As of May 29, 2025, Knot Offshore Partners LP's estimated intrinsic value ranges from $4.73 to $92.17 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $12.02 | +90.2% |
| Discounted Cash Flow (5Y) | $13.63 | +115.6% |
| Dividend Discount Model (Multi-Stage) | $4.73 | -25.1% |
| Dividend Discount Model (Stable) | $5.81 | -8.1% |
| Earnings Power Value | $92.17 | +1358.4% |
Is Knot Offshore Partners LP (KNOP) undervalued or overvalued?
With the current market price at $6.32, 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 Knot Offshore 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 | 1.03 | 1.6 |
| Cost of equity | 8.6% | 13.8% |
| Cost of debt | 4.0% | 12.4% |
| Tax rate | 1.3% | 2.6% |
| Debt/Equity ratio | 4.22 | 4.22 |
| After-tax WACC | 4.8% | 12.4% |
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 | $14 | $1,408M | 79.0% |
| 10-Year Growth | $12 | $1,353M | 61.1% |
| 5-Year EBITDA | $(1,234) | $584M | 49.4% |
| 10-Year EBITDA | $(1,234) | $741M | 28.9% |
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 | $284M |
| Discount Rate (WACC) | 12.4% - 4.8% |
| Enterprise Value | $2,293M - $5,872M |
| Net Debt | $944M |
| Equity Value | $1,349M - $4,928M |
| Outstanding Shares | 34M |
| Fair Value | $40 - $145 |
| Selected Fair Value | $92.17 |
| Metric | Value |
|---|---|
| Market Capitalization | $215M |
| Enterprise Value | $1159M |
| Trailing P/E | 15.75 |
| Forward P/E | 14.64 |
| Trailing EV/EBITDA | 5.25 |
| Current Dividend Yield | 466.63% |
| Dividend Growth Rate (5Y) | -40.41% |
| Debt-to-Equity Ratio | 4.22 |
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% | $3.61 |
| Discounted Cash Flow (5Y) | 25% | $3.41 |
| Dividend Discount Model (Multi-Stage) | 20% | $0.95 |
| Dividend Discount Model (Stable) | 15% | $0.87 |
| Earnings Power Value | 10% | $9.22 |
| Weighted Average | 100% | $18.05 |
Based on our comprehensive valuation analysis, Knot Offshore Partners LP's weighted average intrinsic value is $18.05, which is approximately 185.6% above the current market price of $6.32.
Key investment considerations:
Given these factors, we believe Knot Offshore Partners LP is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.