Permian Resources Corp
PR
$24.40
-1.77%
Permian Resources Corporation is an independent oil and natural gas exploration and production company focused on the acquisition, optimization, and development of oil- and liquids-rich assets concentrated in the core of the Permian Basin across West Texas and New Mexico, operating within the Energy sector's Oil & Gas Exploration & Production industry. With a lean headcount of roughly 515 employees managing a multi-billion-dollar asset base, the company is a pure-play Permian operator whose identity rests on large, contiguous acreage blocks and a consolidation-driven growth model rather than diversified or international exposure. The current investor narrative centers on a dramatic earnings inflection: Q2 2026 revenue jumped 55.2% year-over-year to $1.86 billion with net income of $792 million, a sharp reversal from the weak Q1 2026 print of just $43.6 million in net income, and the stock has responded with a 103% one-year gain that has outpaced the S&P 500 by roughly 88 percentage points. Debate now hinges on whether this earnings surge is a durable function of improved realizations and disciplined capital allocation or a cyclical windfall tied to elevated oil prices, with Goldman Sachs' March 2026 upward revision to oil price forecasts and its inclusion of select E&P names among top energy winners reinforcing the bullish macro framing while simultaneously raising the question of how much of that tailwind is already priced in.…
PR
Permian Resources Corp
$24.40
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Investment Opinion: Should I buy PR Today?
Rating: Buy. The core thesis is that Permian Resources offers a rare combination of 55.15% YoY revenue growth, a 42.65% net margin, and a 3.67x EV/EBITDA valuation that is cheap versus E&P peers, with a unanimous strong_buy consensus (mean 1.30) and an average target of $28.10 implying +14.3% upside. The analyst consensus and average target anchor the view that the market has not fully priced the earnings recovery.
Supporting evidence: (1) valuation—10.71x trailing PE and 3.67x EV/EBITDA versus the typical 5-7x E&P range; (2) growth—Q2 2026 revenue of $1.858 billion grew 55.15% YoY and 33.9% sequentially; (3) profitability—net margin of 42.65% and operating margin of 49.95% in Q2 2026; (4) cash flow—$1.615 billion trailing FCF and $1.506 billion Q2 operating cash flow funding capex, dividends, and debt repayment; (5) analyst upside—+14.3% to the $28.10 average target, with even the $25.00 low target above the current price.
Risks and conditions: the biggest risks are oil price normalization compressing the earnings base, the stock's extension at 99.8% of its 52-week range leaving little margin for error, and the current ratio of 0.782 signaling working-capital tightness. This Buy would upgrade to a stronger conviction if oil prices hold and EV/EBITDA remains below 4x with revenue growth above 40%, or downgrade to Hold if revenue growth decelerates below 20% or the dividend payout ratio exceeds 60%. Valuation verdict: the stock is undervalued relative to its history and peers on EV/EBITDA and P/B, but fairly valued to slightly rich on a near-term basis given the 103% one-year run and proximity to the 52-week high.
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PR 12-Month Price Forecast
The forward view is bullish with medium confidence: the 55.15% revenue growth, 42.65% net margin, and 3.67x EV/EBITDA provide a compelling valuation case, and the unanimous analyst consensus with a $28.10 average target supports upside. However, the stock's 103% one-year run and position at 99.8% of its 52-week range mean much of the recovery is priced in, and the oil-price dependence of earnings introduces cyclical risk. I would upgrade to high confidence if oil prices hold above $80/bbl and Q3 2026 revenue growth exceeds 50% YoY, or downgrade to neutral if revenue growth decelerates below 20% or the dividend payout ratio exceeds 60%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Permian Resources Corp's 12-month outlook, with a consensus price target around $28.59 and implied upside of +17.2% versus the current price.
