APA Corporation
APA
$41.02
+9.01%
APA Corporation is an independent energy company engaged in the exploration and production of crude oil, natural gas, and natural gas liquids, with operations spanning the U.S., Egypt, the North Sea, and Suriname, and exploration interests in Alaska and other international locations. As a mid-cap player in the oil & gas E&P sector, APA distinguishes itself through its geographically diversified asset base and a strategic focus on high-return projects, including recent investments in Alaska's North Slope. The current investor narrative centers on the company's ability to navigate volatile commodity prices, with recent headlines highlighting a strategic acquisition in Alaska to control critical infrastructure and lower costs, while the broader market reacts to geopolitical events such as the reopening of the Strait of Hormuz, which has pressured oil prices and, consequently, APA's near-term outlook.…
APA
APA Corporation
$41.02
Related headlines
Investment Opinion: Should I buy APA Today?
Rating: Hold. APA's deep value (6.13x trailing PE) and strong cash flow generation (FCF TTM $1.485B) are offset by declining revenue and a leveraged balance sheet. The analyst consensus is Hold with an average target of $41.625, implying 13.9% upside, which is modest. The thesis is that APA is a cyclical value play that could re-rate if oil prices stabilize, but the near-term outlook is clouded by commodity price weakness.
Sign up to view all
APA 12-Month Price Forecast
The AI assessment is neutral, reflecting a balanced risk-reward profile. The stock is deeply undervalued on trailing earnings, but the forward PE suggests expected earnings decline, indicating the market is not optimistic about near-term growth. The low beta and strong cash flow provide some downside protection, but the high leverage and commodity price sensitivity are significant risks. The stance would upgrade to bullish if oil prices stabilize above $65 and the company demonstrates cost discipline, or if the stock drops to a PE below 5x, offering a wider margin of safety. It would downgrade to bearish if revenue decline accelerates or if the company cuts its dividend.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on APA Corporation's 12-month outlook, with a consensus price target around $42.08 and implied upside of +2.6% versus the current price.
Average Target
$42.08
0 analysts
Implied Upside
+2.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$31 - $62
Analyst target range
APA is covered by 24 analysts, with a consensus recommendation of 'Hold' (mean rating of 2.68 on a scale where 1 is Strong Buy and 5 is Sell). The average price target is $41.625, implying an upside of approximately 13.9% from the current price of $36.53. The distribution of ratings is not provided, but the 'Hold' consensus suggests a balanced view, with some analysts seeing value and others cautious on the commodity cycle. The target price range spans from a low of $31.00 to a high of $62.00, reflecting a wide dispersion of expectations. The high target of $62 assumes a significant recovery in oil prices and successful execution of the Alaska development, while the low target of $31 implies continued margin pressure and potential downside if commodity prices weaken further. Recent institutional ratings show a mix of actions, including an upgrade from Roth Capital (Neutral to Buy) and reaffirmations of Outperform from Raymond James, but also Underweight ratings from Morgan Stanley and Mizuho, indicating divergent views on the stock's near-term prospects.
Drowning in data?
Find the real signal!
Bulls vs Bears: APA Investment Factors
APA presents a classic value-versus-cycle debate. The bull case is anchored in a deeply discounted valuation (6.13x trailing PE vs. 15x industry), strong operational profitability (16% net margin), and a strategic Alaska acquisition that could lower costs and drive growth. The bear case is driven by declining revenue (-11.72% YoY), expectations of lower earnings (forward PE higher), and high leverage (0.79 D/E) in a volatile commodity environment. Currently, the evidence slightly favors the bulls due to the extreme valuation discount and the company's proven ability to generate cash flow even in a downturn. The single most important tension is the trajectory of oil prices: if they stabilize or rise, APA's low-cost assets and Alaska upside could drive significant re-rating; if they fall further, the high debt load and revenue decline could erode the value proposition.
