HPK · HighPeak Energy
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $8.82
Note written ·
Price against the kill line
6.8% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $8.82, on record since 11 November 2026. The shares are up 4.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $8.82, the 50-day average of closes as of 11 November 2026, which would show the shares leading the S&P 500 and prove this call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Energy
Quarter to 30 September 2026, filed 9 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 257
- Revenue, change on a year (%)
- +23.0
- Operating margin (%)
- 27.9
- Net cash, cash less debt ($M)
- −1,043
- Enterprise value to operating income (×)
- 12.1
All filed numbers
What HighPeak Energy reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 257 | +23.0 | 27.9 |
| first filed | 272 | +25.8 | 29.5 |
| first filed | 216 | −20.7 | 16.7 |
| first filed restated | 209 | −23.1 | 15.6 |
| first filed restated | 217 | −21.4 | 20.1 |
| Pre-tax income ($M) | −71.1 |
| Net income ($M) four quarters: −126 | −55.7 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +0.4 |
| Operating cash flow ($M) | 383 |
| Capital spending ($M) | Not reported |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 117 |
| Debt ($M) long-term debt | 1,160 |
| Net cash, cash less debt ($M) | −1,043 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 110 |
| Inventory ($M) | 4.1 |
| Shareholders' equity ($M) | 1,496 |
| Market value ($M) | 1,040 |
| Enterprise value, market value plus net debt ($M) | 2,083 |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | 12.1 |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 0.7 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 5.9% of shares outstanding sold short, 11.9 days of average trading to cover, −7.1% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $0 |
The thesis
HighPeak Energy's shares are more likely to lag the S&P 500 over the next three months. The third quarter beat estimates but ended in a net loss after hedge losses, and free cash flow did not cover the quarter's debt payment. The test is the refinancing closing, which the company expects in November 2026, and the final terms common holders get.
HighPeak reported on 9 November 2026 a third-quarter net loss of $55.7 million, or $0.44 per diluted share, after a $107.5 million net loss on derivatives. Adjusted earnings of $0.32 per share beat a $0.07 estimate, and sales of $256.82 million beat a $251.85 million estimate, according to an earnings headline the same day. Free cash flow was $22.4 million against $30 million of term-loan amortization paid in the quarter.
The release says the $450 million preferred investment and $800 million credit facility are "expected to close later this month." Closing would repay the term loan, which the company now puts at $1.2 billion. Common holders would then rank behind preferred stock that converts at $9.50 per share.
The price shows the market's view. The shares closed at $7.36 on 11 November 2026, below the $9.50 conversion price the preferred investors agreed to on 6 October 2026. The market values the common shares under the price the incoming investors agreed to convert at.
Bullish and bearish views on HighPeak Energy, Inc.
The bull case on HighPeak Energy, Inc. (HPK), in brief: Third quarter beat and guidance rose. The bear case: hedges cap the benefit of higher crude.
Bull case
- Third quarter beat and guidance rose. Adjusted net income was $38.5 million and earnings before interest, taxes, depreciation, amortization and exploration (EBITDAX) $163.8 million, up from $147.6 million in the second quarter, according to the 9 November 2026 release. Full-year production guidance rose to 44,500–45,500 barrels of oil equivalent per day (Boe/d), and lease operating expense guidance fell to $8.00–$8.25 per Boe.
- Refinancing is close to done. The 9 November 2026 release says the transactions are expected to close in November 2026. The package retires the term loan and its $30 million quarterly amortization, using preferred proceeds and a facility committed by Citibank and Fifth Third Bank on 6 October 2026.
- Debt fell during the quarter. Debt on 30 September 2026 was $120.0 million current and $1,040.3 million long-term, against $1,068.9 million long-term on 30 June 2026. The quarter's $30 million repayment accounts for the drop.
- A sale process has not been closed. Reuters reported on 17 September 2026, citing three people familiar with the matter, that HighPeak was exploring a sale after receiving takeover interest. The 9 November 2026 release says nothing about it.
Bear case
- Hedges cap the benefit of higher crude. Crude realized $86.86 per barrel before derivatives in the third quarter and $77.64 after them, according to the 9 November 2026 release. Fourth-quarter 2026 swaps cover 9,000 barrels per day at $74.01 West Texas Intermediate (WTI), and crude hedges run through May 2028.
- Free cash flow trailed debt service. Third-quarter free cash flow was $22.4 million, or $58.4 million before working-capital changes, while amortization took $30 million. Cash fell from $146.3 million on 30 June 2026 to $117.4 million on 30 September 2026.
- Spending guidance went up. The company raised its 2026 capital expenditure guidance to $310–$320 million on 9 November 2026, while production averaged 44,181 Boe/d in the third quarter, below the raised full-year range.
