NPKI
NPK International Inc.
$15.52
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 321.9% above fair value
You pay
$15.52
Bear
$2.04
Fair
$3.68
Bull
$5.74
Bear
$2.04
-86.8%
FCF $20M × 10x
Fair
$3.68
-76.3%
FCF $26M × 13x
Bull
$5.74
-63.0%
FCF $32M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
51.0x
Summary
At $75/bbl oil with a 13x EV/FCF multiple, intrinsic value is $3.68 per share. Range: $2.04 (bear) to $5.74 (bull).
Warnings
If oil drops to $60/barrel, the stock could fall -87%. 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.
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