Long-established in the Oil & Gas industry, Hess Corp (HES, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 2.6%, juxtaposed with a three-month change of 15.73%. However, fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Hess Corp.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 5/10
- Growth rank: 2/10
- GF Value rank: 9/10
- Momentum rank: 5/10
Based on the above method, GuruFocus assigned Hess Corp the GF Score of 68 out of 100, which signals poor future outperformance potential.
Company Overview
Hess Corp is an independent oil and gas producer with key assets in the Bakken Shale, Guyana, the Gulf of Mexico, and Southeast Asia. At the end of 2024, the company reported net proved reserves of 1.44 billion barrels of oil equivalent. Net production averaged 481 thousand barrels of oil equivalent per day in 2024, at a ratio of 79% oil and natural gas liquids and 21% natural gas. With a market cap of $45.48 billion and sales amounting to $12.5 billion, Hess Corp operates with an operating margin of 33.02%.
Financial Strength Breakdown
Hess Corp's financial strength indicators present some concerning insights about the company's balance sheet health. Additionally, the company's low cash-to-debt ratio at 0.14 indicates a struggle in handling existing debt levels.
Profitability Concerns
Hess Corp's low Profitability rank can also raise warning signals. Despite its significant market presence, the company's profitability metrics suggest potential challenges in maintaining its competitive edge and delivering consistent returns to shareholders.
Growth Prospects
A lack of significant growth is another area where Hess Corp seems to falter, as evidenced by the company's low Growth rank. Lastly, Hess Corp predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Conclusion
In conclusion, Hess Corp's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's potential for underperformance. While the company has a strong market presence and significant reserves, its financial indicators suggest challenges in sustaining growth and profitability. Investors should carefully consider these factors when evaluating Hess Corp's future prospects. For those seeking companies with stronger GF Scores, GuruFocus Premium members can explore more options using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
