One-glance verdict
Undervalued
$144.00 our estimate vs market $45.88
Wall Street consensus: $46.44 (-67.8% lower than our fair-value estimate)
68% below our estimate, below the bear case
Fundamentals snapshot
APA Corporation
APA · NMS · Energy · Oil & Gas E&P
Current price
$45.88
52-week range
$21.63 - $47.44
Market cap
$16.07B
Balance sheet
Watch
9.89x Adequate
Net debt $3.44B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Returns 26.7% on equity, ahead of 80% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Stock trades 58.9% above its 5-year average P/E.
- Risk Forward P/E (9.9x) is higher than trailing (9.7x) - earnings are expected to drop.
What this company does
APA Corporation
APA Corporation is like a treasure hunter for oil and natural gas, finding it in places like the US, Egypt, and the North Sea. The money they make mainly comes from selling these energy resources, which matters because it fuels our cars and heats our homes. They also spend money to find new energy sources and to get the oil and gas out of the ground, which impacts how much profit (their margins, or the percent of each sales dollar left after costs) they keep.
How the company got here
APA Corporation, originally founded as Apache Corporation in 1954, has evolved significantly over its history. It began as a small investment and grew by acquiring assets, particularly from larger companies that were divesting. A key turning point was its expansion into international markets, notably Egypt, and a strategic shift to a holding company structure in 2021, with APA Corporation becoming the public-facing entity. More recently, the acquisition of Callon Petroleum in 2024 has further expanded its U.S. operations, especially in the Permian Basin.
What it actually does
APA Corporation is an independent energy company focused on finding, developing, and producing oil and natural gas. Unlike integrated energy companies, APA doesn't refine oil or sell gasoline to consumers. Instead, it extracts raw materials like crude oil, natural gas, and natural gas liquids (NGLs) from the earth and sells them to other businesses in the wholesale market. These raw materials are the building blocks for countless products, from gasoline and plastics to heating and electricity.
United States Operations
APA's operations in the United States are primarily focused on onshore unconventional resources, particularly in the Permian Basin and Eagle Ford shale plays. This segment represents a significant portion of the company's production and cash flow. The company actively explores for and develops these reserves, aiming to efficiently extract oil and natural gas. These U.S. assets provide flexibility, allowing APA to adjust production levels relatively quickly in response to market conditions.
Egypt Operations
In Egypt, APA Corporation holds a substantial position, operating in the Western Desert. It is one of the largest oil producers in the country and has been a significant investor there for over three decades. The operations in Egypt are governed by production-sharing contracts, which influence how revenue and costs are reported. This region provides a diversified source of international cash flow for the company.
North Sea Operations
APA's activities in the North Sea, primarily offshore the UK, involve managing mature oil and gas fields. The focus here is on maintaining reliable production through careful maintenance, selective investments in connecting new wells (tie-backs), and generating cash flow. While not the primary growth engine, these operations are important for balancing the company's overall portfolio and contributing to its financial stability.
Suriname Exploration
Offshore Suriname, APA is involved in exploration and appraisal activities, notably in Block 58, in partnership with other major energy companies. This region represents a significant long-term development opportunity for APA. While not yet a major producer, the discoveries made here hold the potential for substantial future production and growth, making it a key strategic area for the company's future.
What management is betting on now
APA's current strategy centers on capital discipline and maximizing returns across its diverse portfolio. A key priority is the successful integration of the recently acquired Callon Petroleum assets, aiming to capture synergies and manage debt. Management is focused on generating competitive financial results regardless of fluctuating commodity prices, balancing short-term flexibility from U.S. operations with the stable cash flow from Egypt and the North Sea, and nurturing the long-term potential of its Suriname exploration.
How the company got here
APA Corporation, originally founded as Apache Corporation in 1954, has evolved significantly over its history. It began as a small investment and grew by acquiring assets, particularly from larger companies that were divesting. A key turning point was its expansion into international markets, notably Egypt, and a strategic shift to a holding company structure in 2021, with APA Corporation becoming the public-facing entity. More recently, the acquisition of Callon Petroleum in 2024 has further expanded its U.S. operations, especially in the Permian Basin.
What it actually does
APA Corporation is an independent energy company focused on finding, developing, and producing oil and natural gas. Unlike integrated energy companies, APA doesn't refine oil or sell gasoline to consumers. Instead, it extracts raw materials like crude oil, natural gas, and natural gas liquids (NGLs) from the earth and sells them to other businesses in the wholesale market. These raw materials are the building blocks for countless products, from gasoline and plastics to heating and electricity.
United States Operations
APA's operations in the United States are primarily focused on onshore unconventional resources, particularly in the Permian Basin and Eagle Ford shale plays. This segment represents a significant portion of the company's production and cash flow. The company actively explores for and develops these reserves, aiming to efficiently extract oil and natural gas. These U.S. assets provide flexibility, allowing APA to adjust production levels relatively quickly in response to market conditions.