Average Target
$28.59
0 analysts
Implied Upside
+17.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$25 - $34
Analyst target range
Coverage is robust with 21 analysts, and the consensus is decisively bullish: the recommendation is a "strong_buy" with a recommendation mean of 1.30 (where 1.0 is a strong buy and 5.0 a strong sell). The average target price is $28.10, which against the current $24.59 implies approximately +14.3% upside, and notably even the lowest target of $25.00 sits above the current price, meaning every covering analyst sees upside from here. This unanimity of positive targets is a powerful signal of conviction, though it also means the stock has already run a long way toward consensus fair value, compressing the remaining margin of safety. The consensus leans strongly bullish, supported by a steady drumbeat of reiterated positive ratings: RBC Capital (Outperform), KeyBanc (Overweight), UBS (Buy), Wells Fargo (Overweight), Truist (Buy), Citigroup (Buy), and Morgan Stanley (Overweight) have all maintained constructive stances through 2026, with Roth Capital notably upgrading from Neutral to Buy in June 2026. The target range of $25.00 to $31.00 is relatively tight at roughly 24% wide, signaling strong analyst agreement rather than divergent views. The high target of $31.00 (about +26% upside) likely assumes sustained elevated oil prices, continued execution on the 55% revenue growth trajectory, further debt reduction, and multiple expansion toward sector-average EV/EBITDA as the market gains confidence in earnings durability. The low target of $25.00 (about +1.7% upside) likely prices in commodity price normalization, margin compression from the exceptional Q2 2026 levels, and a reversion of the current earnings windfall toward mid-cycle profitability. The tight spread and universal buy ratings indicate high conviction but also raise a contrarian flag: when 21 analysts are uniformly bullish and the stock is at its 52-week high, the bar for positive surprise is elevated, and the estimated EPS range of $1.86 to $2.27 for the forward period leaves limited room for disappointment without triggering a de-rating.
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Bulls vs Bears: PR Investment Factors
The bull case currently has stronger evidence: revenue growth of 55% YoY, a 42.65% net margin, $1.615 billion in trailing FCF, and a 3.67x EV/EBITDA that is cheap versus E&P peers all point to a fundamentally re-rated company with room for multiple expansion. However, the bear case is not dismissible—the stock is pinned at its 52-week high after a 103% run, earnings are overwhelmingly oil-price dependent, and Q1 2026's $43.6 million net income shows how quickly results can collapse. The single most important tension is whether the Q2 2026 earnings surge is a durable function of improved realizations and disciplined capital allocation or a cyclical windfall tied to elevated oil prices; if oil holds, the low multiple and analyst targets support further upside, but if crude normalizes, the earnings base and dividend could compress sharply.
Bullish
- Explosive revenue and earnings inflection: Q2 2026 revenue surged 55.15% YoY to $1.858 billion and net income hit $792.5 million (42.65% net margin), a dramatic reversal from Q1 2026's $43.6 million. The sequential revenue jump of 33.9% confirms accelerating momentum rather than a one-off.
- Deep valuation discount to sector: At 3.67x EV/EBITDA and 0.98x P/B, PR trades well below the typical 5-7x EV/EBITDA range for E&P peers. The 10.71x trailing PE and 10.63x forward PE are modest for a company growing revenue at 55% YoY.
- Unanimous analyst bullishness with upside: All 21 covering analysts rate the stock a buy (mean 1.30), with an average target of $28.10 implying +14.3% upside. Even the lowest target of $25.00 sits above the current $24.59, signaling universal conviction.
- Strong cash generation and balance sheet: Trailing free cash flow of $1.615 billion and Q2 2026 operating cash flow of $1.506 billion comfortably funded $314.6 million capex, $134.2 million dividends, and $549.7 million debt repayment. Debt-to-equity is a conservative 0.36.
Bearish
- Pinned to 52-week high, extended: At $24.59, the stock sits at 99.8% of its 52-week range ($12.04-$24.645) after a 103% one-year run. This leaves little margin for error and high vulnerability to profit-taking on any disappointment.
- Earnings heavily oil-price dependent: Oil sales of $1.228 billion dominate the revenue mix, while natural gas sales were negative at -$18.5 million. The 55% revenue growth is levered to crude realizations, making earnings highly cyclical and sensitive to oil price normalization.
- Earnings volatility and weak Q1: Q1 2026 net income collapsed to $43.6 million (3.14% margin) from $792.5 million in Q2, showing extreme quarter-to-quarter earnings volatility. Trailing EPS of $0.093 is distorted by this weak quarter, and the PEG ratio of -0.72 is meaningless.
