Is GeoPark Ltd. overvalued or undervalued?

As of 6 November 2024, GeoPark Ltd. has moved from a fair to a very attractive valuation grade. The company is currently undervalued, with a P/E ratio of 4, significantly lower than its peer SilverBow Resources, Inc., which has a P/E of 5.01. Additionally, GeoPark's EV to EBITDA stands at 1.81, while its closest peer, Vitesse Energy, Inc., has a much higher ratio of 7.49, further indicating that GeoPark is trading at a discount compared to its peers.
GeoPark's strong financial metrics include a remarkable ROCE of 45.15% and an ROE of 42.20%, showcasing its efficient use of capital and profitability. Despite recent stock performance lagging behind the S&P 500, with a year-to-date return of -25.03% compared to the index's 2.44%, the underlying valuation metrics suggest that the stock presents a compelling investment opportunity at its current price of 6.95.