APA Corporation (APA) Stock Analysis: Comprehensive Equity Research Report 2024-2025
Welcome to our in-depth APA stock analysis and equity research report for APA Corporation (ticker: APA). As a leading independent upstream energy company, APA focuses on oil, natural gas, and natural gas liquids exploration and production. This report covers key aspects of APA stock forecast, financial performance, valuation, and investment insights based on the latest data from 2024 10-K filings, earnings releases up to February 2025, and recent market trends as of September 19, 2025. Whether you're researching APA stock price, analyst ratings, or long-term growth potential, this guide provides actionable insights.
Business Overview: Key Points for APA Corporation
APA Corporation operates with a diversified geographical portfolio, emphasizing high-margin assets in the U.S. Permian Basin while maintaining international operations. Below are the three most important points from our equity research analysis:
- Diversified Geographical Portfolio with U.S. Dominance: APA's operations span the United States (65% of 2024 revenues, $6.33 billion, primarily Permian Basin), Egypt (29%, $2.82 billion via joint ventures), and Other International (6%, $0.58 billion, including Suriname). This diversification offers resilience, with U.S. assets growing from 50% of adjusted production in 2020 to 70% in 2024 through strategic investments and divestitures.
- Competitive Advantages and Financial Discipline: Strengths include operational efficiencies, a robust balance sheet with $5.9 billion adjusted EBITDAX in 2024, and the Callon Petroleum acquisition boosting Permian production by 8% YoY. Free cash flow reached $841 million, with 71% returned to shareholders, though commodity volatility and debt levels pose risks.
- Growth Opportunities and Forward Guidance: APA targets high-return projects like Suriname's 220,000 barrels per day development (FID in 2024). Short-term guidance projects 400,000-450,000 BOE/day production and $1.5-2.0 billion annual FCF for 2025-2027, with mid-term goals exceeding 500,000 BOE/day by 2030.
- Robust Revenue Growth Amid Volatility: Revenues grew from $4,435 million in 2020 to $9,737 million in 2024 (21.8% CAGR), driven by acquisitions and commodity prices. U.S. operations led with 22.0% growth in 2024, outperforming industry benchmarks.
- Profitability Peaks and Stabilization: Gross margins hit 56.5% in 2022, moderating to 44.2% in 2024, with EBIT at $3,199 million. ROIC averaged 10.6% over five years, above the sector's ~8% average, thanks to efficient Permian assets.
- Resilient Cash Flows and Positive Outlook: FCF stabilized at $841 million in 2024, with consensus estimates forecasting $10,200 million revenue in 2025 (4.8% growth) and $10,800 million in 2026. APA earnings report shows strong potential for $900 million FCF in 2025.
For more on APA investment analysis, explore our detailed APA stock valuation section below.
Financial Analysis: Revenue, Profitability, and Cash Flow Insights
Our APA financial analysis highlights robust growth tempered by sector volatility. Key takeaways include:
Stay updated with the latest APA stock news and performance metrics for informed decisions.
Final Thoughts: Pros, Cons, and Valuation Comparison
In conclusion, APA Corporation offers a compelling investment in the oil and gas sector, with strong Permian assets and growth projects balanced against volatility. Recent APA stock price is approximately $24.16 (as of recent Nasdaq data, reflecting a -1.45% decline). Consensus APA stock target price is $23.85, with a Hold rating.
Pros and Cons
Pros: Diversified portfolio, operational efficiencies (low breakeven costs), $841 million 2024 FCF, and optimistic guidance for 400,000-450,000 BOE/day in 2025-2027.
EBITDA margin of 61% outperforms peers.Cons: Commodity price risks ($1/barrel change impacts $100 million cash flow), geopolitical issues in Egypt, and high capex ($2,851 million in 2024). Revenue declined -13.6% YoY in Q2 2025.
| Segment | Revenue ($ billion) | Percentage of Total |
|---|---|---|
| United States | 6.33 | 65% |
| Egypt | 2.82 | 29% |
| Other International | 0.58 | 6% |
Valuation Comparison
At $24.16, APA appears modestly undervalued. DCF implies $34.18 per share (41% upside). Trailing P/E is 8.27 (below peer 10-15x), forward P/E 7.2, and PEG 0.17. Market cap is ~$8.55 billion.
| Year | Revenue ($ million) | Net Income ($ million) | Free Cash Flow ($ million) | Trailing P/E Ratio |
|---|---|---|---|---|
| 2020 | 4,435 | -4,860 | -1,000 | N/A |
| 2021 | 7,985 | 973 | 1,500 | 12.5 |
| 2022 | 11,075 | 3,674 | 2,545 | 6.8 |
| 2023 | 8,279 | 2,858 | 772 | 7.9 |
| 2024 | 9,737 | 804 | 841 | 8.27 |
For APA stock buy or sell recommendations, consider its 4.14% dividend yield and growth drivers. This APA equity research report is based on public data as of September 19, 2025.