AP

APA Corp

APA
—
Accountable AI Logo

APA Corp AI Insights

Informational only. Not investment advice.
As of 2025-12-08

Snapshot

  • ROE of 27.2% TTM is 3.5x industry median (7.7%), driven by 30.5% operating margin vs sector median 18% - superior capital efficiency.[Return on Equity]
  • P/E of 6.7x vs industry median 12x and P/CF of 2.0x vs 3.7x median - trading at ~45% discount on both earnings and cash flow.[P/E Ratio]
  • EPS 3Y CAGR of -15.1% despite strong current margins signals cyclical peak or asset base decline - earnings trajectory negative.[EPS Growth 3yr]

Watch Triggers

  • Capital Expenditure TTM: Rises above 3.5B or >35% of revenue — Signals accelerating decline rates requiring more maintenance capex, compressing FCF
  • Debt to Equity: Exceeds 1.0x — With negative working capital, rising leverage limits strategic flexibility in downturn
  • Operating Margin TTM: Falls below 25% — Margin compression would eliminate valuation discount thesis

Bull Case

Deep value at 6.7x P/E with 20% FCF yield (1.9B FCF on 9.4B market cap) and 3.8% dividend yield provides downside cushion.

P/E RatioFree Cash Flow TTMDividends Paid Per Share TTM

ROIC of 13.6% TTM is 2.7x industry median (5.1%), indicating management generates returns well above cost of capital.

Return on Invested CapitalOperating Margin TTM

Bear Case

EPS declining -15% 3Y CAGR while capex consumes 60% of operating cash flow (2.9B of 4.8B) - reinvestment just to maintain production.

EPS Growth 3yrCapital Expenditure TTMCash Flow TTM

Commodity exposure with no pricing power - 9.6B revenue entirely dependent on oil/gas prices beyond management control.

Total Revenue TTMNet Margin TTM

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
40%

Leverage APA's top insights and create a custom strategy based on them in seconds. Our AI editor does it all — in one click.

Take Me to The Editor

Forward Thesis

FCF generation will compress as capex intensity rises to offset production declines

1-3ymed
  • Capex of 2.9B TTM already 30% of revenue
  • Negative working capital (-572M) limits flexibility
  • Debt/equity 0.77x constrains leverage capacity
FCF 1.9B TTM down from implied higher baseNet debt 4.0B vs 6.0B equityInterest expense 310M TTM (6.4% of EBITDA)
Valuation Context
Caveats

Public Strategies Rankings

See how APA Corp ranks across different investment strategies.

Leverage APA's top insights and create a custom strategy in seconds. Our AI editor does it all — in one click.

Data Partners
Morningstar Logo

Fundamental company data provided by Morningstar, updated daily.

Accountable Finance, Inc. Disclaimer
accountable.finance is not operated by a broker or a dealer. Under no circumstances does any information posted on accountable.finance represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute investment advice or recommendations. In no event shall accountable.finance be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on accountable.finance, or relating to the use of, or inability to use, accountable.finance or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. Stock quotes and fundamental company data provided by Morningstar, updated daily.
Accountable Logo
© 2026 Accountable Finance, Inc. All rights reserved.