APA Corporation (APA) Stock Valuation — DCF Analysis
Oil & Gas Exploration & Production · NASDAQ
Current Price
$37.02
Intrinsic Value
$50.59
+26.8% margin of safety
COMPETITIVE MOAT
↑Suriname's GranMorgu Potential
The GranMorgu project in Suriname offers significant recoverable barrels and production capacity. Reduced near-term spending due to carry agreements enhances its financial appeal.
↑Permian Cost Efficiencies
APA has demonstrated success in cutting costs within the Permian Basin. This operational efficiency can lead to improved profitability and a competitive advantage.
↑Debt Reduction Strategy
The company's focus on reducing debt strengthens its financial position. This deleveraging makes APA more resilient to market downturns and improves its long-term stability.
INVESTMENT RISKS
↓Commodity Price Volatility
As an oil and gas producer, APA's profitability is highly sensitive to fluctuations in global energy prices. Significant price drops can negatively impact revenue and earnings.
↓Geopolitical Instability in Suriname
Operating in Suriname exposes APA to potential political and regulatory risks. Changes in government policy or local instability could disrupt operations and project timelines.
↓Execution Risk on GranMorgu
The successful development and ramp-up of the GranMorgu project are critical. Any delays or cost overruns in this large-scale undertaking could significantly impact APA's outlook.
Base case
APA base case valuation
A base case discounted cash flow model for APA estimates an intrinsic value of about $50.59 per share, against a current price of $37.02. The model assumes 6.2% annual free cash flow growth, a 10.0% discount rate, and a 9x exit multiple.
Intrinsic Value
$50.59
Margin of safety
+26.8%
Expected annual return
+6.4%
Base case assumptions: 6.2% annual growth, 10.0% discount rate, 9x exit multiple, 5 year projection. Data as of 2026-06-12.
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 APA valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for APA Corporation respond.
Open DCF Calculator for APACompany Overview
APA Corporation operates in the upstream segment of the oil and natural gas industry, utilizing its various subsidiaries to explore for, develop, and produce hydrocarbon assets. The company maintains significant operational presences in the United States, Egypt, and the United Kingdom, while also conducting exploration activities offshore Suriname. Furthermore, APA Corporation manages critical gathering, processing, and transmission infrastructure within West Texas and holds ownership interests in four major pipelines connecting the Permian Basin to the Gulf Coast. Established in 1954, the company is headquartered in Houston, Texas.
Financial Metrics — APA Stock Valuation Data
Revenue/Share (TTM)
$24.32
FCF/Share (TTM)
$4.19
ROIC (TTM)
12.0%
ROE (TTM)
25.1%
P/FCF
8.8x
EV/EBITDA
3.1x
FCF Yield
11.35%
Debt/Equity
0.70x
Based on trailing twelve-month data, APA shows a free cash flow per share of $4.19 and a ROIC of 12.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 8.8x and FCF yield of 11.35% are important context metrics when evaluating APA's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of APA?
APA Corporation currently generates $4.19 in free cash flow per share. At the current price of $37.02, 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 APA undervalued?
APA trades at a P/FCF ratio of 8.8x with a free cash flow yield of 11.35%. This relatively low P/FCF may suggest the stock is attractively priced relative to its cash generation. However, whether APA 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 APA stock using DCF?
To perform a DCF valuation on APA Corporation: (1) Start with the trailing free cash flow per share ($4.19) 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 APA's risk profile — with a debt-to-equity of 0.70x, 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 APA?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For APA Corporation, 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. APA's ROIC of 12.0% shows moderate capital returns.
How does WACC affect APA stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For APA, with a debt-to-equity ratio of 0.70x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 3.1x, 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 APA 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 APA with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.