skip to content
  1. Home
  2. >
  3. Questions
  4. >
  5. PEA: How would you think about this company, in terms of debt? [Pieridae Energy Limited]
You can view 2 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: How would you think about this company, in terms of debt? Too much?

Thanks.
Asked by Riku on December 08, 2023
5i Research Answer:

PEA is a small-cap natural gas producer, net debt is around $174M, the debt/market cap is around 4.0x. Debt/cash flow is less than 2X which is probably manageable unless cash flow declines, which is possible with lower commodity prices. We think the debt level is too high compared to peers. PEA has size risk, cyclicality in its business model, and with the stock down 77% this year it is going to be hard for it to generate any investor interest.