NASDAQ:APA is an undervalued gem with solid fundamentals.

Last update: Jun 18, 2024

Discover APA CORP (NASDAQ:APA), an undervalued stock highlighted by our stock screener. NASDAQ:APA showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

Understanding NASDAQ:APA's Valuation Score

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:APA scores a 8 out of 10:

The Price/Earnings ratio is 6.80, which indicates a rather cheap valuation of APA.
Based on the Price/Earnings ratio, APA is valued a bit cheaper than the industry average as 79.62% of the companies are valued more expensively.
APA's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.66.
The Price/Forward Earnings ratio is 5.70, which indicates a rather cheap valuation of APA.
87.68% of the companies in the same industry are more expensive than APA, based on the Price/Forward Earnings ratio.
APA's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.15.
APA's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. APA is cheaper than 87.20% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, APA is valued cheaply inside the industry as 93.36% of the companies are valued more expensively.
APA has an outstanding profitability rating, which may justify a higher PE ratio.

Profitability Insights: NASDAQ:APA

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:APA was assigned a score of 8 for profitability:

APA's Return On Assets of 18.36% is amongst the best of the industry. APA outperforms 86.73% of its industry peers.
With an excellent Return On Equity value of 105.29%, APA belongs to the best of the industry, outperforming 95.26% of the companies in the same industry.
The Return On Invested Capital of APA (17.35%) is better than 84.36% of its industry peers.
The 3 year average ROIC (23.87%) for APA is well above the current ROIC(17.35%). The reason for the recent decline needs to be investigated.
Looking at the Profit Margin, with a value of 33.39%, APA belongs to the top of the industry, outperforming 80.57% of the companies in the same industry.
In the last couple of years the Profit Margin of APA has grown nicely.
APA's Operating Margin of 37.93% is fine compared to the rest of the industry. APA outperforms 72.04% of its industry peers.
APA's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 73.95%, APA belongs to the top of the industry, outperforming 81.99% of the companies in the same industry.

Looking at the Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:APA has received a 5 out of 10:

The Debt to FCF ratio of APA is 1.65, which is an excellent value as it means it would take APA, only 1.65 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.65, APA is doing good in the industry, outperforming 79.62% of the companies in the same industry.
Although APA does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

Growth Assessment of NASDAQ:APA

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:APA has earned a 4 for growth:

The Earnings Per Share has been growing by 20.76% on average over the past years. This is a very strong growth
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of APA

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.