Coterra Energy Inc. (CTRA) Stock Valuation — DCF Analysis
Oil & Gas Exploration & Production · NYSE
Current Price
$32.56
Intrinsic Value
$41.01
+20.6% margin of safety
COMPETITIVE MOAT
↑Permian Basin Asset Base
Coterra possesses significant, high-quality acreage in the Permian Basin. This provides a long-term, low-cost production advantage.
↑Operational Efficiency
The company demonstrates strong execution in drilling and completions. This translates to lower lifting costs and higher well productivity.
↑Disciplined Capital Allocation
Coterra prioritizes shareholder returns through dividends and buybacks. This financial discipline supports long-term value creation.
INVESTMENT RISKS
↓Commodity Price Volatility
Oil and gas prices are inherently volatile. Fluctuations directly impact Coterra's revenue and profitability.
↓Regulatory Environment
Stricter environmental regulations could increase operating costs. Permitting and compliance challenges may arise.
↓Competition for Resources
Intense competition exists for skilled labor and drilling services. This can lead to higher operational expenses.
Base case
CTRA base case valuation
A base case discounted cash flow model for CTRA estimates an intrinsic value of about $41.01 per share, against a current price of $32.56. The model assumes 8.0% annual free cash flow growth, a 10.0% discount rate, and a 12x exit multiple.
Intrinsic Value
$41.01
Margin of safety
+20.6%
Expected annual return
+4.7%
Base case assumptions: 8.0% annual growth, 10.0% discount rate, 12x exit multiple, 5 year projection. Data as of 2026-05-07.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the CTRA valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Coterra Energy Inc. respond.
Open DCF Calculator for CTRACompany Overview
Operating as an independent entity in the United States, Coterra Energy Inc. is engaged in the upstream sector of the energy industry, specializing in the discovery, extraction, and development of crude oil, natural gas, and natural gas liquids (NGLs). The company's primary operational footprint is concentrated in Pennsylvania's Susquehanna County, within the dry gas window of the Marcellus Shale, where it holds roughly 177,000 net acres. Beyond this, Coterra maintains significant landholdings in other prolific basins, including approximately 306,000 net acres in the Permian Basin and about 182,000 net acres within Oklahoma's Anadarko Basin. Furthermore, in Texas, Coterra manages infrastructure for natural gas and saltwater disposal gathering. Its natural gas output is supplied to a diverse clientele, encompassing industrial consumers, local utilities, energy marketers, prominent energy corporations, pipeline operators, and electricity generating plants. As of year-end 2021, Coterra reported substantial proved reserves totaling roughly 2,892,582 thousand barrels of oil equivalent (MBOE). This figure comprised approximately 189,429 thousand barrels of crude oil and other liquid hydrocarbons, 14,895 billion cubic feet of natural gas, and 220,615 thousand barrels of natural gas liquids. The corporation was established in 1989 and its corporate headquarters are situated in Houston, Texas.
Financial Metrics — CTRA Stock Valuation Data
Revenue/Share (TTM)
$10.13
FCF/Share (TTM)
$2.62
ROIC (TTM)
7.9%
ROE (TTM)
11.3%
P/FCF
12.4x
EV/EBITDA
5.7x
FCF Yield
8.05%
Debt/Equity
0.23x
Based on trailing twelve-month data, CTRA shows a free cash flow per share of $2.62 and a ROIC of 7.9%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 12.4x and FCF yield of 8.05% are important context metrics when evaluating CTRA's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of CTRA?
Coterra Energy Inc. currently generates $2.62 in free cash flow per share. At the current price of $32.56, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is CTRA undervalued?
CTRA trades at a P/FCF ratio of 12.4x with a free cash flow yield of 8.05%. This relatively low P/FCF may suggest the stock is attractively priced relative to its cash generation. However, whether CTRA is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value CTRA stock using DCF?
To perform a DCF valuation on Coterra Energy Inc.: (1) Start with the trailing free cash flow per share ($2.62) as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Exploration & Production industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting CTRA's risk profile — with a debt-to-equity of 0.23x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to CTRA?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Coterra Energy Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Oil & Gas Exploration & Production trends, then discounting those amounts to today's dollars. CTRA's ROIC of 7.9% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect CTRA stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For CTRA, with a debt-to-equity ratio of 0.23x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 5.7x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See CTRA PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Energy valuationsDCF and P/E value CTRA with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-05-07. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.