- Liquidity below 1.0 and payout risk: Current ratio of 0.782 means current liabilities exceed current assets, a working-capital concern. The 4.46% dividend yield carries a 47.9% payout ratio, which could be strained if oil prices fall and cash flow compresses.
PR Technical Analysis
Permian Resources is in a powerful, sustained uptrend, with the stock up 103.39% over the past year and 70.76% year-to-date, dramatically outperforming the S&P 500's 15.53% and 11.93% respective gains. At $24.59, the stock is trading at approximately 99.8% of its 52-week range (52-week low of $12.04, 52-week high of $24.645), effectively pinned to its highs and reflecting maximum momentum positioning. This near-high placement signals strong trend conviction but also leaves little margin for error, as the stock is extended and vulnerable to profit-taking on any disappointment. Recent momentum is accelerating rather than fading: the stock gained 7.15% over the past month and 21.67% over three months, with the one-month move outpacing the S&P 500's 1.22% by 5.93 percentage points and the three-month relative strength reaching 18.98 points. The most recent session saw a 4.15% single-day jump from a $23.61 previous close to $24.59 on volume of 8.61 million shares, confirming that buyers are pressing the advance rather than distributing. Notably, the one-month trend reinforces rather than diverges from the one-year trend, a hallmark of a healthy, broad-based uptrend. Key resistance sits at the 52-week high of $24.645, and a decisive breakout above that level would signal a fresh leg higher and likely invite momentum-driven flows; support is anchored at the 52-week low of $12.04, with intermediate support likely in the $21-$22 zone where the stock consolidated in late September. The beta of 0.649 is a critical risk-management insight: despite the stock's explosive absolute returns, it is roughly 35% less volatile than the market, meaning the rally has been driven by idiosyncratic fundamental re-rating rather than high-beta market exposure, which supports larger position sizing but also means the stock may lag in a broad risk-on melt-up. The maximum drawdown of -20.38% over the period underscores that even this low-beta name can experience sharp air pockets.
Beta
0.65
0.65x market volatility
Max Drawdown
-20.4%
Largest decline past year
52-Week Range
$12-$25
Price range past year
Annual Return
+95.2%
Cumulative gain past year
| Period | PR Return | S&P 500 |
|---|---|---|
| 1m | +14.6% | -1.2% |
| 3m | +14.3% | +3.4% |
| 6m | +19.0% | +7.0% |
| 1y | +95.2% | +14.4% |
| ytd | +69.4% | +12.0% |
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PR Fundamental Analysis
Revenue is on a steep and accelerating growth trajectory: Q2 2026 revenue of $1.858 billion grew 55.15% year-over-year versus Q2 2025's $1.198 billion, and rose 33.9% sequentially from Q1 2026's $1.388 billion. The multi-quarter arc shows Q3 2025 at $1.322 billion, Q4 2025 at $1.169 billion, Q1 2026 at $1.388 billion, and Q2 2026 at $1.858 billion, confirming a clear reacceleration after a soft fourth quarter. Segment data reveals the growth engine is overwhelmingly oil: oil sales of $1.228 billion dominate the mix, supplemented by NGL sales of $154 million and purchased oil and gas of $25 million, while natural gas sales were actually negative at -$18.5 million, likely reflecting hedging losses or gathering and processing deductions. This oil-weighted revenue profile means the investment case is highly levered to crude realizations, and the 55% growth rate implies the company is capturing both volume expansion and favorable price/mix dynamics. Profitability has inflected sharply: Q2 2026 net income reached $792.5 million with a 42.65% net margin, a dramatic improvement from Q1 2026's $43.6 million and 3.14% margin, and well above Q2 2025's $207.1 million. Gross margin on the reported income statement basis was 80.07% in Q2 2026 versus 37.36% in Q2 2025, though this metric is volatile quarter-to-quarter (Q1 2026 was 44.54%, Q4 2025 was 26.84%) due to how cost of revenue is classified; the more stable operating margin of 49.95% in Q2 2026 versus 24.84% a year earlier is the cleaner read on operating leverage. The company is solidly profitable with trailing EPS of $0.093 (distorted by the weak Q1) against forward EPS estimates of $2.09, and the 18.46% net margin and 29.04% operating margin in the valuation dataset confirm a business that is generating real earnings power at current commodity prices. Balance sheet and cash flow health are strong: debt-to-equity is a conservative 0.36, ROE is 9.10% and ROA 7.54%, and trailing free cash flow is $1.615 billion, which against a market cap of roughly $10.0-$17.8 billion implies a robust FCF yield. Q2 2026 operating cash flow of $1.506 billion comfortably funded $314.6 million of capex, $134.2 million of dividends, and $549.7 million of debt repayment, demonstrating self-funding growth capacity. The main blemish is liquidity: the current ratio of 0.782 is below 1.0, meaning current liabilities exceed current assets, though for an E&P with strong operating cash flow and modest leverage this is a working-capital artifact rather than a solvency concern. The 4.46% dividend yield with a 47.9% payout ratio adds an attractive income component to the total-return story.