- Common holders take the junior seat. The preferred stock pays a 6% dividend and ranks ahead of the common shares. Tempo reported on 6 October 2026 that Danantara's $250 million portion alone converts into 26.32 million common shares, at least 15% of the company.
- Crude has fallen hard. Yahoo Finance reported that WTI fell 15% from above $104 on 30 October 2026 to about $88 on 4 November 2026, its worst three-day drop since late 2021.
Price setup
The shares closed at $7.36 on 11 November 2026, after $6.76 on 9 November 2026, the session before the report, and $6.82 on 10 November 2026. The report brought a modest rise. The shares still sit far under the 52-week intraday high of $12.03 on 26 October 2026, 38.8% below it.
The last close is just above the 200-day moving average of $7.21 and below the 50-day moving average, both as of 11 November 2026. Over three months the shares are down 1.7%, from $7.49 on 13 August 2026. The 52-week closing low is $3.89 on 22 January 2026.
The $9.50 conversion price sits above the last close. A close back over the 50-day average would mean the shares had recovered most of their November fall.
Catalysts ahead
- ~30 November 2026 (est.): Closing of the $450 million Series A preferred investment and $800 million reserve-based credit facility. HighPeak expects closing in November 2026. Closing repays the term loan and ends its $30 million quarterly amortization; the closing filing shows the final facility size and terms for common holders. A delay or a smaller facility would weaken the balance-sheet case.
What would change the view
A daily close above $8.82, the 50-day average of closes as of 11 November 2026, which would show the shares leading the S&P 500 and prove this call wrong.
What it trades with
The shares' largest moves in 2026 have followed crude headlines. StockStory tied the falls of 27 May 2026 and 18 June 2026 to US-Iran negotiations, and paired HighPeak with Kosmos Energy in the June report. Yahoo Finance reported that oil and the S&P 500 have moved in opposite directions more often in 2026 than in any year since at least 2001. A crude-driven stock can therefore diverge sharply from the index in either direction.
Hedges weaken that link. The third quarter's $9.22 per barrel gap between crude realized before and after derivatives shows how much of a crude rally the swaps absorb.
The refinancing is a company-specific factor that does not depend on oil's daily direction. The new facility is reserve-based, so lasting lower crude bears on how much it can lend. A final facility at the full $800 million would show that concern did not bite.
The evidence, claim by claim (8)
- Q3 2026 net loss was $55.7 million, or $0.44 per diluted share, after a $107.5 million net loss on derivatives; adjusted net income was $38.5 million, or $0.32 per share, and EBITDAX $163.8 million. HighPeak Q3 2026 results, 8-K exhibit, 9 November 2026 · as of
- Q3 2026 adjusted EPS of $0.32 beat a $0.07 estimate, and sales of $256.82 million beat a $251.85 million estimate. Earnings headline, 9 November 2026 · as of
- Q3 2026 free cash flow was $22.4 million ($58.4 million before working-capital changes), and the company repaid $30 million of debt in the quarter. HighPeak Q3 2026 results, 8-K exhibit, 9 November 2026 · as of
- Debt was $120.0 million current plus $1,040.3 million long-term, against cash of $117.4 million. HighPeak Q3 2026 results balance sheet, 9 November 2026 · as of
- 2026 guidance: production raised to 44,500–45,500 Boe/d, lease operating expense lowered to $8.00–$8.25 per Boe, capital expenditure raised to $310–$320 million. HighPeak Q3 2026 results, 8-K exhibit, 9 November 2026 · as of
- Q3 2026 crude realized $86.86 per barrel before derivatives and $77.64 after; Q4 2026 crude swaps cover 9,000 barrels per day at $74.01 WTI. HighPeak Q3 2026 results, 8-K exhibit, 9 November 2026 · as of
- HighPeak said the $450 million preferred investment and $800 million credit facility, which repay the term loan, are expected to close later in November 2026. HighPeak Q3 2026 results, 8-K exhibit, 9 November 2026 · as of
- Danantara's $250 million portion of the preferred converts into 26.32 million common shares, at least 15% of HighPeak; Energi Mega Persada invests $200 million. Tempo English, 6 October 2026 · as of
Sources
- HighPeak Energy, Inc. - Form 8-K - FY2026 · sec.gov
- HighPeak Energy Announces Comprehensive Refinancing · energydigital.com
- HighPeak Energy, Inc. - Form 8-K - FY2026 · sec.gov
- Oil bounces after its worst 3-day drop since 2021, but energy stocks aren't joining in · finance.yahoo.com
- Why HighPeak Energy (HPK) Shares Are Trading Lower Today · stockstory.org ·
- HighPeak Energy and Kosmos Energy Shares Are Falling, What You Need To Know · stockstory.org ·
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