Egypt Operations
In Egypt, APA Corporation holds a substantial position, operating in the Western Desert. It is one of the largest oil producers in the country and has been a significant investor there for over three decades. The operations in Egypt are governed by production-sharing contracts, which influence how revenue and costs are reported. This region provides a diversified source of international cash flow for the company.
North Sea Operations
APA's activities in the North Sea, primarily offshore the UK, involve managing mature oil and gas fields. The focus here is on maintaining reliable production through careful maintenance, selective investments in connecting new wells (tie-backs), and generating cash flow. While not the primary growth engine, these operations are important for balancing the company's overall portfolio and contributing to its financial stability.
Suriname Exploration
Offshore Suriname, APA is involved in exploration and appraisal activities, notably in Block 58, in partnership with other major energy companies. This region represents a significant long-term development opportunity for APA. While not yet a major producer, the discoveries made here hold the potential for substantial future production and growth, making it a key strategic area for the company's future.
What management is betting on now
APA's current strategy centers on capital discipline and maximizing returns across its diverse portfolio. A key priority is the successful integration of the recently acquired Callon Petroleum assets, aiming to capture synergies and manage debt. Management is focused on generating competitive financial results regardless of fluctuating commodity prices, balancing short-term flexibility from U.S. operations with the stable cash flow from Egypt and the North Sea, and nurturing the long-term potential of its Suriname exploration.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
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Net income
$747.00M
Diluted EPS
2.11
Operating cash flow
$1.71B
Free cash flow
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Sources
Revenue
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Net income
$446.00M
Diluted EPS
1.26
Operating cash flow
$554.00M
Free cash flow
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Sources
Revenue
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Net income
$279.00M
Diluted EPS
0.79
Operating cash flow
$808.00M
Free cash flow
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Sources
Revenue
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Net income
$205.00M
Diluted EPS
0.57
Operating cash flow
$1.46B
Free cash flow
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Sources
Revenue
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Net income
$603.00M
Diluted EPS
1.67
Operating cash flow
$1.18B
Free cash flow
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Sources
Revenue
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Net income
$347.00M
Diluted EPS
0.96
Operating cash flow
$1.10B
Free cash flow
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Revenue
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Net income
$804.00M
Diluted EPS
0.97
Operating cash flow
$1.04B
Free cash flow
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Revenue
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Net income
$-223.00M
Diluted EPS
-0.60
Operating cash flow
$1.34B
Free cash flow
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Is it cheap or expensive?
Fair value $144.00 vs current price $45.88
Wall Street consensus is the average analyst price target: $46.44 (-67.8% lower than our fair-value estimate).
Our most-likely fair value is $144.00 a share — about 213.9% above today's price of $45.88, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $3.4B. Interest coverage 9.9x.
Net debt
$3.44B
Interest coverage
9.89x
APA Corporation's profit covers its interest bill about 9.9 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
APA
BASELINE
APA Corporation
Total debt $3.88B Interest coverage 9.89x This is the baseline the peer rows are being compared against.
Total debt $11.89B Interest coverage 7.76x -22% vs APA Carries about 1.3x less debt cushion than APA.
Total debt $8.25B Interest coverage 30.85x +212% vs APA Carries about 3.1x more debt cushion than APA.
Total debt $12.61B Interest coverage 18.56x +88% vs APA Carries about 1.9x more debt cushion than APA.
Total debt $23.29B Interest coverage 9.20x -7% vs APA Has roughly the same debt cushion as APA.
What you should know
The case for and against APA
3 Rewards
3 Risks
Rewards
-
Returns 26.7% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Trades at 9.7x P/E vs peer median 14.6x (33.8% cheaper).
Risks
-
Stock trades 58.9% above its 5-year average P/E.
-
Forward P/E (9.9x) is higher than trailing (9.7x) - earnings are expected to drop.
-
Insider ownership is only 0.4% (peer median: 0.5%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
9.70x
Forward P/E
9.87x
P/B
2.29x
P/S
1.88x
EV/EBITDA
3.57x
PEG ratio
1.24x
Profitability
How much profit each dollar creates
Gross margin
78.3%
Operating margin
56.3%
Net margin
19.6%
ROE
26.7%
ROA
11.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.49x
Current ratio
0.95x
Quick ratio
0.69x
Total debt
$3.88B
Total cash
$444.00M
Growth
How the business has been compounding
Revenue TTM
$8.57B
Revenue 5Y CAGR
-7.0%
EPS TTM
4.73
EPS 5Y CAGR
-28.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$4.53B
Free CF TTM
$1.78B
FCF margin
20.8%
Dividend
Shareholder payout
Yield
2.2%
Payout ratio
21.1%
Last ex-div date
2026-10-22