ANTERO MIDSTREAM CORPORATION (AM): what the price requires
At today's price, ANTERO MIDSTREAM CORPORATION (AM) is priced for +4.6% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/AM
Headline
| Field | Value |
|---|---|
| Ticker | AM |
| Company | ANTERO MIDSTREAM CORPORATION |
| Current price | $22.51/sh |
| Composition | Gathering-low pressure 38% / Compression 23% / Gathering-high pressure 22% / Fresh water delivery 13% / Other fluid handling 10% / Amortization of customer relationships -6% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | segment |
| Implied growth | 4.6% |
Solve inputs: computed at a 8.1% cost of capital with 5% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.4pp.
Reconcile: at the x-ray's 9.3% required return this reads ~13.6%/yr; the models below use their own rates.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| cohort percentile (of 72 peers) | 53 |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.42x | 5 | expensive |
| Earnings | 2.42x | 5 | expensive |
| Relative | 2.18x | 5 | expensive |
| Growth | 1.02x | 4 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.9%); the inversion above states its own rate.
Per-Model Detail (n=19)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $54.75 | 0.41x | yes | FCF base $1.0B, growth 8% (input: historical growth), terminal g 4.0%, WACC 7.9%, 6yr projection |
| DCF Exit Multiple | Growth | $31.09 | 0.72x | yes | Exit EV/EBITDA: 16.2x / 18.2x / 20.2x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $16.24 | 1.39x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.6x / 20.0x / 23.4x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $15.45 | 1.46x | yes | Stage 1: 2% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $9.29 | 2.42x | yes | BV/sh $4.05, ROE (TTM) 21.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $13.96 | 1.61x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $17.10 | 1.32x | yes | Rev $1.2B, growth 8% (input: historical growth; tapered), Terminal P/S: 6.6x / 8.0x / 9.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $10.32 | 2.18x | yes | EPS $0.86, growth 2% (input: historical EPS growth), PEG=15.98 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $4.73 | 4.76x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.61B × (1−24%) / WACC 7.9% → EPV (no growth) |
| Residual Income | Asset | $13.26 | 1.70x | yes | BV $4.05 + 5yr PV of (ROE (TTM) 21.2% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $8.85 | 2.54x | yes | √(22.5 × EPS $0.86 × BVPS $4.05) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $13.88 | 1.62x | yes | EBITDA $0.79B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $14.32 | 1.57x | yes | FCF $972.1M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $13.32 | 1.69x | yes | SBC-adj FCF $0.93B (FCF $0.97B − SBC $0.04B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $8.49 | 2.65x | yes | EPS $0.86 × (8.5 + 2×1.6%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $1.32 | 17.05x | yes | BV $4.05 × (ROIC 2.6% / WACC 7.9%) |
| P/Sales Sector | Relative | $6.34 | 3.55x | yes | Revenue $1.21B × sector P/S 2.5x |
| PEG Fair Value | Relative | $4.30 | 5.23x | yes | EPS $0.86 × (PEG 1.5 × growth 1.6% (input: historical EPS growth)) → PE 2.5x |
| Earnings Yield | Earnings | $9.30 | 2.42x | yes | EPS $0.86 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $3.5b |
| Net debt / NOPAT (after-tax) | 6.27x |
| Net debt / operating income (pre-tax) | 4.76x |
| Share count CAGR (buyback) | -0.1% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Antero Midstream owns the pipes, compressors, and water systems that gather and move natural gas for Antero Resources, earning fee-based revenue that is largely tied to volumes and escalates each year with inflation rather than swinging with the gas price.
- The defining feature is single-customer concentration: Antero Resources has accounted for substantially all of its revenue since inception, so the durability of the whole business rests on one producer's drilling and creditworthiness.
- The balance sheet is the swing factor: management is steering leverage down toward about 3.0 times EBITDA by year-end 2026 after a roughly $1.1 billion acquisition, while still generating free cash flow after the dividend.
