Western Midstream Partners, LP
Western Midstream Partners, LP Fundamental Analysis
Western Midstream Partners, LP (WES) shows strong financial fundamentals with a PE ratio of 14.07, profit margin of 30.43%, and ROE of 34.44%. The company generates $3.9B in annual revenue with strong year-over-year growth of 16.06%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 63.4/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze WES's fundamental strength across five key dimensions:
Efficiency Score
WeakWES struggles to generate sufficient returns from assets.
Valuation Score
ExcellentWES trades at attractive valuation levels.
Growth Score
ExcellentWES delivers strong and consistent growth momentum.
Financial Health Score
ModerateWES shows balanced financial health with some risks.
Profitability Score
ExcellentWES achieves industry-leading margins.
Key Financial Metrics
Is WES Expensive or Cheap?
P/E Ratio
WES trades at 14.07 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, WES's PEG of -1.23 indicates potential undervaluation.
Price to Book
The market values Western Midstream Partners, LP at 4.09 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 3.76 times EBITDA. This is generally considered low.
How Well Does WES Make Money?
Net Profit Margin
For every $100 in sales, Western Midstream Partners, LP keeps $30.43 as profit after all expenses.
Operating Margin
Core operations generate 41.26 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $34.44 in profit for every $100 of shareholder equity.
ROA
Western Midstream Partners, LP generates $7.80 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Western Midstream Partners, LP generates strong operating cash flow of $2.27B, reflecting robust business health.
Free Cash Flow
Western Midstream Partners, LP generates strong free cash flow of $1.52B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.73 in free cash annually.
FCF Yield
WES converts 8.93% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.07
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.23
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.09
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.36
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.22
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.34
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.34
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How WES Stacks Against Its Sector Peers
| Metric | WES Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.07 | 20.19 | Better (Cheaper) |
| ROE | 34.44% | 1019.00% | Weak |
| Net Margin | 30.43% | -44017.00% (disorted) | Strong |
| Debt/Equity | 2.22 | -0.65 (disorted) | Distorted |
| Current Ratio | 1.34 | 4.60 | Neutral |
| ROA | 7.80% | -11655350.00% (disorted) | Weak |
WES outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Western Midstream Partners, LP's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
43.50%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
146.69%
Industry Style: Cyclical, Value, Commodity
High GrowthFCF CAGR
74.08%
Industry Style: Cyclical, Value, Commodity
High Growth