Is It Too Late To Consider FLEX LNG After A 480% Five Year Surge?

• If you are wondering whether FLEX LNG still offers good value after its strong run, or if you might be late to the party, this breakdown can help you decide whether it deserves a spot on your radar.
• The stock is up 28.5% over the last year and 480.2% over five years. Year to date it is still rising 6.4%, despite a flat 0.4% over 30 days and a small 1.7% dip this week that may have caught value hunters’ attention.
• Recent trading has been driven more by shifting sentiment toward LNG shipping and expectations for future charter demand, rather than any single company-specific announcement. This makes FLEX LNG a classic case in which macro narratives and sector flows can move the share price as much as fundamentals.
• On our valuation checks, FLEX LNG scores a 3 out of 6, suggesting the stock appears undervalued on some metrics but not convincingly cheap across the board. In the sections ahead we will walk through each valuation lens, then finish with a more holistic way to judge whether the current price really makes sense.

FLEX LNG delivered 28.5% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

Approach 1: FLEX LNG Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today in $ terms.

For FLEX LNG, the starting point is last twelve month free cash flow of about $156.6 million. Analysts explicitly forecast free cash flow of $183.5 million in 2026 and $215.5 million in 2027. Simply Wall St then extrapolates this trajectory further, with projections rising to roughly $348.6 million by 2035 as growth gradually slows over time.

Using a 2 Stage Free Cash Flow to Equity model, these future cash flows are discounted to arrive at an estimated intrinsic value of about $94.28 per share. Compared with the current market price, this implies FLEX LNG is trading at roughly a 72.6% discount to its DCF fair value, suggesting the stock looks materially undervalued on this basis alone.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests FLEX LNG is undervalued by 72.6%. Track this in your watchlist or portfolio, or discover 909 more undervalued stocks based on cash flows.

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

Approach 2: FLEX LNG Price vs Earnings

For a consistently profitable company like FLEX LNG, the price to earnings ratio is a practical way to gauge how much investors are paying for each dollar of current profits. In general, faster growth and lower perceived risk justify a higher PE multiple, while slower growth or higher risk usually call for a lower, more conservative PE.

FLEX LNG currently trades on a PE of about 14.2x, slightly above the Oil and Gas industry average of roughly 13.8x and the broader peer group at around 12.6x. On the surface, that suggests the stock is priced at a modest premium to its sector. However, Simply Wall St’s Fair Ratio, which estimates what a reasonable PE should be after accounting for earnings growth, profitability, industry positioning, company size and specific risks, comes in higher at about 17.6x.

Because the Fair Ratio is tailored to FLEX LNG’s own fundamentals rather than broad peer comparisons, it gives a more nuanced read on value. With the stock trading below this 17.6x Fair Ratio, the PE view points to FLEX LNG being somewhat undervalued on earnings.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your FLEX LNG Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, a simple way to attach your own story about FLEX LNG to the numbers. You do this by linking what you believe about its contracts, fleet, growth and risks to a clear forecast for future revenue, earnings and margins, and then to a Fair Value you can compare with today’s share price on Simply Wall St’s Community page. On this page, millions of investors share and update their Narratives dynamically as new news or earnings arrive. A bullish investor might see FLEX LNG’s long contract backlog, young fleet and tightening post 2028 supply as supporting higher margins, stronger earnings and a Fair Value well above the current price. By contrast, a more cautious investor could focus on the wave of new vessels, high payouts and soft demand in key markets to model weaker charter rates, lower earnings and a Fair Value below the current price. This can help each investor decide, in a structured and repeatable way, whether FLEX LNG is a stock to buy now, hold patiently, or sell.

Do you think there's more to the story for FLEX LNG? 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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