As of June 17, 2025, Northern Oil and Gas Inc's estimated intrinsic value ranges from $43.02 to $65.27 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $65.27 | +107.1% |
| Discounted Cash Flow (5Y) | $57.56 | +82.6% |
| Dividend Discount Model (Multi-Stage) | $44.79 | +42.1% |
| Dividend Discount Model (Stable) | $50.46 | +60.1% |
| Earnings Power Value | $43.02 | +36.5% |
Is Northern Oil and Gas Inc (NOG) undervalued or overvalued?
With the current market price at $31.52, 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 Northern Oil and Gas 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 | 1.17 | 1.95 |
| Cost of equity | 9.2% | 15.8% |
| Cost of debt | 4.9% | 7.8% |
| Tax rate | 2.0% | 4.9% |
| Debt/Equity ratio | 0.75 | 0.75 |
| After-tax WACC | 7.3% | 12.2% |
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 | $58 | $7,958M | 67.4% |
| 10-Year Growth | $65 | $8,719M | 44.6% |
| 5-Year EBITDA | $49 | $7,095M | 63.4% |
| 10-Year EBITDA | $59 | $8,093M | 40.4% |
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 | $598M |
| Discount Rate (WACC) | 12.2% - 7.3% |
| Enterprise Value | $4,909M - $8,138M |
| Net Debt | $2,277M |
| Equity Value | $2,632M - $5,861M |
| Outstanding Shares | 99M |
| Fair Value | $27 - $59 |
| Selected Fair Value | $43.02 |
| Metric | Value |
|---|---|
| Market Capitalization | $3111M |
| Enterprise Value | $5388M |
| Trailing P/E | 4.80 |
| Forward P/E | 4.61 |
| Trailing EV/EBITDA | 2.45 |
| Current Dividend Yield | 515.42% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.75 |
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% | $19.58 |
| Discounted Cash Flow (5Y) | 25% | $14.39 |
| Dividend Discount Model (Multi-Stage) | 20% | $8.96 |
| Dividend Discount Model (Stable) | 15% | $7.57 |
| Earnings Power Value | 10% | $4.30 |
| Weighted Average | 100% | $54.80 |
Based on our comprehensive valuation analysis, Northern Oil and Gas Inc's weighted average intrinsic value is $54.80, which is approximately 73.9% above the current market price of $31.52.
Key investment considerations:
Given these factors, we believe Northern Oil and Gas Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.