What Should You Know About Pioneer Natural Resources Company (PXD)?

We've been asking ourselves recently if the market has placed a fair valuation on Pioneer Natural Resources Company. Let's dive into some of the fundamental values of this large-cap Energy company to determine if there might be an opportunity here for value-minded investors.

Pioneer Natural Resources Company's Valuation Is in Line With Its Sector Averages:

Pioneer Natural Resources Company operates as an independent oil and gas exploration and production company in the United States. The company belongs to the Energy sector, which has an average price to earnings (P/E) ratio of 8.53 and an average price to book (P/B) ratio of 1.78. In contrast, Pioneer Natural Resources Company has a trailing 12 month P/E ratio of 10.7 and a P/B ratio of 2.31.

When we divide Pioneer Natural Resources Company's P/E ratio by its expected EPS growth rate of the next five years, we obtain its PEG ratio of -2.64. Since it's negative, the company has negative growth expectations, and most investors will probably avoid the stock unless it has an exceptionally low P/E and P/B ratio.

The Business Has Weak Operating Margins:

2018 2019 2020 2021 2022 2023
Revenue (MM) $9,415 $9,325 $6,685 $14,643 $24,294 $19,253
Revenue Growth n/a -0.96% -28.31% 119.04% 65.91% -20.75%
Operating Margins 13% 11% -4% 19% 41% 34%
Net Margins 10% 8% -3% 14% 32% 27%
Net Income (MM) $978 $773 -$200 $2,118 $7,845 $5,106
Net Interest Expense (MM) $126 $121 $129 $161 $128 $141
Depreciation & Amort. (MM) $1,534 $1,711 $1,639 $2,498 $2,530 $2,742
Diluted Shares (MM) 171 167 165 246 252 240
Free Cash Flow (MM) $2,979 $2,883 $1,944 $5,928 $11,235 $8,568
Capital Expenditures (MM) $263 $232 $126 $118 $113 $129
Current Ratio 1.42 0.88 1.36 1.52 0.96 0.85
Total Debt (MM) $2,284 $2,739 $6,460 $7,176 $5,683 $4,924
Net Debt / EBITDA 0.52 0.78 3.64 0.63 0.37 0.52

Pioneer Natural Resources Company has low leverage, growing revenues and decreasing reinvestment in the business, and irregular cash flows. However, the firm has weak operating margins with a positive growth rate. Finally, we note that Pioneer Natural Resources Company has positive expected EPS Growth.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.