The estimated intrinsic value of Antero Resources Corporation (AR) using a 20-year Discounted Cash Flow (DCF) model is $129.64 (based on the recommended Free Cash Flow method), compared to the current stock price of $36.11. This suggests the stock may be undervalued by 259.0% relative to its intrinsic value.
The model uses a growth rate of 12.55% for years 1-5, 11.55% for years 6-10, and 4% as the terminal rate, with a discount rate of 4.09% (CAPM-derived from beta of 0.42). Intrinsic values across all methods: Operating Cash Flow (OCF): $174.75 | Free Cash Flow (FCF): $129.64 | Net Income (NI): $58.83.
ℹ Why does our Intrinsic Value (IV) differ from analyst targets?
Our Discounted Cash Flow (DCF) model estimates Intrinsic Value (IV) at $129.64, while the analyst consensus target is $44.25 — a 193% gap.
Stock-Based Compensation (SBC) inflates Operating Cash Flow. This company's OCF is more than double its Net Income, while Free Cash Flow is close to OCF (low CapEx). The large OCF-to-NI gap is primarily from Stock-Based Compensation being added back to OCF. SBC is a real cost — it dilutes shareholders by issuing new shares. Our DCF model uses Net Income as the base instead of OCF, which accounts for the true dilution cost. If you see the OCF method showing a much higher IV, this is why — it overstates value by ignoring SBC dilution.
Tip: Try adjusting the growth rate and discount rate below to see how different assumptions affect the valuation.
DCF-20 Year
AR
Intrinsic Value Calculator —
Antero Resources Corporation
USD36.11
▼ 2.96%
Recommended: Operating Cash Flow exceeds 257% of Net Income. This gap is typically caused by large Depreciation & Amortization (D&A) charges being added back to Net Income when computing Operating Cash Flow — meaning Antero Resources Corporation has significant Capital Expenditure (Capex). Because Depreciation & Amortization (D&A) is a non-cash charge — Antero Resources Corporation already spent the cash buying the asset years ago, but the accounting cost is spread across many years — Operating Cash Flow adds it back and appears higher than actual cash profitability. Free Cash Flow (Operating Cash Flow minus Capital Expenditure) removes this effect and reflects the actual cash left over after maintaining and growing the asset base. Recommend to Use: Discounted Free Cash Flow.
Operating Cash Flow (M)FY2025
USD
Total Debt (M)
USD
Cash & Investments (M)
USD
Discount Rate (%)
%
r = RFR + β × MRP
= 2.43% + 0.5 × 3.31%
= 4.09%
RFR2.43%Risk-Free Rate (government bond yield) · US market
MRP3.31%Market Risk Premium (expected excess return over RFR)
β0.5 (floor)Beta: stock volatility relative to market (5-year monthly regression vs S&P 500) · raw β = 0.42; floor 0.5 applied — very low-beta stocks still carry some market risk
Shares Outstanding (M)
Growth Rate based on analyst consensus EPS — same across OCF / FCF / NI
Year 1–5 (%)
%
Year 6–10 (%)
%
Year 11–20 (%)
%
Growth Rate Derivation — Analyst Consensus EPS
Fiscal Year
2026
2027
2028
2029
2030
Reg. g1
EPS (USD)
4.25
4.68
5.33
5.10
5.21
12.55%
Linear regression on actual & estimated EPS. Dashed amber line = g1 projection. g1 = 5-yr forward CAGR implied by fitted curve.
UndervaluedOvervalued
Intrinsic value USD —
Intrinsic Price
USD —
Stock Price
USD 36.11
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⚠ IV significantly above analyst consensus
Our DCF model estimates an intrinsic value of $129.64, which is 193% above the analyst consensus target of $44.25. This usually indicates the growth rate assumption (g₁ = 12.55%) may be too aggressive — often caused by volatile or recently-negative earnings distorting the historical trend.
💡 Suggestion:
Try reducing the Growth Rate (g₁) slider to bring the IV closer to analyst consensus. You can also compare with the Analyst Consensus page for additional context.
20-Year DCF Breakdown
Year
Projected CF (M)
Discount Factor
Present Value (M)
Discounted Cash Flow over 20 years using Operating Cash Flow as the base metric, projected across three growth phases and discounted to present value.
High Growth Phase — Years 1–5
The company is assumed to be in its strongest growth period. Cash flows are projected at the highest rate g₁, reflecting rapid expansion, market share gains, or strong earnings momentum over the next 5 years.
Transition Phase — Years 6–10
Growth begins to moderate as the business matures and competition intensifies. Cash flows in years 6–10 are projected at a lower rate g₂, bridging the gap between early explosive growth and long-term stability.
Terminal Phase — Years 11–20
The company is assumed to be fully mature, growing in line with the broader economy. The terminal growth rate g₃ (typically 3–4%, close to long-run GDP growth) is applied to years 11–20, representing sustainable perpetual growth.
IVIntrinsic Value per share — the estimated true worth of one share based on discounted future cash flows over 20 years
OCF0Operating Cash Flow — cash generated from core business operations, including D&A, before capital expenditures
g1High growth rate (Yr 1–5) — auto-calculated from 3-year historical CAGR of cash flows; adjust based on your outlook
g2Transition growth rate (Yr 6–10) — typically 60% of g₁, reflecting slowing momentum as the business matures
g3Terminal growth rate (Yr 11–20) — long-run sustainable growth, typically 3–4% matching nominal GDP growth
DTotal Debt — sum of short-term and long-term borrowings; deducted from IV because debt is a prior claim on cash flows
CCash & Short-term Investments — liquid assets held by the company; added back to IV as they belong directly to shareholders
NShares Outstanding — divides total company value into per-share terms, making it directly comparable to the market price
Same 20-year DCF structure using Free Cash Flow (Operating Cash Flow minus CapEx) — reflects cash actually available to shareholders after reinvestment.
High Growth Phase — Years 1–5
Free cash flow projected at the highest rate g₁ for years 1–5, capturing the company's peak earnings expansion period.
Transition Phase — Years 6–10
FCF growth slows to g₂ in years 6–10, reflecting business maturation and increasing competition eroding excess returns.
Terminal Phase — Years 11–20
FCF grows at the terminal rate g₃ (≈ GDP growth) for years 11–20, representing the steady-state long-run rate a mature business can sustain.
FCF0Free Cash Flow = Operating Cash Flow − CapEx. Represents cash truly available to shareholders after reinvestment needed to maintain the business
D, C, NTotal Debt, Cash & Investments, Shares Outstanding — same definitions as OCF method
Same 20-year DCF using Net Income as the base metric. Suitable for asset-light businesses where earnings closely track distributable value.
High Growth Phase — Years 1–5
Net income projected at the highest rate g₁ for years 1–5. Best suited for asset-light companies (software, financials, consumer brands) where net income closely tracks shareholder value.
Transition Phase — Years 6–10
Earnings growth decelerates to g₂ in years 6–10 as profit margins normalise and competitive moats are tested.
Terminal Phase — Years 11–20
Earnings grow at terminal rate g₃ for years 11–20. This phase often dominates total present value, so the choice of terminal rate significantly impacts the final IV estimate.
NI0Net Income = Revenue − all expenses, interest & taxes. For asset-light companies, NI closely approximates distributable cash to shareholders
g1, g2, g3Three-phase Net Income growth rates, auto-calculated from historical earnings CAGR
