APA Corporation (APA) Stock Valuation — PE Analysis
Oil & Gas Exploration & Production · NASDAQ
Current Price
$37.02
PE Ratio (TTM)
8.5x
Intrinsic Value
$52.67
+29.7% 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 PE valuation
A base case PE valuation for APA estimates a fair value of about $52.67 per share, against a current price of $37.02. The model assumes 6.4% annual earnings growth, a 9x target PE multiple, and a 10% discount rate.
Intrinsic Value
$52.67
Margin of safety
+29.7%
Expected annual return
+7.3%
Base case assumptions: 6.4% annual earnings growth, 9x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the APA PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for APA Corporation respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
8.5x
PEG Ratio
0.16
Earnings Yield
11.70%
ROE (TTM)
25.1%
Revenue/Share (TTM)
$24.32
Dividend Yield
2.70%
Debt/Equity
0.70x
Frequently Asked Questions
What is the PE ratio of APA?
The trailing twelve-month PE ratio of APA reflects how much investors pay per dollar of APA Corporation's earnings. This metric is most useful when compared to Oil & Gas Exploration & Production peers and the company's own historical range.
Is APA overvalued based on PE ratio?
APA's PE of 8.5x combined with a PEG ratio of 0.16 provides a growth-adjusted perspective. A PEG below 1.0 suggests APA may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Oil & Gas Exploration & Production, a DCF analysis may be more appropriate.
How do I value APA stock using PE ratio?
To value APA Corporation using PE: (1) Compare the current PE (8.5x) against the Oil & Gas Exploration & Production median to assess relative pricing, (2) check the PEG ratio (0.16) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of APA?
APA's PEG ratio is 0.16, calculated by dividing the PE ratio (8.5x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for APA stock valuation?
PE ratio gives a quick relative read — how APA is priced versus Oil & Gas Exploration & Production peers. DCF provides an absolute value based on projected free cash flows. For APA, with a strong ROE of 25.1%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See APA DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Energy valuationsP/E and DCF value APA with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic 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.