As of May 22, 2025, Liberty Oilfield Services Inc's estimated intrinsic value ranges from $16.86 to $45.32 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $21.60 | +91.1% |
| Discounted Cash Flow (5Y) | $17.56 | +55.4% |
| Dividend Discount Model (Multi-Stage) | $21.45 | +89.9% |
| Dividend Discount Model (Stable) | $16.86 | +49.2% |
| Earnings Power Value | $45.32 | +301.0% |
Is Liberty Oilfield Services Inc (LBRT) undervalued or overvalued?
With the current market price at $11.30, 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 Liberty Oilfield Services Inc'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 | 1.11 | 1.26 |
| Cost of equity | 9.0% | 11.9% |
| Cost of debt | 4.8% | 11.4% |
| Tax rate | 11.8% | 18.3% |
| Debt/Equity ratio | 0.23 | 0.23 |
| After-tax WACC | 8.1% | 11.4% |
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 | $18 | $3,311M | 67.0% |
| 10-Year Growth | $22 | $3,965M | 50.1% |
| 5-Year EBITDA | $17 | $3,181M | 65.7% |
| 10-Year EBITDA | $20 | $3,782M | 47.7% |
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 | $739M |
| Discount Rate (WACC) | 11.4% - 8.1% |
| Enterprise Value | $6,464M - $9,148M |
| Net Debt | $467M |
| Equity Value | $5,998M - $8,681M |
| Outstanding Shares | 162M |
| Fair Value | $37 - $54 |
| Selected Fair Value | $45.32 |
| Metric | Value |
|---|---|
| Market Capitalization | $1830M |
| Enterprise Value | $2297M |
| Trailing P/E | 7.20 |
| Forward P/E | 5.94 |
| Trailing EV/EBITDA | 3.15 |
| Current Dividend Yield | 251.53% |
| Dividend Growth Rate (5Y) | 82.03% |
| Debt-to-Equity Ratio | 0.23 |
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% | $6.48 |
| Discounted Cash Flow (5Y) | 25% | $4.39 |
| Dividend Discount Model (Multi-Stage) | 20% | $4.29 |
| Dividend Discount Model (Stable) | 15% | $2.53 |
| Earnings Power Value | 10% | $4.53 |
| Weighted Average | 100% | $22.22 |
Based on our comprehensive valuation analysis, Liberty Oilfield Services Inc's weighted average intrinsic value is $22.22, which is approximately 96.6% above the current market price of $11.30.
Key investment considerations:
Given these factors, we believe Liberty Oilfield Services Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.