MODEL VERDICT
Evolution Petroleum Corporation (EPM) — Relative Valuation
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 51 analyst estimates | $0.05 | -98.8% | 20% | A- | Analyst Est. |
| EV/EBITDA 61 industry peers | $2.62 | -36.4% | 20% | A- | Peer Data |
| Industry Median P/E 49 industry peers | $0.39 | -90.5% | 15% | A | Peer Data |
| Price / Free Cash Flow 42 industry peers | $4.17 | +1.2% | 15% | B+ | Peer Data |
| EV/EBIT 53 industry peers | $0.14 | -96.6% | 8% | B+ | Peer Data |
| EV/FCF 43 industry peers | $4.54 | +10.2% | 7% | B | Model Driven |
| EV To Revenue 62 industry peers | $4.82 | +17.0% | 4% | B | Data |
| Price / Sales 63 industry peers | $4.43 | +7.5% | 3% | B | Model Driven |
| Earnings Yield 49 industry peers | $0.39 | -90.5% | 2% | B | Data |
| FCF Yield 43 industry peers | $4.33 | +5.1% | 1% | B | Data |
| Weighted Output Blended model output | $2.29 | -44.4% | 100% | 78 | SIGNIFICANTLY OVERVALUED |
| EPS Growth ↓ | P/E Multiple → | 104× | 114× | 124× (Current) | 134× | 144× |
|---|---|---|---|---|---|
| Bear Case (2%) | $4 | $4 | $4 | $5 | $5 |
| Conservative (5%) | $4 | $4 | $4 | $5 | $5 |
| Base Case (-28.7%) | $2 | $3 | $3 | $3 | $3 |
| Bull Case (-39%) | $2 | $2 | $3 | $3 | $3 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 31.90 | 13.86 | 5.59 | 106.63 | 39.11 |
| EV/EBIT | 16.44 | 13.60 | 3.98 | 31.62 | 12.16 |
| EV/EBITDA | 5.90 | 6.06 | 3.06 | 7.90 | 1.74 |
| P/FCF | 23.94 | 10.41 | 4.35 | 70.57 | 31.22 |
| P/FFO | 6.44 | 6.65 | 3.90 | 8.39 | 1.75 |
| P/TBV | 2.25 | 2.12 | 1.27 | 3.33 | 0.72 |
| P/AFFO | 43.07 | 10.18 | 3.90 | 148.02 | 70.05 |
| P/B Ratio | 2.25 | 2.12 | 1.27 | 3.33 | 0.72 |
| Div Yield | 0.08 | 0.08 | 0.03 | 0.14 | 0.04 |
| P/S Ratio | 2.80 | 2.31 | 1.37 | 5.06 | 1.40 |
Based on our peer multiples analysis with 25 valuation metrics, the model estimates EPM's fair value at $2.29 vs the current price of $4.12, implying -44.4% downside potential. Model verdict: Significantly Overvalued. Confidence: 78/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $2.29 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $2.25 (P10) to $4.55 (P90), with a median of $3.19.
EPM's current P/E of 124.1x compares to the industry median of 11.7x (49 peers in the group). This represents a +960.7% premium to the industry. The historical average P/E is 31.9x over 6 years. Signal: High Premium.
8 analysts cover EPM with a consensus rating of Buy. The consensus price target is $5.15 (range: $5.00 — $5.30), implying +25.0% upside from the current price. Grade breakdown: Strong Buy (0), Buy (4), Hold (4), Sell (0), Strong Sell (0).
The model confidence score is 78/100, based on: data completeness (27), peer quality (25), historical depth (20), earnings stability (4), and model agreement (2). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Multiple compression: EPM trades at the 9390th percentile of its historical P/E range. A reversion to median (31.9×) would imply significant downside. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that EPM's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -0.2σ, meaning margins are 0.2 standard deviations below their historical average. If margins revert to the 6-year mean (11.3%), the model estimates fair value drops by 97090.0% to approximately $44. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.