Bullish
- Deep Value with 59% PE Discount: APA trades at a trailing PE of 6.13x, a 59% discount to the industry average of 15x. This suggests the market is pricing in significant downside, offering a potential margin of safety if the company can stabilize earnings.
- Strong 1-Year Momentum: APA's stock has surged 102.27% over the past year, vastly outperforming the S&P 500's 21.46% gain. This demonstrates strong investor conviction and a successful operational turnaround, with the stock now trading at 80% of its 52-week range.
- High Profitability and Cash Flow: With a net margin of 16.08% and operating margin of 30.83% in Q1 2026, APA demonstrates robust profitability. Free cash flow TTM stands at $1.485 billion, providing ample liquidity for debt reduction, dividends, and growth investments.
- Strategic Alaska Acquisition: The acquisition of Savant Alaska is a strategic move to control critical infrastructure, aiming to accelerate development and lower costs on its North Slope assets. This could unlock significant value and reduce operational risks in a high-potential region.
Bearish
- Revenue Declining Year-Over-Year: Q1 2026 revenue fell 11.72% YoY to $2.327 billion, driven by lower commodity prices. This trend, if continued, could pressure earnings and cash flow, undermining the current valuation.
- Forward PE Suggests Earnings Decline: The forward PE of 8.94x is higher than the trailing PE of 6.13x, indicating that the market expects EPS to decline from $5.96 (trailing) to $3.57 (forward). This reflects expectations of softer commodity prices and potential margin compression.
- High Debt-to-Equity Ratio: APA's debt-to-equity ratio stands at 0.79, indicating a relatively high leverage level. This increases financial risk, especially if commodity prices remain weak, as the company must service debt with lower cash flows.
- Geopolitical Risk to Oil Prices: The reopening of the Strait of Hormuz has removed a geopolitical risk premium from oil prices, causing a 14% plunge in crude. This directly impacts APA's revenue and profitability, as seen in the recent revenue decline.
APA Technical Analysis
APA's stock has exhibited a robust recovery over the past year, with a 1-year price change of +102.27%, significantly outperforming the S&P 500's +21.46% over the same period. The current price of $36.53 sits at 80% of its 52-week range (low of $18.84, high of $45.66), indicating that the stock is trading near the upper end of its yearly band, which typically reflects strong momentum but also potential overextension. The 6-month price change of +33.03% underscores a sustained uptrend, though the stock has pulled back from its 52-week high, suggesting some profit-taking after a sharp rally.
Beta
0.35
0.35x market volatility
Max Drawdown
-28.2%
Largest decline past year
52-Week Range
$20-$46
Price range past year
Annual Return
+105.0%
Cumulative gain past year
| Period | APA Return | S&P 500 |
|---|---|---|
| 1m | +22.7% | +2.4% |
| 3m | +10.6% | +4.7% |
| 6m | +45.2% | +11.7% |
| 1y | +105.0% | +21.3% |
| ytd | +61.8% | +13.4% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
APA Fundamental Analysis
APA's revenue trajectory has been mixed, with the most recent quarter (Q1 2026) reporting revenue of $2.327 billion, a decline of 11.72% year-over-year, and down from $2.636 billion in Q1 2025. This marks a deceleration from the prior quarter's $1.991 billion, but the multi-quarter trend shows volatility, with Q2 2025 revenue at $2.178 billion and Q3 2025 at $2.115 billion. The revenue decline is primarily attributable to lower commodity prices, as the company's oil and gas sales (excluding purchased) were $1.942 billion in Q1 2026, down from $2.636 billion a year earlier. The investment case hinges on APA's ability to offset price weakness with volume growth and cost efficiencies, particularly from its Alaska acquisition.
Quarterly Revenue
$2.3B
2026-03
Revenue YoY Growth
-11.7%
YoY Comparison
Gross Margin
96.8%
Latest Quarter
Free Cash Flow
$1.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is APA Overvalued?
