As of June 16, 2025, Paramount Resources Ltd has a Discounted Cash Flow (DCF) derived fair value of $26.05 per share. With the current market price at $21.99, this represents a potential upside of 18.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $28.36 |
| DCF Fair Value (10-year) | $26.05 |
| Potential Upside (5-year) | 29.0% |
| Potential Upside (10-year) | 18.5% |
| Discount Rate (WACC) | 6.6% - 8.7% |
Revenue is projected to grow from $1855 million in 12-2024 to $1460 million by 12-2034, representing a compound annual growth rate of approximately -2.4%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 1855 | 3% |
| 12-2025 | 736 | -60% |
| 12-2026 | 986 | 34% |
| 12-2027 | 1180 | 20% |
| 12-2028 | 1210 | 3% |
| 12-2029 | 1234 | 2% |
| 12-2030 | 1271 | 3% |
| 12-2031 | 1320 | 4% |
| 12-2032 | 1404 | 6% |
| 12-2033 | 1432 | 2% |
| 12-2034 | 1460 | 2% |
Net profit margin is expected to improve from 18% in 12-2024 to 17% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 336 | 18% |
| 12-2025 | 123 | 17% |
| 12-2026 | 165 | 17% |
| 12-2027 | 198 | 17% |
| 12-2028 | 203 | 17% |
| 12-2029 | 207 | 17% |
| 12-2030 | 213 | 17% |
| 12-2031 | 221 | 17% |
| 12-2032 | 235 | 17% |
| 12-2033 | 240 | 17% |
| 12-2034 | 245 | 17% |
with a 5-year average of $594 million. Projected CapEx is expected to maintain at approximately 38% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 606 |
| 12-2026 | 625 |
| 12-2027 | 555 |
| 12-2028 | 485 |
| 12-2029 | 408 |
| 12-2030 | 449 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 31 |
| Days Inventory | 0 |
| Days Payables | 0 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 561 | 25 | 211 | (75) | 400 |
| 2026 | 816 | 46 | 376 | 19 | 375 |
| 2027 | 783 | 55 | 450 | 19 | 259 |
| 2028 | 719 | 56 | 462 | 1 | 200 |
| 2029 | 646 | 57 | 471 | 2 | 117 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 28.36 | 29.0% |
| 10-Year DCF (Growth) | 26.05 | 18.5% |
| 5-Year DCF (EBITDA) | 23.50 | 6.9% |
| 10-Year DCF (EBITDA) | 24.53 | 11.6% |
Is Paramount Resources Ltd (POU.TO) a buy or a sell? Paramount Resources Ltd is definitely a buy. Based on our DCF analysis, Paramount Resources Ltd (POU.TO) appears to be moderately undervalued with upside potential of 18.5%.
Investors should consider a buy at the current market price of $21.99.