GPRK

We rate GeoPark Ltd (GPRK) as a Hold with a composite score of 64.1/100 at a current price of $8.40. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in value (98th percentile) and quality (88th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (28th percentile) and investment (32th percentile) tempers our overall conviction. We assign a Narrow Moat rating (65/100), High uncertainty, and Standard capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; balance sheet deleveraging progress. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

GeoPark Ltd holds a mid-tier position (#36 of 50) within the Mining sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 64.1/100 places it at rank #343 in our full 7,333-stock universe. At $480M in market capitalization, GeoPark Ltd is a small-cap player in the Mining space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue contraction of -10% combined with momentum at the 28th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

The margin cascade tells an important story: gross margins of 75% (+32.0pp vs sector) narrow to operating margins of 41% (+29.2pp vs sector) and net margins of 14.6%, yielding a gross-to-net conversion rate of 19%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $8.40, GeoPark Ltd appears undervalued relative to its fundamentals. Our value factor score of 98/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 4.5x (a 67% discount to the sector median of 13.7x), EV/EBITDA of 0.4x (discounted to peers), P/B of 2.2x, P/S of 0.2x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to GeoPark Ltd. Key risk factors include significant leverage (262% debt-to-equity). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: significant leverage (262% debt-to-equity). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 53th percentile and quality factor at the 88th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 75% provide a buffer against cost pressures; a 6.65% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate GeoPark Ltd's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 189.6%, and the balance sheet is managed within acceptable parameters (D/E: 262%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; GeoPark Ltd falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 6.65% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, GeoPark Ltd receives a Hold rating with a composite score of 64.1/100 (rank #343 of 7,333). Our quantitative framework assigns a Narrow Moat (65/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 60/100.

Our analysis supports a neutral stance on GeoPark Ltd. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.