Here's What's Concerning About Gulfport Energy's (NYSE:GPOR) Returns On Capital
When we're researching a company, it's sometimes hard to find the warning signs, but there are some financial metrics that can help spot trouble early. Businesses in decline often have two underlying trends, firstly, a declining return on capital employed (ROCE) and a declining base of capital employed. This indicates to us that the business is not only shrinking the size of its net assets, but its returns are falling as well. So after we looked into Gulfport Energy (NYSE:GPOR), the trends above didn't look too great.
This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.
If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on Gulfport Energy is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.027 = US$67m ÷ (US$2.9b - US$478m) (Based on the trailing twelve months to March 2025).
Thus, Gulfport Energy has an ROCE of 2.7%. In absolute terms, that's a low return and it also under-performs the Oil and Gas industry average of 10%.
View our latest analysis for Gulfport Energy
Above you can see how the current ROCE for Gulfport Energy compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Gulfport Energy for free.
We are a bit worried about the trend of returns on capital at Gulfport Energy. About five years ago, returns on capital were 11%, however they're now substantially lower than that as we saw above. And on the capital employed front, the business is utilizing roughly the same amount of capital as it was back then. This combination can be indicative of a mature business that still has areas to deploy capital, but the returns received aren't as high due potentially to new competition or smaller margins. If these trends continue, we wouldn't expect Gulfport Energy to turn into a multi-bagger.
In summary, it's unfortunate that Gulfport Energy is generating lower returns from the same amount of capital. The market must be rosy on the stock's future because even though the underlying trends aren't too encouraging, the stock has soared 104%. In any case, the current underlying trends don't bode well for long term performance so unless they reverse, we'd start looking elsewhere.
On a separate note, we've found 1 warning sign for Gulfport Energy you'll probably want to know about.
While Gulfport Energy may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
27 minutes ago
- Yahoo
Q & M Dental Group (Singapore) Limited's (SGX:QC7) Intrinsic Value Is Potentially 89% Above Its Share Price
The projected fair value for Q & M Dental Group (Singapore) is S$0.72 based on 2 Stage Free Cash Flow to Equity Current share price of S$0.38 suggests Q & M Dental Group (Singapore) is potentially 47% undervalued Analyst price target for QC7 is S$0.37 which is 48% below our fair value estimate In this article we are going to estimate the intrinsic value of Q & M Dental Group (Singapore) Limited (SGX:QC7) by estimating the company's future cash flows and discounting them to their present value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (SGD, Millions) S$21.2m S$24.7m S$27.6m S$27.2m S$27.0m S$27.2m S$27.4m S$27.8m S$28.3m S$28.8m Growth Rate Estimate Source Analyst x1 Analyst x1 Analyst x1 Est @ -1.57% Est @ -0.39% Est @ 0.43% Est @ 1.01% Est @ 1.42% Est @ 1.70% Est @ 1.90% Present Value (SGD, Millions) Discounted @ 5.8% S$20.1 S$22.0 S$23.3 S$21.7 S$20.4 S$19.3 S$18.5 S$17.7 S$17.0 S$16.4 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = S$196m After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.4%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 5.8%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = S$29m× (1 + 2.4%) ÷ (5.8%– 2.4%) = S$852m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= S$852m÷ ( 1 + 5.8%)10= S$484m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is S$680m. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of S$0.4, the company appears quite good value at a 47% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Q & M Dental Group (Singapore) as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 5.8%, which is based on a levered beta of 0.800. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Q & M Dental Group (Singapore) Strength Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Dividend is low compared to the top 25% of dividend payers in the Healthcare market. Opportunity Annual earnings are forecast to grow faster than the Singaporean market. Trading below our estimate of fair value by more than 20%. Significant insider buying over the past 3 months. Threat Revenue is forecast to grow slower than 20% per year. Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Why is the intrinsic value higher than the current share price? For Q & M Dental Group (Singapore), we've compiled three fundamental factors you should further examine: Risks: To that end, you should be aware of the 2 warning signs we've spotted with Q & M Dental Group (Singapore) . Future Earnings: How does QC7's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the SGX every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
31 minutes ago
- Yahoo
Mr Price Group Full Year 2025 Earnings: EPS: R14.16 (vs R12.76 in FY 2024)