Bull Case
Start with the risk that scares people off, because it is the right one and the bull case has to answer it. Antero Midstream sells almost entirely to one customer. Its 10-K states plainly that "Antero Resources is our most significant customer and has accounted for substantially all of our revenue since inception, and we expect to derive most of our revenues" from it going forward. A midstream company with one counterparty is hostage to that counterparty's drilling plans and balance sheet. So does the structure of the relationship actually support the price, or is the concentration as fragile as it looks? The contracts say it is sturdier than it looks. The gathering and compression fees are "substantially all of which are subject to annual CPI-based adjustments," and the agreements carry minimum volume commitments, so even in a soft year Antero Midstream collects fees that rise with inflation on a contracted floor of volume. That is a fee-based annuity, not a commodity bet.
The economics that annuity produces are strong and improving. The business generated free cash flow near $972 million on a trailing basis, and in the first quarter of 2026 it produced $192 million of free cash flow before its dividend and $85 million after, an 8% year-over-year increase, while adjusted EBITDA rose 5% to $288 million. Crucially, the dividend is covered: the company is still generating cash after paying it, which is the test of whether a high-yield midstream payout is real or borrowed. A return on equity above 20% on a contracted, inflation-linked fee stream is the kind of durable cash generation the static valuation methods, built for cyclical operating businesses, structurally undervalue.
The growth angle is incremental but real, and the recent acquisition extends it. In February 2026 the company closed its largest-ever acquisition, around $1.1 billion, integrated the assets through a winter storm without outages, and is completing water-system integration to service the new assets in 2027. Management targets high-single-digit EBITDA growth from increased gathering and freshwater delivery, and points to incremental demand from data centers and local power projects as natural-gas consumption in the region rises. A fee annuity that escalates with inflation, covers its dividend, grows modestly through bolt-on assets, and sits in front of a power-demand tailwind is the bull case, and the concentration risk is contained by the contract structure rather than ignored.
Bear Case
The balance sheet is the structural pressure point, and for a midstream it is the part that turns a steady business fragile under stress. Antero Midstream carries net debt near $3.5 billion, and on the company's own preferred measure leverage sits in the low-3-times range against EBITDA, after the roughly $1.1 billion acquisition pushed it up. That is typical for the sector, but typical does not mean safe: a debt-funded business that returns most of its cash as dividends has little buffer. The dividend, the deleveraging plan, and the capital spending all compete for the same cash flow, and a high payout ratio means a shortfall in any one forces a choice. The company is steering leverage down toward 3.0 times by year-end, which is the right direction, but the plan depends on EBITDA growing as guided and capital spending staying disciplined, and seasonal capital needs are rising.
The concentration the bull case answers does not disappear; it just becomes the bear's tail risk. Because Antero Resources is effectively the only customer, anything that "materially and adversely affects Antero Resources' operations, financial condition or market reputation could have a material and adverse impact on us." The minimum volume commitments protect the near-term cash flow, but they are commitments from a single producer whose own economics depend on the natural-gas price. The auditors flag exactly this, noting they spent effort "evaluating the minimum volume commitments with Antero Resources Corporation and their impact on the recoverability of the long-lived assets." If a sustained downturn in gas prices forced Antero Resources to cut drilling, the long-run volume growth that supports the valuation would slow, and a levered midstream with one customer has fewer ways to offset that than a diversified peer.
The valuation is where the bear has the cleanest case. Almost none of the methods reach the price. The asset, earnings-power, and peer-multiple lenses cluster well below $21.72 (June 27, 2026), with an earnings-power value near $5, a free-cash-flow capitalization near $14, and a peer earnings multiple near $16. Only the forward-growth methods reach the price, and they get there by projecting the contracted cash flow forward and discounting it. That means the premium over the static methods is entirely a durability bet: it assumes the fee annuity persists and grows for years. For a business with one customer and meaningful leverage, that is a demanding assumption to pay up for, and if either the customer concentration or the balance sheet bites, the price has a long way to fall toward where the demonstrated-earnings methods value it.