Quarterly Revenue
$1.9B
2026-06
Revenue YoY Growth
+55.1%
YoY Comparison
Gross Margin
80.1%
Latest Quarter
Free Cash Flow
$1.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is PR Overvalued?
Because net income is positive, the PE ratio is the appropriate primary metric, and Permian Resources trades at a trailing PE of 10.71x against a forward PE of 10.63x. The unusually narrow gap between trailing and forward multiples implies the market is not pricing in meaningful earnings growth from here, which is notable given consensus forward EPS of $2.09 versus a trailing figure depressed by the weak Q1 2026 quarter; essentially, the forward multiple already capitalizes the earnings recovery that has begun to materialize. The PEG ratio of -0.72 is not analytically meaningful given the sign distortion from the trailing earnings base and should be disregarded in favor of the absolute multiple and peer context. On a peer comparison basis, the stock trades at a PS ratio of 1.98x, EV/Sales of 3.97x, and EV/EBITDA of 3.67x, with a P/B of just 0.98x and P/CF of 2.78x. The EV/EBITDA of 3.67x is remarkably low for a company growing revenue 55% year-over-year, and the sub-1.0x price-to-book suggests the market is valuing the company near or below its accounting net asset value, a classic characteristic of cyclical E&P names where investors discount reserve values for commodity price risk. Relative to the broader Energy sector, where E&P multiples often run in the 5-7x EV/EBITDA range, Permian Resources screens at a discount, which is arguably unjustified given its superior growth, 18.5% net margin, and 29% operating margin. Historical context is instructive: the stock's PE ratio has ranged from roughly 4.8x (Q2 2026) to 99.3x (Q1 2026, when earnings collapsed) over the past several years, with the current 10.71x sitting in the middle of that band but well above the 6-8x levels seen in 2023-2024. The PS ratio of 1.98x, however, is near the low end of its historical range (which has run from roughly 3.5x to 12.5x), suggesting that while earnings-based multiples have normalized, sales-based valuation remains depressed, consistent with a market that is skeptical of margin durability. The combination of a low absolute multiple, a discount to sector EV/EBITDA norms, and a PS ratio near historical lows suggests the stock is not expensive on fundamentals, but the market is clearly applying a cyclical discount that will only compress if oil prices hold.
PE
10.7x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 2x~25x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
3.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on earnings concentration and volatility. Oil sales of $1.228 billion dominate the revenue mix while natural gas sales were negative at -$18.5 million, meaning the 55.15% YoY revenue growth and 42.65% net margin are highly levered to crude realizations. The quarter-to-quarter swing from $43.6 million net income in Q1 2026 to $792.5 million in Q2 demonstrates extreme earnings volatility, and the current ratio of 0.782 signals that current liabilities exceed current assets. The 4.46% dividend yield with a 47.9% payout ratio could be strained if cash flow compresses, though debt-to-equity of 0.36 and $1.615 billion trailing FCF provide a cushion.
