What the Recent 4% Slide Means for International Petroleum Stock in 2025

Trying to decide what to do with International Petroleum stock? You are not alone. Investors have watched this stock swing sharply in recent months, sparking a mix of excitement and tough questions about what comes next. Over the past week, the stock dipped 4.1%, extending a 30-day slide to almost 9%. At first glance, this might be enough to scare off even longtime holders. However, looking further back reveals a much brighter story. International Petroleum is up 33% year-to-date, 31.1% over the past twelve months, and a staggering 867% over five years. Those are the kinds of numbers that prompt investors to consider whether corrections like this are a buying opportunity or a warning sign.

Some of the recent movement seems tied to changing market dynamics, especially as oil sector sentiment shifts. Volatility is no stranger to energy stocks, but price strength over the long term suggests investors have seen real value here, not just hype. Naturally, the next logical question is valuation. Are you getting a deal by buying International Petroleum today, or is there more risk than reward at the moment? The company’s current valuation score is 2 out of 6, suggesting it only passes a couple of the key tests for being considered “undervalued.”

Let's break down how those scores are calculated, exploring both traditional and contemporary valuation checks. In addition, there is an even smarter perspective on valuing a fast-changing company like International Petroleum that will be discussed by the end of this article.

International Petroleum scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: International Petroleum Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and discounting them back to today's value. This approach helps investors gauge whether a company’s shares are trading above or below what its long-term cash generation potential suggests they are worth.

For International Petroleum, the DCF model uses a 2 Stage Free Cash Flow to Equity framework, relying on both analyst forecasts and extended estimates. Currently, the company reported a Free Cash Flow (FCF) of -$15 million. However, analysts project a rapid turnaround, forecasting FCF to reach $319 million by 2029. Estimates cover the next five years from multiple analysts and are extrapolated beyond that window by Simply Wall St. Each year's FCF growth rate moderates as time extends further.

Based on these projections, the DCF model calculates an intrinsic value of $80.83 per share. This value is 71.3% higher than the current share price, implying the stock is significantly undervalued by the market according to this particular valuation method.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for International Petroleum.

Our Discounted Cash Flow (DCF) analysis suggests International Petroleum is undervalued by 71.3%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: International Petroleum Price vs Earnings

The Price-to-Earnings (PE) ratio is one of the most widely used metrics for valuing profitable companies like International Petroleum, as it directly relates a company’s share price to its per-share earnings. This allows investors to assess how much they are paying for each dollar of profit, making the PE ratio a quick check for whether a stock is relatively expensive or inexpensive versus its expected profit growth.

What counts as a “normal” or “fair” PE ratio depends on key factors such as growth expectations and perceived risk. Fast-growing or lower-risk companies tend to command higher PE ratios, while slow-growing or riskier companies usually trade at lower multiples. For International Petroleum, the company’s current PE is 35x, which is significantly above the Oil and Gas industry average of 12.3x and its peer group average of 16.3x.

However, benchmarks like the industry average and peers do not capture the full picture. Simply Wall St’s proprietary “Fair Ratio” is designed to fill this gap. The Fair Ratio, calculated at 19x for International Petroleum, takes into account important factors such as the company’s earnings growth outlook, profit margin, market capitalization, industry dynamics, and risk profile. The Fair Ratio represents a more tailored estimate of what the company’s PE should be, rather than relying on generic sector trends or similar companies alone.

When comparing International Petroleum's actual PE ratio of 35x to its Fair Ratio of 19x, the stock appears to be trading at a premium above what fundamental factors would typically warrant. This suggests that, based on this model, the stock is currently overvalued.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your International Petroleum Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is your personalized perspective or “story” about a company, connecting your beliefs about its future, such as what sales, earnings, and profit margins will be, to a financial forecast and ultimately to a fair value for the stock.

Narratives let you move beyond headline numbers and dig into the assumptions driving your view on International Petroleum. By sharing your Narrative with the Community on Simply Wall St, you can easily document why you think the company is undervalued or overvalued based on your unique expectations, whether that’s optimism about major projects coming online, cautiousness about risks and competition, or anything in between.

With millions of investors publishing Narratives on the Community page, you can see how others justify their outlook, compare assumptions, and get immediate context when news or earnings are announced, as Narratives update dynamically to reflect the latest information. This helps you make smarter decisions about when to buy or sell, since comparing your own Fair Value against the current Price is clear and fast.

For example, some investors project International Petroleum’s fair value to be as high as CA$28.03 if Blackrod Phase 1 excels and margins climb, while more cautious investors estimate it as low as CA$22.42 if growth or pricing disappoints. This proves there is no single “right” answer, only the story you believe.

Do you think there's more to the story for International Petroleum? Create your own Narrative to let the Community know!

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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