- If you are wondering whether Northern Oil and Gas at around US$28.84 is offering fair value or a potential mismatch between price and underlying worth, you are not alone.
- The stock has recent returns of 4.8% over 7 days, 5.4% over 30 days, 31.0% year to date and 2.4% over 1 year, which naturally raises questions about how much is already reflected in the price.
- Recent coverage has focused on Northern Oil and Gas in the context of its role within the broader energy sector and its position as a US listed oil and gas name. This helps frame how investors may be thinking about risk and return, and this kind of attention often feeds into shifts in sentiment that can influence short term share price behavior.
- Simply Wall St currently gives Northern Oil and Gas a valuation score of 2 out of 6. The next sections will walk through the standard valuation methods behind that figure, while also pointing to an even more rounded way to think about value later in the article.
Northern Oil and Gas scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Northern Oil and Gas Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow (DCF) model estimates what a business could be worth by projecting its future cash flows and then discounting those back to today using a required rate of return. It focuses on cash generated for shareholders rather than accounting earnings.
For Northern Oil and Gas, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is a loss of $139.8 million, so the story here is less about current cash generation and more about what analysts expect the company to produce over time.
Analysts and extrapolations point to projected free cash flow of $166.0 million in 2026, rising to $285.5 million by 2030, with further estimates extending out to 2035. All of these cash flows are in US$, and Simply Wall St discounts each annual figure back to today using its own assumptions to arrive at a total equity value.
This process results in an estimated intrinsic value of $63.65 per share, compared with the current price around $28.84, which implies the stock is 54.7% undervalued on this model.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Northern Oil and Gas is undervalued by 54.7%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks.
Approach 2: Northern Oil and Gas Price vs Earnings
For profitable companies, the P/E ratio is a useful way to think about valuation because it links what you pay for each share directly to the earnings that the business is currently generating. Investors usually accept a higher or lower P/E depending on what they expect for future earnings growth and how risky they perceive those earnings to be.
Northern Oil and Gas currently trades on a P/E of 77.41x. That is well above the Oil and Gas industry average of 15.81x and also higher than the peer group average of 21.86x. On those simple comparisons, the shares look expensive relative to many other names in the sector.
Simply Wall St also provides a Fair Ratio of 20.71x, which is the P/E level it would expect for Northern Oil and Gas after considering factors such as earnings growth, profit margins, industry, market cap and risk profile. This Fair Ratio can give a more tailored view than broad industry or peer averages, which treat very different businesses as if they were the same. Comparing 77.41x with a Fair Ratio of 20.71x suggests the shares trade above the level implied by those fundamentals.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your Northern Oil and Gas Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St take that next step by letting you attach a clear story about Northern Oil and Gas to your own assumptions for future revenue, earnings and margins. You can link that story to a forecast and a Fair Value, and then see in one place how that Fair Value compares with today’s price around US$28.84. This allows you to judge if the stock looks expensive or cheap to you. Each Narrative on the Community page updates as fresh news or earnings arrive and can reflect very different views. For example, a more optimistic investor might think a higher Fair Value near the bullish US$50 analyst target is reasonable because acquisitions, production and margins justify a higher future P/E. In contrast, a more cautious investor might align closer to the bearish US$25 target and build in weaker margins, lower cash flow and a lower justified multiple. This gives you a simple, side by side way to decide which story best matches your own expectations.
For Northern Oil and Gas however we'll make it really easy for you with previews of two leading Northern Oil and Gas narratives:
🐂 Northern Oil and Gas Bull Case
Fair value: US$29.90
Price vs fair value: about 3.6% below this narrative fair value
Revenue growth assumption: 5.32%
- Focus on acquiring long dated production assets and a non operating model that targets resilient cash flow across several key US basins.
- Analysts in this camp see future earnings and cash flow as not fully reflected in current pricing, even after assuming lower profit margins over time.
- The view leans on disciplined use of acquisitions, balance sheet strength, and ongoing shareholder returns as support for the current price and their fair value.
🐻 Northern Oil and Gas Bear Case
Fair value: US$24.00
Price vs fair value: about 20.2% above this narrative fair value
Revenue growth assumption: 6.88%
- This angle puts more weight on long term decarbonization trends, tighter regulation, and possible pressure on oil demand and pricing.
- It highlights risks from reliance on acquisitions, aging and concentrated assets, and the possibility of lower returns on new deals.
- Even with a solid balance sheet and diversified exposure across basins, this group of analysts sees the current price as sitting close to or above what their cash flow and margin assumptions support.
If you want to see how other investors join these dots across growth, risks, and valuation, there is also a broader range of community views to compare against your own expectations for Northern Oil and Gas.
Do you think there's more to the story for Northern Oil and Gas? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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