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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 38.49%
Profit Margins 18.31%
Return on Equity 26.22%
Return on Assets 9.61%
Free Float 0.35B
Dividend Yield 3.03%
Short Int % Utilisation 10.31%

2.2 Growth

Metric Value
Revenue Growth -11.9%
Free Cash Flow 1.69B
EBITDA 3.57 (Ratio)
Enterprise Value 18.62B
EV/Revenue 2.22
EV/EBITDA 3.57

Revenue growth of -11.9% suggests mature or challenged top-line momentum.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 128.95%
Risk / Std Dev (Ann.)* 46.53%
1-Year Price Return* 104.50%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $40.47
52-Week Range $19.96 – $45.66
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $8.92B $9.74B
Net income Reported net income $1.43B $804.00M
Total assets Year-end reported balance $17.76B $19.39B
Shareholders’ equity Year-end reported balance $6.09B $5.28B
Net margin Net income ÷ revenue 16.08% 8.26%
Asset turnover Revenue ÷ total assets 0.5022x 0.5022x
Equity multiplier Total assets ÷ shareholders’ equity 2.9150x 3.6723x
ROE Net margin × asset turnover × equity multiplier 23.54% 15.23%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $8.92B
Prior annual revenue $9.74B
EBIT $3.07B
Tax rate 39.40%
NOPAT = EBIT × (1 − tax rate) $1.86B
Forecast start-growth basis -8.39%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $1.86B
Add: depreciation & amortisation $2.30B
Less: capital expenditure -$2.77B
Less/(add): working-capital cash-flow movement $292.00M
Current unlevered FCFF $1.69B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 -8.39% $1.70B $2.11B -$2.53B $267.50M $1.55B $1.51B
2 -5.67% $1.61B $1.99B -$2.29B $252.34M $1.56B $1.43B
3 -2.95% $1.56B $1.93B -$2.13B $244.91M $1.61B $1.40B
4 -0.22% $1.56B $1.93B -$2.02B $244.36M $1.70B $1.40B
5 2.50% $1.60B $1.98B -$1.98B $250.47M $1.85B $1.43B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.35
Cost of equity 6.63%
Pre-tax cost of debt 5.17%
WACC 5.79%
WACC validation requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $57.45B
Implied terminal EV / EBITDA 12.46x
Terminal value as % of enterprise value 85.81%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $7.17B
Present value of terminal value $43.35B
Indicated enterprise value $50.52B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $50.52B
Less: gross interest-bearing debt $4.59B
Add: cash and equivalents $516.00M
Add: affiliate investments $0.00
Less: minority interests $910.00M
Indicated common equity value $45.53B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 359,000,000.00
Share-count basis reported diluted weighted-average shares
Current market price $41.85
DCF indicative value per share $126.84
Indicative value vs. market price 203.11%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range review required
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:22:47.889470 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha 51.51% 44.24%
Adjusted R² 0.10 0.09
Annualised residual volatility 43.92% 43.84%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) -0.10 (-0.40) -0.20 (-0.66)
Size (SMB) 0.01 (0.03) -0.08 (-0.21)
Value (HML) 1.29 (4.28) 1.28 (3.45)
Profitability (RMW) NM -0.27 (-0.86)
Investment (CMA) NM 0.16 (0.30)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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