📊 EPSN Key Takeaways
Is EPSN a Good Investment? Thesis Analysis
Epsilon Energy demonstrates solid operational cash generation with a 56.8% FCF margin and strong interest coverage, indicating robust operational efficiency and minimal financial distress risk. However, profitability metrics are concerning with a 2.9% net margin, near-flat net income growth, and significantly declining EPS (-71% YoY), suggesting the company is not effectively converting revenue growth into shareholder returns. The balanced sheet is healthy with no debt, but the weak ROE (1.1%) and ROA (0.8%) indicate poor capital efficiency and raise questions about the sustainability of current operations.
Why Buy EPSN? Key Strengths
- Exceptional free cash flow margin of 56.8% demonstrates strong operational cash generation relative to revenue
- Zero debt and Debt/Equity ratio of 0.0x provides substantial financial flexibility and eliminates default risk
- Outstanding interest coverage of 491.0x confirms minimal financial stress and strong debt servicing capability
- Healthy liquidity position with current ratio of 1.93x and cash of $12.8M ensures short-term solvency
EPSN Investment Risks to Consider
- Severe EPS decline of 71% YoY despite flat net income growth suggests significant equity dilution or share issuance
- Weak profitability metrics with 2.9% net margin and minimal revenue growth of 2.6% YoY indicate limited earnings power
- Extremely low return metrics (ROE 1.1%, ROA 0.8%) suggest poor capital allocation and marginal value creation for shareholders
- Commodity price exposure in crude petroleum and natural gas sector creates earnings volatility and limited control over pricing
- Heavy insider trading activity (16 Form 4 filings in 90 days) may indicate uncertainty or strategic shifts
Key Metrics to Watch
- Net profit margin trend and ability to expand profitability relative to revenue growth
- Return on equity and return on assets to assess capital efficiency improvements
- Diluted shares outstanding changes to understand EPS accretion/dilution drivers independent of earnings
- Operating cash flow sustainability and capital allocation decisions
- Commodity price exposure and production volume trends in underlying crude and natural gas operations
EPSN Financial Metrics
💡 AI Analyst Insight
The 56.8% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
EPSN Profitability Ratios
EPSN vs Energy Sector
How Epsilon Energy Ltd. compares to Energy sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is EPSN Overvalued or Undervalued?
Based on fundamental analysis, Epsilon Energy Ltd. has mixed fundamental signals relative to the Energy sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
EPSN Balance Sheet & Liquidity
EPSN 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: Epsilon Energy Ltd.'s revenue has grown significantly by 18% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.31 reflects profitable operations.
EPSN Growth Metrics (YoY)
EPSN Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $7.3M | $366.0K | $0.02 |
| Q2 2025 | $7.3M | $815.7K | $0.04 |
| Q1 2025 | $8.0M | $1.5M | $0.07 |
| Q3 2024 | $6.3M | $366.0K | $0.02 |
| Q2 2024 | $6.5M | $430.6K | $0.02 |
| Q1 2024 | $8.0M | $1.5M | $0.07 |
| Q3 2023 | $6.3M | $388.8K | $0.02 |
| Q2 2023 | $6.5M | $430.6K | $0.02 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
EPSN Capital Allocation
EPSN SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for Epsilon Energy Ltd. (CIK: 0001726126)
📋 Recent SEC Filings
❓ Frequently Asked Questions about EPSN
What is the AI rating for EPSN?
Epsilon Energy Ltd. (EPSN) has an AI rating of HOLD with 65% confidence, based on fundamental analysis of SEC EDGAR filings.
What are EPSN's key strengths?
Claude: Exceptional free cash flow margin of 56.8% demonstrates strong operational cash generation relative to revenue. Zero debt and Debt/Equity ratio of 0.0x provides substantial financial flexibility and eliminates default risk.
What are the risks of investing in EPSN?
Claude: Severe EPS decline of 71% YoY despite flat net income growth suggests significant equity dilution or share issuance. Weak profitability metrics with 2.9% net margin and minimal revenue growth of 2.6% YoY indicate limited earnings power.
What is EPSN's revenue and growth?
Epsilon Energy Ltd. reported revenue of $36.8M.
Does EPSN pay dividends?
Epsilon Energy Ltd. does not currently pay dividends.
Where can I find EPSN SEC filings?
Official SEC filings for Epsilon Energy Ltd. (CIK: 0001726126) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is EPSN's EPS?
Epsilon Energy Ltd. has a diluted EPS of $0.30.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is EPSN a good stock to buy right now?
Based on our AI fundamental analysis in March 2026, Epsilon Energy Ltd. has a HOLD rating with 65% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is EPSN stock overvalued or undervalued?
Valuation metrics for EPSN: ROE of 1.1% (sector avg: 14%), net margin of 2.9% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy EPSN stock in 2026?
Our dual AI analysis gives Epsilon Energy Ltd. a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is EPSN's free cash flow?
Epsilon Energy Ltd.'s operating cash flow is $20.9M, with capital expenditures of N/A. FCF margin is 56.8%.
How does EPSN compare to other Energy stocks?
Vs Energy sector averages: Net margin 2.9% (avg: 12%), ROE 1.1% (avg: 14%), current ratio 1.93 (avg: 1.3).