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Fundamental analysis: Callon Petroleum Company (CPE)

Awarener score: 5.2

Conclusion

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.0

• Business has been growing at an excellent pace. It's been more than average in relation to peer companies.
• Callon Petroleum Company business varies, ups and downs are rather normal. Risk is sufficient. It looks better than most rivals.

Margins score: 3.7

• CPE profit margins -on goods and services sold- are usually sufficient. They stand slightly better than rival companies.
• Business profit on sales tends to be meagre. It's weak when measured against competitors.
• Profits on sales made -available to repay debt and purchase properties- are usually very poor. They remain in a very weak position compared to peers.
• Earnings -before income taxes and interests on loans taken- tend to be very poor in relation to total revenues. They're still mediocre against similar companies.
• Profits -before income taxes- are usually very poor considering total sales, and remain weak when measured against rivals.
• Total net profit tends to be very poor when confronted to sales. Company stands weak when measured against comparable firms.

Growth score: 2.1

• Callon Petroleum Company profit -on goods and services sold- has been growing at an excellent pace. It's been a slight improvement compared to competitors.
• In recent years, the firm hasn't always been able to profit from operations, which has been bottom tier against comparable firms.
• In past years, the company couldn't always turn a profit -available to repay debt and purchase properties-, which compares last-in-rank when measured against peer enterprises.
• In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
• In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
• In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
• The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 1.0

• CPE had still to pay income taxes, even though in recent past years mostly lost money. It's been bottom tier against peers.
• The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
• We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 3.5

• Callon Petroleum Company usually gets low returns on the resources it controls. It proves substantially worse when measured against peer firms.
• The company normally gets low proceeds -on the resources directly invested in the business-. They remain in a very weak position compared to similar companies.
• Profitability -in relation to owned resources- is usually insufficient. It ranks last-in-rank when measured against competitors.
• In the past, got low returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's substantially worse when measured against comparable enterprises.

Usage of Funds score: 4.0

• CPE usually uses a large portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is large. It stands substantially worse when measured against rival firms.
• The company is usually heavily investing in new property, plant, and equipment, to expand its operating capabilities, which is great when measured against industry peers.
• In the past twelve months the stock paid no dividends. It came bottom tier against competitors.
• Has stopped or virtually stopped paying dividends. Unless they were a special one-shot payment, the company could be enduring difficult times. The company has behaved a disappointment compared to similar firms.
• As no dividends are paid, it is useless trying to estimate their sustainability in time. Sustainability looks not applicable in regard to comparable companies.
• The company has significantly enlarged the pool of investors in previous years, resulting in more mouths feeding on the pie of profits. It remains in a very weak position compared to peer enterprises.
• Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
• We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 5.3

• Callon Petroleum Company has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
• The company has lower short-term resources than short-term obligations. Unless it's part of the business model, there might be liquidity concerns. It turns to be a disappointment compared to similar firms.
• Roughly a third of resources controlled were provided for with financial debt. Creditors have claims on the company. It remains mediocre against rival firms.
• Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks substantially worse when measured against rivals.
• For every dollar of short-term obligations, the company has less than a dollar of cash and short-term receivables. It's in a very weak position compared to peer firms.
• For every dollar of short-term obligations, the company has extremely few cents of cash and equivalents, which is worse than most similar enterprises.
• Usually, sales are on a month credit. It still ranks encouraging in relation to peers.
• Normally has no inventories. It comes up as impressive in relation to competitors.
• On average, it takes close to one month from the purchase to charging customers. It happens to be somewhat better than peers.
• Pays suppliers mostly in cash. It ranks last-in-rank when measured against industry peers.
• The company pays its suppliers less than one month before charging its customers, so there's little money invested in working capital. It's in a very weak position compared to similar companies.
• Usual business earnings barely cover net interest expenses. Creditors may be earning money by assuming risks, but hardly shareholders. Situation is risky, profitability must increase, or additional stockholders' funding will eventually be required. It stands worse than most rival firms.
• Business earnings have usually been very low when measured against loans taken. Even significantly cutting back reinvesting in the business, it could take more than ten years to repay the obligations with current profitability. It ranks substantially worse when measured against comparable enterprises.
• Revenues are huge in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements, allows the company to keep more money to reward stockholders in the long run. It looks impressive in relation to similar firms.
• Resource exploitation is slightly low when yearly sales are considered, business volume should be increased. This metric is normally tied to the industry where the firm belongs. It's still mediocre against peer companies.

Valuation score: 7.4

• Callon Petroleum Company looks extremely cheap in relation to profits and financial position. It happens to be more than average in relation to competitors.
• Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains excellent in relation to peers.
• In the past twelve months, the company generated extraordinary free funds in relation to the stock price, which stands slightly better than similar companies.
• In the past years the company barely generated enough genuine funds to cover up for its business needs. Business prospects should improve to be in a better position to reward investors. It's still weak when measured against industry firms.
• In the past twelve months, the company has significantly enlarged the pool of investors by issuing new shares. Future profits need to be high enough to justify the measure, as the pie of earnings will now be split among numerous more stockholders. It came up in a weak position compared to peer ventures.
• The company is largely indebted. It should focus on loan repayment before rewarding stockholders. It looks worse than most similar enterprises.
• Considering the past twelve months, traditional Price-to-Earnings relation looks extremely cheap. Possible reasons are that the market might be betting current earnings will be very hard to sustain through time, or that the company has very high fund needs, a weak financial position, or that earnings aren't representative. If that isn't the case, the stock price could be extremely attractive. It ranks great when measured against peer companies.
• Comparing the current stock price with the past twelve-months revenues gives a not far from one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in good shape compared to rival firms.
• The stock price is at or below the accounting book value. Unless profitability is really low, the stock may be selling a t a discount. Pay attention to the other key indicators for hints. The company remains better than most peer firms.
• In the past twelve months, the operating business earned huge money when compared to the current stock price and financial position. It happens to be more than average in relation to industry peers.
• In an alternate metric of bang for the buck, the company has usually shown a mediocre earnings power ability when measured against the current stock price and financial position. It's still lacking compared to peer companies.

Total score: 4.1

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Awarener score: 5.2

Conclusion

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