Kosmos Energy Ltd. (NYSE: KOS) have slipped -13.22% since today opening bell. First, let’s talk about the stock movement. The company report on September 2, 2020 that Kosmos Energy to Present at Barclays CEO Energy-Power Conference. As its trading volume dropped significantly and passed its daily average at 4.5 million shares. Before peaking at $7.55 per share as its 52 week high, the Energy giant hit all-time low of $0.50 per share in 03/18/20. As of now, KOS trading high at $1.385 per share and has seemingly settled at around $1.21 per share, still down from its level of $1.9500 at which it had traded for months.
Kosmos Energy Ltd. (KOS) has been in rally mode, as indicated by the relationship between its 200-day and 20-day major moving averages. That said, over the past 30 days, KOS shares have fallen -89.75%. The stock has moved down -80.42 over the trailing 12 months, falling behind the rest of the market by 438.29%. It has also trailed competitors and similar names by -63.5%.
Looking at Key Indicators
Naturally, a cursory survey of superficial price points from the chart don’t say a whole lot about where KOS shares could be headed. That’s why we need to dig a little deeper and check out what some of the most important momentum indicators seem to be saying.
The relationship between changes in price and the underlying strength or weakness over periods can point out deeper factors in the pattern that can often generate insights for technical analysts through momentum factors. Two of our favorite oscillating indicators are the Relative Strength Index (RSI) and the Stochastic %k Oscillator. In each case, the scoring is on a scale somewhere between 0 and 100, and in case, the levels to watch are “70” and “30”, with the former representing an “overbought” state and the latter presenting an “oversold” state.
With that in mind, here is a look at KOS shares from this perspective. The 20-day RSI reading for KOS is currently 33.76, which indicates that is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. If we look at the 20-day Stochastic %k measure, we find it at 5.92, which represents another indication of a oversold outlook.
Listening to the Analysts
Right now, KOS shares appear to be trading -61.11% under the average price target for one year ahead from Wall Street analysts, which is at $2.70. On average, Street analysts put their recommendation at 2.40, which is scored on a scale from 1 to 5, with 1 representing a “Strong Buy” and 5 representing a “Strong Sell”.
That suggests analysts are neutral on KOS looking ahead over the coming 12 months.
Assessing the Risk
Risk is an essential factor in comprehensive investment analysis. One of the key factors that analysts consider in determining the systemic risk involved in a stock is called “beta”, which represents an individual stock’s volatility relative to the volatility demonstrated by stocks as an asset class, in general, as a function of broad market data.
KOS, for example, trades right now with a beta of 3.35. The rest of the market is normalized to a beta score of 1.0, which means KOS is more volatile than the average stock. By the same token, KOS should be seen as somewhat more risky for market participants than the average stock.
We would also note that KOS has posted average daily volatility over the past two weeks of 77.75%, or 44.86% less than it has scored on the same measure over the past hundred days.
The Fundamentals in Focus
As we now turn to the fundamental picture, we begin by analyzing it the way one might analyze a building: by starting with the foundation – the balance sheet. Without a strong foundation, the rest of the structure can’t stand.
For KOS, cash levels are currently sitting at 164.28 million. That figure is balanced by 448.92 million in current liabilities. To further round out the picture, total assets are at 3.99 billion and total liabilities sit at 3.53 billion, granting a pretty thorough ground-up sense of the company and how it might withstand challenges ahead, should they appear.
In terms of recent free cash flow, KOS, is currently reporting -199.61 million, which represents a quarterly net change of -64.53 million in cash flowing in the door. In terms of operations, the company reported -62.84 million in net operating cash flow.
Looking at the revenue path, we saw last quarter’s top-line number come in at 127.31 million in total revenues, which represents a y/y quarterly change of 67.84, and a sequential quarterly sales decline of -67.80%.
That brings us to the real meat of the matter: the bottom line. Kosmos Energy Ltd. (KOS) yielded a gross basic income of -117.24 million, which comes on a Cost-of-Goods-Sold number registering at 244.55 million, seated in 405.19 billion total diluted outstanding shares, adding up to earnings per share of -0.99. Notably, the consensus view of analysts looking ahead to next quarter is currently at -0.16.
That allows us to round out this picture with a look at valuations. Based on this data, and the forecasts we have at hand, the coming fiscal year looks to be headed toward -0.3 in total earnings per share.
However, estimates are only guesses about the future. Both business and investment trends are more important to take into consideration.