Crescent Energy's Q1 Earnings on Deck: Sell or Hold the Stock?

Crescent Energy Company CRGY is set to report first-quarter 2025 results on May 5, after the closing bell.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 47 cents per share, implying an increase of 2.2% from the year-ago reported number. It witnessed two downward estimate movements in the past 30 days. The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $937.1 million, suggesting a 42.5% uptick from the year-ago actuals.

CRGY beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 82.4%. This is depicted in the graph below:  

Q1 Earnings Whispers for CRGY

Our proven model doesn’t predict an earnings beat for Crescent Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here.

The upstream energy player has an Earnings ESP of 0.00%. CRGY currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Crescent Energy’s Factors to Note

According to the U.S. Energy Information Administration (“EIA”), the monthly average WTI spot prices for January, February and March 2025 were $75.74, $71.53 and $68.24 per barrel, respectively. The figures were significantly higher than break-even oil prices in the shale plays.  

The pricing scenario of oil was likely favorable for Crescent Energy to produce more of the commodity, as the upstream player, having a strong footprint in prolific plays like Eagle Ford and Uinta basins, is focused on spending capital across its oil and gas resources to maximize shareholders’ value.  

The Zacks Consensus Estimate for CRGY’s average daily sales volume of oil for the March quarter is pegged at 103.36 (MBbls/d), significantly higher than 70 MBbls/d in the prior-year quarter.

CRGY’s Price Performance & Valuation

Crescent Energy's stock has slipped 15.9% over the past year compared with the industry’s fall of 27.3%. EOG Resources, Inc. EOG and ConocoPhillips COP, two major upstream players from the same space, plummeted 12.5% and 26.3%, respectively, over the same period.

One-Year Price Chart

Despite the industry’s composite stocks witnessing a steeper decline than CRGY, the stock appears relatively undervalued. The company's current trailing 12-month enterprise value/earnings before interest, tax, depreciation and amortization (EV/EBITDA) ratio is 3.02, reflecting that it is trading at a discount compared to the industry average of 10.63.

Investment Thesis of CRGY

Since 2023-end, Crescent Energy has completed five acquisitions totaling more than $3 billion. This is how the company expanded its presence in the Eagle Ford, among the prolific shale plays in the United States. However, this development is reflecting CRGY’s significant reliance on acquisitions to increase production and reserves, thereby lacking organic growth capabilities. Many investors might get concerned over this development, as organic growth leads to more sustainability and less risky operations. Another thing concerning investors is that although Crescent Energy recently acquired Ridgemar Energy, the integration is still in the very early stages, raising uncertainty regarding the extent of anticipated cost savings that will be realized.

Earnings Dates of Other Upstream Players: COP, EOG

ConocoPhillips is scheduled to report first-quarter 2025 earnings on May 8. COP currently has an Earnings ESP of +2.76% and a Zacks Rank of 3. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

ConocoPhillips’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, and missed the same once, with the average surprise being 2.1%.

EOG Resources is scheduled to report today, after the closing bell. EOG currently has an Earnings ESP of +0.45% and a Zacks Rank of 3.

EOG’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 5.95%.

Last Words

Considering the backdrop, it might be wise for investors to get rid of the stock amid the uncertainties engulfing CRGY’s business prospects.

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This article originally published on Zacks Investment Research (zacks.com).

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