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Torchlight energy march 1211/24/2023 ![]() Year-to-date, TRCH has gained 1,317.14%, versus a 12.93% rise in the benchmark S&P 500 index during the same period.PLANO, TX / ACCESSWIRE / Ma/ Torchlight Energy Resources, Inc. TRCH shares fell $9.92 (-100.00%) in premarket trading Tuesday. Given these factors, we think the stock could retreat from its record levels and, hence, it is best avoided now. Furthermore, uncertainty surrounding TRCH’s recent business combination with Metamaterial could be a cause of concern for investors. However, the company’s weak fundamentals do not justify its stock’s massive gains. TRCH’s steep rise in stock price has been driven primarily by the meme craze. TRCH is ranked #94 of 95 stocks in the C-rated Energy – Oil & Gas industry.Ĭlick here to view the top-rated stocks in the Energy – Oil & Gas industry. In addition to the grades we’ve highlighted, one can check out additional TRCH ratings for Sentiment, Growth, and Momentum here. Also, it has an F grade for Quality, which is in sync with its lower-than-industry asset turnover ratio. The company has a Value grade of F, reflective of its stretched valuation. This reflects that the stock is more prone to volatility versus its peers. Our proprietary rating system also evaluates each stock based on eight different categories. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree. TRCH has an overall F rating, which translates to Strong Sell in our POWR Ratings system. In terms of trailing-12-month Price/Book, TRCH’s 16.47x is 943.9% higher than the 1.58x industry average.Ĭonsensus Price Target Indicates Potential DownsideĬurrently trading at $9.92, analysts expect the stock to hit $2.7 in the near term, indicating a 72.8% potential decline. Moreover, its 5,821.73 trailing-12-month Price/Sales multiple is significantly higher than the 1.70 industry average. ![]() In terms of trailing-12-month EV/Sales, TRCH is currently trading at 8,087.14x, significantly higher than the 3.19x industry average. Its 4,052.7% CAPEX/Sales ratio is significantly higher than the 9% industry average. And TRCH’s cash from operations is negative $4.56 million. Its ROE, ROA and ROTC are negative 32%, 19.9% and 6.7%, respectively. The company’s trailing-12-month gross profit margin stands at negative 21.5%. The acquisition could fundamentally change TRCH because it plans to sell off its oil and gas assets. TRCH’s shareholders are expected to retain an approximate 25% equity interest in the combined company. In December 2020, TRCH inked a merger agreement with Canada-based Metamaterial Inc., the completion of which will deliver to shareholders of Metamaterial holding an approximate 75% equity interest in the combined company. So, TRCH’s massive rally should be expected to be short-lived. Meme stocks are very volatile given that they are touted on social media platforms without necessarily possessing solid underlying fundamentals. While the frenzy looks tempting, playing the short squeeze is certainly not a surefire path to long-term gains. It is one of the latest additions to the meme club following in the footsteps of other names, including GameStop Corporation ( GME ) and AMC Entertainment Holdings ( AMC ). TRCH’s stock skyrocketed with retail traders taking interest in the stock. Here is what we think could influence TRCH’s performance in the near term: energy industry has been gaining momentum on soaring oil prices and favorable government policies, TRCH has not been able to capitalize on the tailwinds and is currently generating a loss. Meanwhile, its staggering losses and weak cash balance continue to be a concern for investors.Īlthough the U.S. Under the agreement, TRCH’s shareholders will retain only a 25% equity interest in the combined business. In December, the company agreed to a business combination with Metamaterial Inc. TRCH’s stock has rallied 1,317.1% year-to-date and 188.9% over the past month on the meme stock frenzy. ![]() The company holds interest in the Orogrande project in New Mexico and the Hazel project in Sterling, Tex. (TRCH) explores for, acquires and develops oil and natural gas properties in the United States. Oil and natural gas company Torchlight Energy Resources, Inc. However, given the company’s weak fundamentals and lofty valuation, will the stock continue to soar, or will it sink soon? Read ahead to learn more. The share price of oil and gas exploration and production company Torchlight Energy Resources (TRCH) has leapt 1,317.1% so far this year thanks to a reinvigorated meme stock frenzy. ![]()
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