Parex Resources Inc. Fundamental Analysis (TSX: PXT.TO)
Parex Resources Inc. Fundamental Analysis (TSX: PXT.TO)
Parex Resources Inc. (TSX: PXT.TO) shows strong financial fundamentals with a PE ratio of 3.49, profit margin of 53.09%, and ROE of 27.68%. The company generates $1.1B in annual revenue with weak year-over-year growth of -17.43%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 41.5/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze PXT.TO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentPXT.TO demonstrates superior asset utilization.
Valuation Score
ExcellentPXT.TO trades at attractive valuation levels.
Growth Score
WeakPXT.TO faces weak or negative growth trends.
Financial Health Score
ModeratePXT.TO shows balanced financial health with some risks.
Profitability Score
ExcellentPXT.TO achieves industry-leading margins.
Key Financial Metrics
Is PXT.TO Expensive or Cheap?
P/E Ratio
PXT.TO trades at 3.49 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, PXT.TO's PEG of 0.01 indicates potential undervaluation.
Price to Book
The market values Parex Resources Inc. at 0.84 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 2.51 times EBITDA. This is generally considered low.
How Well Does PXT.TO Make Money?
Net Profit Margin
For every $100 in sales, Parex Resources Inc. keeps $53.09 as profit after all expenses.
Operating Margin
Core operations generate 28.46 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $27.68 in profit for every $100 of shareholder equity.
ROA
Parex Resources Inc. generates $13.32 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Parex Resources Inc. generates strong operating cash flow of $411.86M, reflecting robust business health.
Free Cash Flow
Parex Resources Inc. generates strong free cash flow of $190.38M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.98 in free cash annually.
FCF Yield
PXT.TO converts 9.68% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
3.49
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.01
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.84
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.85
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.35
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.88
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.28
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.09
vs 25 benchmark
How PXT.TO Stacks Against Its Sector Peers
| Metric | PXT.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 3.49 | 21.23 | Better (Cheaper) |
| ROE | 27.68% | 1266.00% | Weak |
| Net Margin | 53.09% | 1278.00% | Weak |
| Debt/Equity | 0.35 | -1.82 (disorted) | Distorted |
| Current Ratio | 0.88 | 2.24 | Weak Liquidity |
| ROA | 13.32% | 4418.00% | Weak |
PXT.TO outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Parex Resources Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
139.96%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
272.06%
Industry Style: Cyclical, Value, Commodity
High GrowthFCF CAGR
112.17%
Industry Style: Cyclical, Value, Commodity
High Growth