EPM
Evolution Petroleum Corporation
$4.41
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 46.5% above fair value
You pay
$4.41
Bear
$0.96
Fair
$3.01
Bull
$5.73
Bear
$0.96
-78.1%
FCF $8M × 8x
Fair
$3.01
-31.7%
FCF $11M × 11x
Bull
$5.73
+30.0%
FCF $15M × 14x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
16.9x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $4.93 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $3.01 per share.
Warnings
If oil drops to $60/barrel, the stock could fall -82%. Check whether the company can survive at low prices and still pay its dividend.
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Wall Street's average price target is $4.93 (from 9 analysts). Our estimate is 49% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential