EPM
Evolution Petroleum Corporation
$3.72
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Mild
·
Conviction
Overvalued
Trading 14.7% above fair value
You pay
$3.72
Bear
$1.17
Fair
$3.24
Bull
$6.01
Bear
$1.17
-68.5%
FCF $10M × 8x
Fair
$3.24
-12.8%
FCF $14M × 11x
Bull
$6.01
+61.5%
FCF $18M × 14x
Adjust Assumptions
75.0$/bbl
11.0x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
12.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$5.00
Divergence from AlphaVal
35%
Summary
At $75/bbl oil with a 11x EV/FCF multiple, intrinsic value is $3.24 per share. Range: $1.17 (bear) to $6.01 (bull).
Warnings
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 $5.00 (from 9 analysts). Our estimate is 35% 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