MeritValue

Epsilon Energy Ltd.

EPSNdata completeness 75%8 fiscal years on file

Data notes: no data for concept 'capex'; no data for concept 'totalDebt'

The thesis, from the filings

Epsilon Energy Ltd. earns about 18% on invested capital, and has bought back 4% of its shares over 5 years. The applicable estimate puts fair value near $3.13 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$42.4M1$70M2$30.7M3$31.5M4$51.6M4
Net income$11.6M5$35.4M6$6.95M7$1.93M8−$5.8M8
Operating cash flow$20M9$38M10$18.2M11$16.8M12$20.6M12
Capital expenditure—————
Free cash flow (derived)—————
Total debt—————
Cash & equivalents$26.5M13$45.2M14$13.4M15$6.52M16$8.96M16
Diluted shares23.9M23.4M22.5M21.9M23.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$54.18
your share of equity
Profit it earned you last year
−$2.52
Free cash flow it threw off
—
Debt you’d be carrying
—

10 shares is a claim on $54.18 of net worth that earned you −$2.52 last year.

iii. Is this a good business?
Moat signal · return on invested capital
18% avg · 5y
FY21 22%FY22 60%FY23 8%FY24 2%FY25 -4%

It earned an average 18% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−4% shares · 5y

Share count is down 4% over 5 years — management has been buying back stock, quietly handing owners a bigger slice.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$3.13
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$6.95M
  • growthAssumed0.0%
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001558370-23-004481 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001558370-24-003645 (RevenueFromContractWithCustomerIncludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001558370-25-003308 (RevenueFromContractWithCustomerIncludingAssessedTax)
  4. 10-K · period ending 2024-12-31 · accession 0001104659-26-035794 (RevenueFromContractWithCustomerIncludingAssessedTax)
  5. 10-K · period ending 2021-12-31 · accession 0001558370-23-004481 (NetIncomeLoss)
  6. 10-K · period ending 2022-12-31 · accession 0001558370-24-003645 (NetIncomeLoss)
  7. 10-K · period ending 2023-12-31 · accession 0001558370-25-003308 (NetIncomeLoss)
  8. 10-K · period ending 2024-12-31 · accession 0001104659-26-035794 (NetIncomeLoss)
  9. 10-K · period ending 2021-12-31 · accession 0001558370-23-004481 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-12-31 · accession 0001558370-24-003645 (NetCashProvidedByUsedInOperatingActivities)
  11. 10-K · period ending 2023-12-31 · accession 0001558370-25-003308 (NetCashProvidedByUsedInOperatingActivities)
  12. 10-K · period ending 2024-12-31 · accession 0001104659-26-035794 (NetCashProvidedByUsedInOperatingActivities)
  13. 10-K · period ending 2021-12-31 · accession 0001558370-23-004481 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001558370-24-003645 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001558370-25-003308 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001104659-26-035794 (CashAndCashEquivalentsAtCarryingValue)