Market and competitive risks include valuation compression and commodity cyclicality. At 3.67x EV/EBITDA and 0.98x P/B, the stock already trades at a cyclical discount, but a re-rating lower is possible if oil prices normalize; the PS ratio of 1.98x is near historical lows, reflecting market skepticism about margin durability. Beta of 0.649 means the stock is roughly 35% less volatile than the market, but the 103% one-year gain has been driven by idiosyncratic re-rating, leaving it exposed to sector rotation if energy loses favor. Goldman Sachs' March 2026 upward revision to oil price forecasts is a tailwind, but it also raises the question of how much of that macro benefit is already priced in after the stock's 70.76% YTD gain.
Worst-case scenario: a sharp decline in oil prices would compress realizations, reverse the Q2 2026 earnings windfall, and likely trigger a de-rating from the current 10.71x PE toward the 4.8x low seen in Q2 2026. Combined with the stock's extension at 99.8% of its 52-week range, a reversion to the 52-week low of $12.04 would represent a -51% loss from $24.59. Even a more moderate pullback to the $21-$22 consolidation zone would be a -11% to -15% drawdown, and the maximum drawdown of -20.38% over the past period shows that sharp air pockets are possible even for this low-beta name.
FAQ
The most severe risk is oil price dependence: oil sales of $1.228 billion dominate revenue, and a price decline could compress the 42.65% net margin toward the Q1 2026 level of 3.14%. Second is earnings volatility, with net income swinging from $43.6 million in Q1 2026 to $792.5 million in Q2, making results unpredictable. Third is liquidity risk, with a current ratio of 0.782 indicating current liabilities exceed current assets. Fourth is valuation compression risk, as the stock at 99.8% of its 52-week range has little margin for error and could revert toward the $12.04 low, a -51% downside, in a severe scenario.
The 12-month forecast has three scenarios: a 30% probability bull case targeting $28.10-$31.00 if oil prices remain elevated and revenue growth stays above 40%; a 50% probability base case targeting $25.00-$28.10 if oil moderates and revenue growth decelerates to 20-30%; and a 20% probability bear case targeting $12.04-$25.00 if oil prices decline sharply. The base case is most likely, assuming oil prices stabilize in the $70-80/bbl range and margins compress toward mid-cycle levels. The key assumption is that the Q2 2026 earnings surge is partially durable rather than a pure cyclical windfall.
PR appears undervalued on fundamental metrics: 10.71x trailing PE, 3.67x EV/EBITDA, and 0.98x P/B are all below typical E&P peer levels of 5-7x EV/EBITDA. The PS ratio of 1.98x is near the low end of its historical range of 3.5x-12.5x, suggesting the market is applying a cyclical discount. However, the stock's 103% one-year gain and position at 99.8% of its 52-week range mean the near-term valuation is stretched relative to its own history. The market appears to expect oil prices to hold and earnings to remain elevated; if that assumption falters, the discount could widen further.
From a risk/reward perspective, PR offers +14.3% upside to the $28.10 average analyst target, with even the lowest target of $25.00 above the current $24.59. The valuation is attractive at 3.67x EV/EBITDA and 0.98x P/B, well below E&P peer norms, and the 55.15% revenue growth and 42.65% net margin demonstrate strong earnings power. However, the stock is pinned at 99.8% of its 52-week range after a 103% one-year run, and the biggest downside risk is oil price normalization, which could compress earnings toward the Q1 2026 level of $43.6 million. It is a good buy for investors with a medium-to-long-term horizon who can tolerate commodity cyclicality and seek a 4.46% dividend yield, but near-term traders should be cautious given the extended valuation.
PR is better suited for medium-to-long-term investment given its growth stage, 4.46% dividend yield, and oil-price cyclicality. The beta of 0.649 indicates lower volatility than the market, but the maximum drawdown of -20.38% and the 103% one-year gain suggest sharp swings are possible. Earnings visibility is limited by commodity prices, making short-term trading risky given the stock's extension at 99.8% of its 52-week range. A suggested minimum holding period of 12-18 months allows time for the earnings recovery to be validated and for oil price cycles to play out, while capturing the dividend.