Given APA's positive net income of $446 million in Q1 2026, the price-to-earnings (PE) ratio is the most appropriate valuation metric. The trailing PE stands at 6.13x, while the forward PE is 8.94x, indicating that the market expects earnings to decline slightly over the next year, which is consistent with the consensus EPS estimate of $3.57 for the upcoming fiscal year. The gap between trailing and forward PE suggests a modest contraction in earnings power, likely due to softer commodity prices. Compared to the industry average PE of 15x (based on sector data), APA trades at a significant discount of approximately 59%, reflecting its lower growth prospects and higher operational risk. Historically, APA's PE has ranged from as low as 1.55x in Q4 2023 to as high as 20.13x in Q1 2024, with the current 6.13x near the lower end of its historical band, indicating that the stock is undervalued relative to its own history, potentially offering a value opportunity if the company can stabilize earnings.
PE
6.1x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 2x~12x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
2.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: APA's financial health is sensitive to commodity price volatility. The 11.72% YoY revenue decline in Q1 2026 highlights this exposure. With a debt-to-equity ratio of 0.79, the company carries significant leverage, and if oil prices remain depressed, interest coverage could deteriorate. The current ratio of 0.82 indicates potential liquidity constraints, though free cash flow of $1.485 billion provides a buffer. Additionally, the forward PE of 8.94x implies the market expects earnings to decline, which could lead to reduced dividends or share buybacks if cash flow tightens. The company's reliance on the U.S. segment for the majority of revenue also concentrates risk in a single geography, though diversification across Egypt, North Sea, and Suriname mitigates this somewhat.
FAQ
The key risks are: 1) Commodity price risk: A decline in oil prices directly impacts revenue and earnings, as seen in the -11.72% YoY revenue drop. 2) Financial risk: High debt-to-equity of 0.79 and a current ratio of 0.82 could strain liquidity if cash flows weaken. 3) Execution risk: The Alaska acquisition may not deliver expected cost savings or production growth. 4) Geopolitical risk: Operations in Egypt and Suriname are subject to political instability. The most severe risk is a prolonged oil price downturn, which could lead to dividend cuts and a significant stock decline.
The 12-month forecast is mixed. The base case (50% probability) sees the stock trading in the $38-$45 range, aligning with the analyst average target of $41.625. The bull case (25% probability) targets $45-$55, driven by oil price recovery and successful Alaska development. The bear case (25% probability) targets $25-$31, if oil prices collapse. The most likely scenario is the base case, assuming oil prices remain stable. Investors should watch oil price trends and the company's quarterly earnings for confirmation.
APA is undervalued relative to its own history and peers. The trailing PE of 6.13x is well below the industry average of 15x and near the lower end of its historical range (1.55x to 20.13x). The forward PE of 8.94x suggests the market expects earnings to decline, but even so, it remains cheap. The PS ratio of 0.98 and EV/EBITDA of 2.41 also indicate a discount. This valuation implies the market is pricing in significant downside, which may be overly pessimistic given the company's profitability and cash flow. However, the discount could be justified if commodity prices remain weak.
APA offers a compelling value proposition with a trailing PE of 6.13x, a 59% discount to the industry average, and a 13.9% upside to the average analyst target of $41.625. However, the stock faces headwinds from declining revenue (-11.72% YoY) and high leverage (D/E 0.79). It could be a good buy for investors with a high risk tolerance and a long-term horizon, particularly if they believe oil prices will stabilize or recover. For conservative investors, the Hold consensus and commodity price risk may warrant caution. The key is to monitor oil prices and the Alaska acquisition's execution.
APA is more suitable for long-term investment due to its cyclical nature and low beta (0.348). Short-term trading is possible given the stock's volatility, but the fundamental value proposition is best realized over a 3-5 year horizon, allowing time for the Alaska acquisition to mature and commodity cycles to turn. The stock's low beta provides some stability, but its high sensitivity to oil prices means it can be volatile. Investors should have a long-term perspective and be prepared for price swings. A minimum holding period of 3 years is recommended to ride out the commodity cycle.
