Horizon Oil Valuation

Q: What is the Fair Price of HZN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

HZN (A$0.19) is trading below our estimate of [[fair value]] (A$0.71)

Is HZN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of HZN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HZN (A$0.19) is trading below our estimate of fair value (A$0.71)

Significantly Below Fair Value: HZN is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HZN?

Key metric: As HZN is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for HZN. This is calculated by dividing HZN's market cap by their current earnings.
What is HZN's PE Ratio?
PE Ratio	7.6x
Earnings	US$25.90m
Market Cap	US$200.97m

HZN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.6x
Enterprise Value/EBITDA	2.6x
PEG Ratio	1.8x

Price to Earnings Ratio vs Peers

How does HZN's PE Ratio compare to its peers?

The above table shows the PE ratio for HZN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	15.5x
ECH Echelon Resources	23.1x	n/a	AU$81.8m
CUE Cue Energy Resources	4.9x	n/a	AU$69.9m
MAY Melbana Energy	31x	n/a	AU$101.1m
KAR Karoon Energy	2.8x	-12.1%	AU$1.1b
HZN Horizon Oil	7.6x	4.2%	AU$301.0m

Price-To-Earnings vs Peers: HZN is good value based on its Price-To-Earnings Ratio (7.6x) compared to the peer average (15.5x).

Price to Earnings Ratio vs Industry

How does HZN's PE Ratio compare vs other companies in the AU Oil and Gas Industry?

3 Companies	Price / Earnings	Estimated Growth	Market Cap
FAR FAR	0.8x	n/a	US$29.52m
IKW Ikwezi Mining	1.7x	n/a	US$12.55m
XST Xstate Resources	0.7x	n/a	US$1.89m

No more companies available in this PE range

3 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: HZN is good value based on its Price-To-Earnings Ratio (7.6x) compared to the Australian Oil and Gas industry average (12.7x).

Price to Earnings Ratio vs Fair Ratio

What is HZN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HZN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.6x
Fair PE Ratio	8x

Price-To-Earnings vs Fair Ratio: HZN is good value based on its Price-To-Earnings Ratio (7.6x) compared to the estimated Fair Price-To-Earnings Ratio (8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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