operational progress despite the volatile market environment.Q1-2025 Updates
Positive Updates
First LNG Cargo Export from GTA Project
Kosmos Energy successfully exported the first LNG cargo from the GTA project, marking Mauritania and Senegal as new LNG exporting nations. All four trains on the FLNG vessel are operational with production ramping up towards the contracted sales volume equivalent to 2.45 million tonnes of LNG per annum.
Significant Cost Reductions
Kosmos Energy achieved a material reduction in costs, with CapEx expected to fall by over 50% year-on-year. First quarter CapEx was $86 million, which is $200 million lower than the same quarter last year. Additionally, the company is committed to reducing their annual overhead by $25 million by year-end.
Operational Progress in Ghana
Ghana operations saw the completion of a 4D seismic survey and a scheduled Jubilee FPSO shutdown, both completed safely and on budget. Drilling activities are set to increase with two Jubilee wells planned in 2025 and four more in 2026.
Improved Financial Resilience
Kosmos enhanced its financial resilience by refinancing its reserve-based lending facility in 2024, maintaining minimal near-term maturities, and ample liquidity. The company continues to hedge production with 40% of 2025 oil production hedged at a floor of $65 per barrel.
Negative Updates
Production Challenges in Gulf of America
The work over the Winterfell-3 well was unsuccessful, and Kosmos is evaluating a future sidetrack to access those reserves.
Lower Entitlement Production
Entitlement production for the first quarter was slightly lower than guidance, primarily due to the timing of the GTA ramp-up.
Higher Operating Costs
Operating expenses per barrel of oil equivalent were higher year-on-year, reflecting lower production and higher maintenance in Q1 2025.
Company Guidance
In the first quarter of 2025, Kosmos Energy emphasized its focus on cash generation and cost control amid market volatility. Key metrics included a significant reduction in capital expenditures, which fell by over 50% year-on-year, amounting to $86 million. The company also reduced its annual overhead by $25 million and maintained a rolling hedging program, with around 40% of 2025 oil production hedged at a floor of approximately $65 per barrel. Kosmos achieved operational milestones, such as the export of the first LNG cargo from the GTA project, with production ramping up to a contracted sales volume equivalent to 2.45 million tonnes per annum. Additionally, the company plans to drill two Jubilee wells in 2025 and four in 2026, with the goal of delivering further production growth. The financial resilience of the company was bolstered by refinancing activities in 2024, ensuring minimal near-term maturities and ample liquidity.Kosmos Energy Financial Statement Overview
Summary
Kosmos Energy's financial performance is solid with strong profitability and improved financial stability. The reduction in debt and strong cash flow generation are key strengths. However, inconsistent revenue growth presents a challenge. Overall, the company is in a strong financial position with prospects for future growth contingent on maintaining revenue improvements.Income Statement
Kosmos Energy has demonstrated strong profitability with a significant gross profit margin and EBIT margin. The company showed a net profit margin of 11.33% in 2024, indicating healthy profitability. However, revenue growth has been inconsistent, with a decline noted in recent years.75
Positive
Balance Sheet
The company has improved its financial stability by reducing total debt to zero in 2024, enhancing its debt-to-equity ratio. Return on equity is strong at 15.82%, reflecting efficient use of equity. The equity ratio is moderate, indicating a balanced asset financing mix.70
Positive
Cash Flow
Kosmos Energy has shown strong cash flow generation, with substantial free cash flow growth from negative to positive territory in recent years. The operating cash flow to net income ratio is robust, suggesting good operational efficiency. Free cash flow to net income is also positive, supporting reinvestment and debt reduction.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.68B | 1.70B | 2.25B | 1.33B | 804.03M | Gross Profit |
| 568.16M | 866.58M | 1.34B | 518.79M | -20.31M | EBIT |
| 471.18M | 734.62M | 1.12B | 352.03M | -228.03M | EBITDA |
| 896.78M | 930.52M | 938.11M | 531.63M | 175.66M | Net Income Common Stockholders |
| 189.85M | 213.52M | 226.55M | -77.84M | -411.59M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 84.97M | 95.34M | 183.41M | 131.62M | 149.03M | Total Assets |
| 5.31B | 4.94B | 4.58B | 4.94B | 3.87B | Total Debt |
| 2.74B | 2.39B | 2.23B | 2.62B | 2.11B | Net Debt |
| 2.66B | 2.30B | 2.04B | 2.49B | 1.96B | Total Liabilities |
| 4.11B | 3.91B | 3.79B | 4.41B | 3.43B | Stockholders Equity |
| 1.20B | 1.03B | 787.85M | 529.24M | 440.15M |
| Cash Flow | Free Cash Flow | |||
| -255.41M | -167.43M | 321.10M | -563.65M | -183.45M | Operating Cash Flow |
| 678.25M | 765.17M | 1.13B | 374.34M | 196.15M | Investing Cash Flow |
| -966.06M | -994.85M | -703.86M | -973.38M | -345.59M | Financing Cash Flow |
| 274.32M | 141.62M | -414.70M | 624.16M | 69.86M |
Kosmos Energy Technical Analysis
Neutral
1.72
Price Trends
1.86
Negative
2.48
Negative
3.27
Negative
Market Momentum
-0.05
Negative
48.14
Neutral
18.41
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KOS, the sentiment is Neutral. The current price of 1.72 is above the 20-day moving average (MA) of 1.71, below the 50-day MA of 1.86, and below the 200-day MA of 3.27, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 48.14 is Neutral, neither overbought nor oversold. The STOCH value of 18.41 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KOS.
Kosmos Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.05B | ― | ― | ― | ― | ||
67 Neutral | $726.37M | 59.38 | 1.86% | 7.94% | 5.67% | -79.53% | |
64 Neutral | $804.32M | 26.75 | 4.24% | 10.26% | 4.15% | 3.91% | |
58 Neutral | $1.23B | ― | 31.18% | ― | 0.67% | -6298.08% | |
57 Neutral | $779.15M | 4.03 | -1.15% | ― | -11.11% | -105.10% | |
57 Neutral | $7.06B | 3.04 | -3.49% | 5.80% | 0.53% | -50.39% |
* Energy Sector Average
Performance Comparison
KOS
Kosmos Energy
1.72
-4.35
-71.66%
CLMT
Calumet Specialty Products
14.62
-1.51
-9.36%
GRNT
Granite Ridge Resources
5.74
-0.33
-5.44%
VTS
Vitesse Energy, Inc.
21.36
-2.02
-8.64%
INR
Infinity Natural Resources, Inc. Class A
17.19
-4.70
-21.47%
Kosmos Energy Corporate Events
Business Operations and Strategy
Kosmos Energy’s 2024 Drilling Campaign Highlights Success
Positive
Nov 29, 2024
Kosmos Energy Ltd., along with its partners, has concluded its 2024 drilling campaign in Equatorial Guinea after the Akeng Deep exploration well showed sub-commercial hydrocarbon quantities and will be abandoned. Despite this, the campaign was marked by success in the Ceiba and Okume fields, where newly drilled infill wells have exceeded performance expectations, demonstrating promising production outcomes.
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.