8 Most Undervalued Oil Stocks To Buy According To Analysts

03. Ring Energy, Inc. (NYSE:REI)

Upside Potential: 83%

Forward Price to Earnings (P/E) ratio: 3.49

Number of Hedge Fund Holders: 11

Ring Energy, Inc. (NYSE:REI) is an attractive pick for our list of 8 most undervalued Oil stocks to buy according to analysts, boasting a forward P/E ratio of 3.49 as of October 14, 2024. With a target price of $3.00 and the stock currently trading at $1.64, it offers an impressive 83% upside potential. Headquartered in The Woodlands, Texas, Ring Energy, Inc. (NYSE:REI) focuses on acquiring, developing, and producing oil and natural gas across a strategic land base of 56,711 net developed acres and 2,668 net undeveloped acres. Its operations are centered in key Texas counties such as Andrews, Gaines, and Ward, along with additional assets in Lea County, New Mexico—prime locations in the prolific Permian Basin, which accounts for nearly half of the U.S. daily oil production.

Ring Energy, Inc. (NYSE:REI) Q2 2024 results highlight the company’s solid financial and operational performance. The company reported net income of $22.4 million, translating to $0.11 per diluted share, with adjusted net income slightly higher at $23.4 million, or $0.12 per share. Total sales volumes came in at 19,786 barrels of oil equivalent per day (BOEPD), a 4% increase from the previous quarter, driven by robust oil production averaging 13,623 barrels per day—a 2% jump from Q1 and exceeding prior guidance.

The company’s ability to generate cash is another strong point, posting $37 million in adjusted free cash flow during the first half of 2024—up 60% year-over-year. This growth was partly fueled by the strategic acquisition of Founders in August 2023, which has strengthened Ring’s foothold in the oil market. Operationally, Ring Energy, Inc. (NYSE:REI) also completed 11 wells in Q2, keeping pace with its production targets and enhancing future output potential.

Ring Energy, Inc. (NYSE:REI) market confidence is rising, with hedge fund interest increasing to 11 holders by the end of Q2, up from nine in the previous quarter. With the U.S. Energy Information Administration forecasting an 8% rise in Permian Basin crude output in 2024, Ring Energy, Inc. (NYSE:REI) focus on high-value formations aligns perfectly with broader market trends. As the company scales production and maintains operational efficiency, it stands out as a compelling choice among undervalued oil stocks with significant upside potential.