When you look at NASDAQ:APA, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Uncover the potential of APA CORP (NASDAQ:APA) as our stock screener's choice for an undervalued stock. NASDAQ:APA maintains a strong financial position and offers an appealing valuation. We'll delve into the specifics below.

Valuation Insights: NASDAQ:APA

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:

• Based on the Price/Earnings ratio of 6.33, the valuation of APA can be described as very cheap.
• 83.09% of the companies in the same industry are more expensive than APA, based on the Price/Earnings ratio.
• The average S&P500 Price/Earnings ratio is at 29.81. APA is valued rather cheaply when compared to this.
• A Price/Forward Earnings ratio of 5.80 indicates a rather cheap valuation of APA.
• Based on the Price/Forward Earnings ratio, APA is valued cheaper than 84.06% of the companies in the same industry.
• APA is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
• Based on the Enterprise Value to EBITDA ratio, APA is valued cheaper than 86.96% of the companies in the same industry.
• APA's Price/Free Cash Flow ratio is rather cheap when compared to the industry. APA is cheaper than 91.30% of the companies in the same industry.
• The decent profitability rating of APA may justify a higher PE ratio.

Analyzing Profitability Metrics

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:APA has earned a 7 out of 10:

• Looking at the Return On Assets, with a value of 14.38%, APA belongs to the top of the industry, outperforming 85.51% of the companies in the same industry.
• With an excellent Return On Equity value of 53.57%, APA belongs to the best of the industry, outperforming 92.75% of the companies in the same industry.
• With a decent Return On Invested Capital value of 13.75%, APA is doing good in the industry, outperforming 78.26% of the companies in the same industry.
• The last Return On Invested Capital (13.75%) for APA is well below the 3 year average (23.87%), which needs to be investigated, but indicates that APA had better years and this may not be a problem.
• The Profit Margin of APA (32.39%) is better than 79.23% of its industry peers.
• APA's Profit Margin has improved in the last couple of years.
• APA has a better Operating Margin (37.26%) than 72.46% of its industry peers.
• In the last couple of years the Operating Margin of APA has grown nicely.
• The Gross Margin of APA (74.13%) is better than 82.61% of its industry peers.

Health Analysis for NASDAQ:APA

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:

• APA has a debt to FCF ratio of 2.38. This is a good value and a sign of high solvency as APA would need 2.38 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 2.38, APA is in the better half of the industry, outperforming 74.88% 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.

Exploring NASDAQ:APA's Growth

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:

• Measured over the past years, APA shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.76% on average per year.
• 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.

Check the latest full fundamental report of APA for a complete fundamental analysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.