KGS
Kodiak Gas Services, Inc.
$73.71
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 274.7% above fair value
You pay
$73.71
Bear
$11.18
Fair
$19.67
Bull
$30.34
Bear
$11.18
-84.8%
FCF $37M × 10x
Fair
$19.67
-73.3%
FCF $48M × 13x
Bull
$30.34
-58.8%
FCF $59M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
155.7x
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 $75.20 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $19.67 per share.
Warnings
If oil drops to $60/barrel, the stock could fall -96%. 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 $75.20 (from 9 analysts). Our estimate is 92% 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