Fact based stock research
ARC Resource (TSX:ARX)

CA00208D4084

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

ARC Resource stock research in summary

arcresources.com

ANALYSIS: With an Obermatt Combined Rank of 51 (better than 51% compared with investment alternatives), ARC Resource (Oil & Gas Production, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of ARC Resource are low in value (priced high) with a consolidated Value Rank of 44 (worse than 56% of alternatives) and show below-average growth (Growth Rank of 36) but are safely financed (Safety Rank of 67), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 51, is a buy recommendation based on ARC Resource's financial characteristics. As the company ARC Resource's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 44) and low growth (Obermatt Growth Rank of 36), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 67) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	44
Growth Rank	36
Safety Rank	67
Combined Rank	51

Country	Canada
Industry	Oil & Gas Production
Index	Oil & Gas, TSX Composite
Size class	X-Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: ARC Resource

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	38	57	35	44
GROWTH
GROWTH	64	93	17	36
SAFETY
SAFETY	21	81	70	67
SENTIMENT
SENTIMENT	n/a	81	86	^new
360° VIEW
360° VIEW	n/a	100	48	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better ARC Resource is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	38	57	35	44
GROWTH
GROWTH	64	93	17	36
SAFETY
SAFETY	21	81	70	67
COMBINED
COMBINED	27	100	31	51

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of ARC Resource the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 44 (worse than 56% compared with alternatives), ARC Resource shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for ARC Resource. Price-to-Profit (also referred to as price-earnings, P/E) is 61 which means that the stock price compared with what market professionals expect for future profits is lower than for 61% of comparable companies, indicating a good value concerning ARC Resource's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 31, which means that the stock price is lower as regards to invested capital than for 31% of comparable investments. On the other hand, Price-to-Sales is less favorable than 56% of alternatives (only 44% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 50% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 44, is a hold recommendation based on ARC Resource's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	56	36	3	44
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	14	50	56	61
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	27	50	32	31
DIVIDEND YIELD
DIVIDEND YIELD	67	79	73	50
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	38	57	35	44

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of ARC Resource; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 36 (better than 36% compared with alternatives), ARC Resource shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for ARC Resource. Sales Growth has a rank of 51 which means that currently professionals expect the company to grow more than 51% of its competitors. Stock Returns are also above average with a rank of 84. But Capital Growth has only a rank of 17, which means that currently professionals expect the company to grow its invested capital less than 83% of its competitors. Profit Growth is also low, with a rank of only 27, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 36, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 84% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	97	58	1	51
PROFIT GROWTH
PROFIT GROWTH	19	93	27	27
CAPITAL GROWTH
CAPITAL GROWTH	n/a	88	36	17
STOCK RETURNS
STOCK RETURNS	49	37	77	84
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	64	93	17	36

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of ARC Resource.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 67 (better than 67% compared with alternatives), the company ARC Resource has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of ARC Resource is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for ARC Resource. Leverage is at 63, meaning the company has a below-average debt-to-equity ratio. It has less debt than 63% of its competitors. Refinancing is at a rank of 51, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 51% of its competitors. Finally, Liquidity is also good at a rank of 77, which means that the company generates more profit to service its debt than 77% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 67 (better than 67% compared with alternatives), ARC Resource has a financing structure that is safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with ARC Resource but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	43	91	72	63
REFINANCING
REFINANCING	10	35	40	51
LIQUIDITY
LIQUIDITY	21	75	83	77
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	21	81	70	67

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of ARC Resource and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	92	87	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	29	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	100	84	^new
MARKET PULSE
MARKET PULSE	n/a	6	56	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	81	86	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for ARC Resource.
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