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Antero Resources Q3 Earnings: Can NYSE:AR Hit Its -$0.07 EPS Target?

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Antero Resources Corporation (NYSE:AR) is scheduled to report Q3 earnings results after markets close for trading on October 28, 2020.

The company is expected to report earnings of -$0.07/share on revenue of $1.019 billion. The consensus earnings per share (EPS) of -$0.07/share is based on a poll of 9 analysts and represents a growth in eps of 85.9% over the same quarter last year, when the company reported earnings of -$0.49/share.

The revenue forecast of $1.019 billion based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −8.9%. Last year the company reported $1.119 billion in revenue for the quarter.

Expected to report EPS of -$0.07/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,019.50 $1,118.88 −8.9%
EPS -$0.07 -$0.49 −85.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters.

What are your expectations from Antero Resources Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.15 -$0.37 -140.3% Missed
Q1, 2020 $0.02 -$0.13 −652.5% Missed
Q4, 2019 -$0.09 -$0.02 77.0% Beat
Q3, 2019 -$0.30 -$0.49 -62.5% Missed
Q2, 2019 -$0.13 -$0.21 -64.4% Missed
Q1, 2019 $0.35 $0.35 −0.1% Missed
Q4, 2018 $0.37 $0.46 25.4% Beat
Q3, 2018 $0.23 $0.24 4.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 6.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $2.83 $3 6.0% Increase
April 29, 2020 $2.21 $2.98 34.8% Increase
February 12, 2020 $1.70 $1.76 3.5% Increase
October 29, 2019 $2.60 $2.70 3.8% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −4.08, the model suggests that the company is not likely to be an earnings manipulator. A value of −4.08 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Antero Resources Corporation is currently trading at $3.72/share, down −6.8% for the day. The company is trading at approximately 80.2% of its 52-week high of $4.64/share. The company’s stock price is up 24.0% since the last earnings report and down −2.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 60.53 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:AR Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −0.46 and a forward P/E multiple of −6.11.

Antero Resources Corporation’s current share price also implies a price-to-book (P/B) multiple of 0.16. The following table summarizes some other key fundamental ratios:

Data as of October 26, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $3.72
P/E Ratio −0.5x
P/E Ratio (Fwd) −6.1x
PEG Ratio 0.0
Total Debt / Total Capital 81.6%
Levered Free Cash Flow -$520.1 million
EV / EBITDA 10.3x

Finbox

Antero Resources Corporation is a small-cap stock with a market capitalization of $999 million and a total enterprise value of $7.379 billion. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.

Antero Resources Corporation, an independent oil and natural gas company, acquires, explores for, develops, and produces natural gas, natural gas liquids, and oil properties in the United States. As of December 31, 2019, the company had approximately 451,000 net acres in the southwestern core of the Marcellus Shale; and 91,000 net acres in the core of the Utica Shale. It also owned and operated 324 miles of gas gathering pipelines in the Marcellus Shale; 17 compressor stations in the Marcellus Shale; 110 miles of low-pressure and high-pressure gathering pipelines in the Utica Shale; 8 miles of high-pressure pipelines; and 2 compressor stations in the Utica Shale. The company had estimated proved reserves of 18.9 trillion cubic feet of natural gas equivalent, including 11.5 trillion cubic feet of natural gas; 652 million barrels of assumed recovered ethane; 540 million barrels of primarily propane, isobutane, normal butane, and natural gasoline; and 42 million barrels of oil. The company was formerly known as Antero Resources Appalachian Corporation and changed its name to Antero Resources Corporation in June 2013. Antero Resources Corporation was founded in 2002 and is headquartered in Denver, Colorado.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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