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Headwater Exploration
(TSX:HWX)
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Rating:78Outperform
Price Target:
C$15.50
â–²(8.39% Upside)
Action:Reiterated
Date:07/25/26
The score is driven primarily by strong financial performance—especially the exceptionally low leverage and solid profitability—supporting downside resilience. Technicals are positive with price above major moving averages, but overbought readings temper the outlook. Valuation is the main headwind due to a high P/E, only partly offset by the dividend yield.
Positive Factors
Strong Profitability
High gross and net margins indicate that Headwater converts production into substantial earnings, providing internal funding capacity and a buffer against cost inflation or moderate commodity-price pressure over the medium term.
Negative Factors
Weak Free Cash Flow Conversion
Although operating cash flow is strong, a relatively small portion becomes free cash flow after reinvestment and working-capital needs. This can limit distributions and constrain flexibility when development spending remains elevated.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Profitability
High gross and net margins indicate that Headwater converts production into substantial earnings, providing internal funding capacity and a buffer against cost inflation or moderate commodity-price pressure over the medium term.
Read all positive factors
Headwater Exploration (HWX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$3.38B
Dividend Yield3.16%
Average Volume (3M)669.08K
Price to Earnings (P/E)18.2
Beta (1Y)0.45
Revenue Growth12.71%
EPS Growth0.77%
CountryCA
Employees39
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.78
Shares Outstanding237,762,880
10 Day Avg. Volume755,850
30 Day Avg. Volume669,080
Financial Highlights & Ratios
PEG Ratio-0.73
Price to Book (P/B)2.98
Price to Sales (P/S)4.33
P/FCF Ratio19.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$15.56Price Target Upside8.83% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)1.25
Revenue Forecast (FY)C$782.50M
Headwater Exploration Business Overview & Revenue Model
Company Description
Headwater Exploration Inc. is a smaller-scale resource firm primarily focused on discovering, developing, and extracting petroleum and natural gas. Its activities are concentrated within the Western Canadian Sedimentary Basin and onshore regions o...
How the Company Makes Money
Headwater Exploration primarily makes money by producing and selling crude oil (and any associated natural gas and natural gas liquids, if produced) from its operated oil and gas wells. Revenue is generated when produced volumes are sold to third-...
Headwater Exploration Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
96
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 668.36M | 514.29M | 619.80M | 425.55M | 458.38M | 190.94M |
| Gross Profit | 359.85M | 245.11M | 332.06M | 193.33M | 266.00M | 108.10M |
| EBITDA | 368.22M | 330.14M | 372.81M | 324.89M | 291.97M | 95.66M |
| Net Income | 186.16M | 153.21M | 188.03M | 156.07M | 162.11M | 45.83M |
Balance Sheet | ||||||
| Total Assets | 1.10B | 995.17M | 952.64M | 836.34M | 734.74M | 488.81M |
| Cash, Cash Equivalents and Short-Term Investments | 87.66M | 102.00M | 142.69M | 146.05M | 175.45M | 114.70M |
| Total Debt | 1.78M | 14.04M | 15.64M | 842.00K | 861.00K | 1.55M |
| Total Liabilities | 283.21M | 247.01M | 253.18M | 225.84M | 191.41M | 91.02M |
| Stockholders Equity | 814.45M | 748.15M | 699.46M | 610.50M | 543.34M | 397.79M |
Cash Flow | ||||||
| Free Cash Flow | 102.24M | 112.02M | 93.87M | 63.25M | 35.00M | -28.73M |
| Operating Cash Flow | 335.16M | 299.14M | 316.74M | 303.32M | 283.93M | 111.66M |
| Investing Cash Flow | -253.02M | -227.88M | -226.85M | -243.71M | -232.06M | -109.13M |
| Financing Cash Flow | -117.89M | -112.29M | -93.24M | -89.00M | 8.88M | 35.40M |
Headwater Exploration Technical Analysis
Positive
14.30
Price Trends
13.13
Positive
12.88
Positive
11.78
Positive
Market Momentum
0.36
Positive
58.45
Neutral
57.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HWX, the sentiment is Positive. The current price of 14.3 is above the 20-day moving average (MA) of 13.97, above the 50-day MA of 13.13, and above the 200-day MA of 11.78, indicating a bullish trend. The MACD of 0.36 indicates Positive momentum. The RSI at 58.45 is Neutral, neither overbought nor oversold. The STOCH value of 57.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:HWX.
Headwater Exploration Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | C$2.77B | 3.55 | 27.68% | 5.35% | 13.63% | 361.28% | |
78 Outperform | C$3.38B | 18.23 | 24.24% | 3.16% | 12.71% | 0.77% | |
71 Outperform | C$2.89B | 20.56 | 13.88% | 6.14% | 0.67% | 11.91% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
63 Neutral | C$1.85B | 21.79 | 4.91% | 17.95% | 6.20% | 55.63% | |
62 Neutral | C$2.72B | -6.00 | -19.54% | 2.98% | -2.21% | -142.44% | |
62 Neutral | C$1.78B | 18.89 | 4.22% | 1.85% | 10.48% | 23.40% |
* Energy Sector Average
TSE:HWX
Headwater Exploration
14.22
7.62
115.45%
TSE:AAV
Advantage Energy
11.06
-0.32
-2.81%
TSE:VET
Vermilion Energy
17.77
7.95
80.99%
TSE:BIR
Birchcliff Energy
6.50
0.47
7.78%
TSE:FRU
Freehold Royalties
17.60
5.22
42.21%
TSE:PXT
Parex Resources
28.76
12.70
79.07%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.