MODEL VERDICT
Epsilon Energy Ltd. (EPSN) — 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 | $4.31 | -11.1% | 20% | A- | Analyst Est. |
| EV/EBITDA 61 industry peers | $5.37 | +10.7% | 20% | A- | Peer Data |
| Industry Median P/E 49 industry peers | $1.03 | -78.8% | 15% | A | Peer Data |
| EV/EBIT 53 industry peers | $1.76 | -63.7% | 8% | B+ | Peer Data |
| EV To Revenue 62 industry peers | $5.06 | +4.3% | 4% | B | Data |
| Price / Sales 63 industry peers | $3.61 | -25.6% | 3% | B | Model Driven |
| Earnings Yield 49 industry peers | $1.03 | -78.8% | 2% | B | Data |
| Weighted Output Blended model output | $3.77 | -22.2% | 100% | 59 | OVERVALUED |
| EPS Growth ↓ | P/E Multiple → | 47× | 51× | 55× (Current) | 59× | 63× |
|---|---|---|---|---|---|
| Bear Case (2%) | $4 | $5 | $5 | $5 | $6 |
| Conservative (5%) | $4 | $5 | $5 | $5 | $6 |
| Base Case (-22.8%) | $3 | $3 | $4 | $4 | $4 |
| Bull Case (-31%) | $3 | $3 | $3 | $4 | $4 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 34.02 | 16.39 | 4.39 | 106.61 | 38.98 |
| EV/EBIT | 18.02 | 9.93 | 2.31 | 51.07 | 18.35 |
| EV/EBITDA | 6.26 | 6.29 | 2.06 | 9.56 | 2.80 |
| P/FCF | 24.85 | 11.24 | 5.18 | 83.68 | 33.09 |
| P/FFO | 7.62 | 7.82 | 3.71 | 11.24 | 2.43 |
| P/TBV | 1.43 | 1.41 | 1.14 | 1.72 | 0.23 |
| P/AFFO | 14.07 | 10.31 | 4.60 | 23.85 | 8.21 |
| P/B Ratio | 1.43 | 1.41 | 1.14 | 1.72 | 0.23 |
| Div Yield | 0.04 | 0.04 | 0.04 | 0.05 | 0.01 |
| P/S Ratio | 3.52 | 3.72 | 2.22 | 4.32 | 0.69 |
Based on our peer multiples analysis with 19 valuation metrics, the model estimates EPSN's fair value at $3.77 vs the current price of $4.85, implying -22.2% downside potential. Model verdict: Overvalued. Confidence: 59/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $3.77 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 $3.18 (P10) to $5.02 (P90), with a median of $4.08.
EPSN's current P/E of 55.2x compares to the industry median of 11.7x (49 peers in the group). This represents a +371.6% premium to the industry. The historical average P/E is 34.0x over 7 years. Signal: High Premium.
No analyst coverage data is available for EPSN.
The model confidence score is 59/100, based on: data completeness (18), peer quality (25), historical depth (20), earnings stability (4), and model agreement (2). Cyclicality penalty: --10 points. The model shows moderate agreement across inputs.
The model flags several key risks: (1) Multiple compression: EPSN trades at the 8980th percentile of its historical P/E range. A reversion to median (34.0×) 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 EPSN's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -0.5σ, meaning margins are 0.5 standard deviations below their historical average. If margins revert to the 7-year mean (32.8%), the model estimates fair value drops by 5730.0% to approximately $8. 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.