As of June 16, 2025, Blueknight Energy Partners LP's estimated intrinsic value ranges from $8.46 to $30.52 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $14.04 | +203.2% |
| Discounted Cash Flow (5Y) | $12.22 | +164.0% |
| Dividend Discount Model (Multi-Stage) | $9.86 | +113.0% |
| Dividend Discount Model (Stable) | $8.46 | +82.7% |
| Earnings Power Value | $30.52 | +559.1% |
Is Blueknight Energy Partners LP (BKEP) undervalued or overvalued?
With the current market price at $4.63, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Blueknight Energy Partners LP's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.74 | 1.17 |
| Cost of equity | 7.3% | 11.4% |
| Cost of debt | 4.1% | 4.6% |
| Tax rate | 0.1% | 0.2% |
| Debt/Equity ratio | 0.51 | 0.51 |
| After-tax WACC | 6.2% | 9.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $12 | $626M | 72.9% |
| 10-Year Growth | $14 | $702M | 53.5% |
| 5-Year EBITDA | $5 | $331M | 48.8% |
| 10-Year EBITDA | $8 | $459M | 28.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $103M |
| Discount Rate (WACC) | 9.1% - 6.2% |
| Enterprise Value | $1,127M - $1,658M |
| Net Debt | $114M |
| Equity Value | $1,013M - $1,544M |
| Outstanding Shares | 42M |
| Fair Value | $24 - $37 |
| Selected Fair Value | $30.52 |
| Metric | Value |
|---|---|
| Market Capitalization | $194M |
| Enterprise Value | $308M |
| Trailing P/E | 5.61 |
| Forward P/E | 5.31 |
| Trailing EV/EBITDA | 3.75 |
| Current Dividend Yield | 1655.06% |
| Dividend Growth Rate (5Y) | -10.10% |
| Debt-to-Equity Ratio | 0.51 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $4.21 |
| Discounted Cash Flow (5Y) | 25% | $3.06 |
| Dividend Discount Model (Multi-Stage) | 20% | $1.97 |
| Dividend Discount Model (Stable) | 15% | $1.27 |
| Earnings Power Value | 10% | $3.05 |
| Weighted Average | 100% | $13.56 |
Based on our comprehensive valuation analysis, Blueknight Energy Partners LP's weighted average intrinsic value is $13.56, which is approximately 192.9% above the current market price of $4.63.
Key investment considerations:
Given these factors, we believe Blueknight Energy Partners LP is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.