Revenue: R40.7b (up 8.3% from FY 2024). Net income: R3.65b (up 11% from FY 2024). Profit margin: 9.0% (up from 8.7% in FY 2024). The increase in margin was driven by higher revenue. EPS: R14.16 (up from R12.76 in FY 2024). We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. All figures shown in the chart above are for the trailing 12 month (TTM) period The primary driver behind last 12 months revenue was the Apparel segment contributing a total revenue of R31.5b (77% of total revenue). Notably, cost of sales worth R23.6b amounted to 58% of total revenue thereby underscoring the impact on earnings. The largest operating expense was Sales & Marketing costs, amounting to R8.46b (63% of total expenses). Explore how MRP's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 7.7% p.a. on average during the next 3 years, compared to a 7.9% growth forecast for the Specialty Retail industry in South Africa. Performance of the South African Specialty Retail industry. The company's shares are down 3.5% from a week ago. We don't want to rain on the parade too much, but we did also find 1 warning sign for Mr Price Group that you need to be mindful of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
3 Asian Growth Companies With Up To 35% Insider Ownership
As the Chinese stock markets experience a rise amidst hopes for government stimulus, investor interest in Asia remains piqued despite broader global economic uncertainties. In this environment, growth companies with significant insider ownership can offer unique insights into potential resilience and confidence from those closest to the business. Name Insider Ownership Earnings Growth Zhejiang Leapmotor Technology (SEHK:9863) 15.6% 60.1% Techwing (KOSDAQ:A089030) 18.8% 68% Sineng ElectricLtd (SZSE:300827) 36% 26.9% Shanghai Huace Navigation Technology (SZSE:300627) 24.4% 23.5% Schooinc (TSE:264A) 30.6% 68.9% Samyang Foods (KOSE:A003230) 11.7% 24.3% Oscotec (KOSDAQ:A039200) 21.1% 94.4% Nanya New Material TechnologyLtd (SHSE:688519) 11% 63.3% Laopu Gold (SEHK:6181) 35.5% 40.2% Fulin Precision (SZSE:300432) 13.6% 44.2% Click here to see the full list of 617 stocks from our Fast Growing Asian Companies With High Insider Ownership screener. We're going to check out a few of the best picks from our screener tool. Simply Wall St Growth Rating: ★★★★☆☆ Overview: TUHU Car Inc., along with its subsidiaries, operates as an integrated online and offline platform for automotive services in China, with a market cap of HK$16.69 billion. Operations: The company's revenue is primarily derived from its online retailers segment, which generated CN¥14.76 billion. Insider Ownership: 14.9% TUHU Car demonstrates potential as a growth company with high insider ownership, despite some challenges. Recent earnings showed a decline in net income to CNY 483.79 million, but revenue increased to CNY 14.76 billion. Earnings are projected to grow significantly at 24.1% annually, outpacing the Hong Kong market's average growth rate of 10.4%. However, profit margins have decreased notably from last year and return on equity is forecasted to be low at 15.9%. Delve into the full analysis future growth report here for a deeper understanding of TUHU Car. Our expertly prepared valuation report TUHU Car implies its share price may be too high. Simply Wall St Growth Rating: ★★★★★☆ Overview: Jiangsu Lopal Tech Co., Ltd. is involved in the research, development, production, and sale of lithium iron phosphate cathode materials and environmental protection fine chemicals for vehicles both in China and internationally, with a market cap of CN¥8.44 billion. Operations: The company's revenue is derived from its activities in the development, production, and sale of lithium iron phosphate cathode materials and environmental protection fine chemicals for vehicles. Insider Ownership: 35.8% Jiangsu Lopal Tech faces challenges but shows promise with high insider ownership. The company reported a reduced net loss of CNY 25.95 million for Q1 2025, while revenue rose to CNY 1.59 billion. Despite past shareholder dilution, earnings are expected to grow significantly at over 100% annually, and revenue is forecasted to increase by 29% per year, surpassing the Chinese market average growth rate. The recent HKD 120 million equity offering may support future expansion efforts. Click to explore a detailed breakdown of our findings in Jiangsu Lopal Tech's earnings growth report. Our valuation report unveils the possibility Jiangsu Lopal Tech's shares may be trading at a discount. Simply Wall St Growth Rating: ★★★★★☆ Overview: Shenzhen Bluetrum Technology Co., Ltd. focuses on the research, development, design, and sale of wireless audio SOC chips in China with a market capitalization of CN¥12.44 billion. Operations: Shenzhen Bluetrum Technology Co., Ltd. generates revenue primarily from the research, development, design, and sale of wireless audio SOC chips within China. Insider Ownership: 26.3% Shenzhen Bluetrum Technology shows potential with high insider ownership, trading at a favorable price-to-earnings ratio of 42.9x compared to the industry average. Despite a volatile share price recently, its earnings are forecasted to grow significantly at 25.4% annually over the next three years, outpacing the market. Revenue growth is also expected to be robust at 22.3% per year. However, recent earnings reported a decline in net income and EPS compared to last year's figures. Get an in-depth perspective on Shenzhen Bluetrum Technology's performance by reading our analyst estimates report here. Our valuation report here indicates Shenzhen Bluetrum Technology may be undervalued. Investigate our full lineup of 617 Fast Growing Asian Companies With High Insider Ownership right here. Ready For A Different Approach? The end of cancer? These 23 emerging AI stocks are developing tech that will allow early idenification of life changing disesaes like cancer and Alzheimer's. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks analysis only considers stock directly held by insiders. It does not include indirectly owned stock through other vehicles such as corporate and/or trust entities. All forecast revenue and earnings growth rates quoted are in terms of annualised (per annum) growth rates over 1-3 years. Companies discussed in this article include SEHK:9690 SHSE:603906 and SHSE:688332. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