Valuation
The price is a durability premium on a contracted cash stream, and the spread among the methods says so cleanly. At $21.72, the static lenses that value Antero Midstream on its assets, its demonstrated earnings power, and peer multiples all land well below the price: an earnings-power value near $5, a free-cash-flow capitalization near $14, a peer earnings multiple near $16, and a dividend-discount read near $15. Only the forward-growth methods reach the price, with a perpetual-growth cash-flow read near $55 and an exit-multiple read near $30. When only the growth methods justify the price, the premium is a bet on the fee annuity persisting, which the static frames, designed for businesses whose cash flows are not contractually locked, cannot credit. The inversion confirms the bet is modest in pace, requiring only about 3.4% growth, which is consistent with an inflation-escalated fee stream rather than a high-growth story.
The right peer frame is other fee-based midstream and contracted-infrastructure names, not industrial-company multiples, because the value here is the durability of the contract, not an operating margin. Against that cohort, Antero Midstream's distinguishing feature is the single-customer concentration, which is the reason it can both earn a high return on equity and carry a premium to the static methods: the contracts with Antero Resources, CPI-escalated and backed by minimum volume commitments, are what make the cash flow annuity-like. The premium over the asset methods is the market paying for that contracted durability, and the bear and bull disagree only on whether the durability is as solid as the contracts imply given the one-customer structure.
Solvency is the load-bearing part of the downside and the part the buyer must weigh. Net debt near $3.5 billion sits at low-3-times EBITDA on the company's measure, with over $800 million of liquidity, and management is steering leverage toward 3.0 times by year-end 2026. The dividend is currently covered, with free cash flow positive after the payout, which is the single most important solvency fact for a high-yield midstream: the distribution is funded by cash, not by new debt. The risk is that the deleveraging, the dividend, and rising seasonal capital spending all draw on the same cash flow, so a slowdown in the contracted volumes, driven by the one customer, would tighten all three at once. The price assumes the annuity holds and the balance sheet keeps improving; the buyer is underwriting both.
Catalysts
Antero Midstream's first quarter of 2026 was a steady operational print built around its biggest deal. Adjusted EBITDA rose 5% year over year to $288 million, revenue of about $314 million beat expectations, and free cash flow was $192 million before the dividend and $85 million after it, up 8% year over year. The headline event was the roughly $1.1 billion acquisition that closed in February, the company's largest, which it integrated through winter storm Gerri without outages and is now wiring into its water system to service the acquired assets in 2027.
The forward markers center on deleveraging and incremental demand. Management kept its 2026 guidance unchanged, targeting high-single-digit EBITDA growth from higher gathering and freshwater volumes and steering leverage down toward about 3.0 times EBITDA by year-end, having exited the quarter in the low-3-times range with over $800 million of liquidity. It also flagged incremental opportunities from data centers and local power projects as regional gas demand grows. The next earnings prints are the read on whether leverage declines on schedule and whether the acquired assets and water integration deliver the guided EBITDA step-up, since the durability premium in the price depends on both the deleveraging and the contracted volume growth materializing.
Peer Cohorts (Per Segment, With Filing Citations)
Gathering and Processing (reported)
- WMB (WILLIAMS COMPANIES, INC.)
- FY2025 10-K: …volumes and the MVC for a stated period. Demand for gas gathering and processing services is dependent on producers' drilling activities, which is impacted by the strength of the economy, commodity prices, and the resulting demand for natural gas by manufacturing and industrial companies and consumers. Williams'…
- FY2025 10-K: …of necessary permits and opposition to hydrocarbon-based energy development; • Producer drilling activities impacting natural gas supplies supporting Williams' gathering and processing volumes; • Retaining and attracting customers by continuing to provide reliable services; • Revenue growth associated with additional…
- OKE (ONEOK INC /NEW/)
- FY2025 10-K: …areas in Canada and the United States via our interstate and intrastate natural gas pipelines, Northern Border and Matterhorn, which enables us to provide essential natural gas transportation and storage services. Growing demand from data centers and continued demand from local distribution companies,…
- FY2025 10-K: …revenues, as described below: Commodity Sales (all segments) - We contract to deliver residue natural gas, unfractionated NGLs and/or Purity NGLs, Refined Products, condensate and crude oil to customers at a specified delivery point. Our sales agreements may be daily or longer-term contracts for a specified volume.…
- KMI (KINDER MORGAN, INC.)
- FY2025 10-K: …that store fuels and offer blending services for ethanol and biodiesel. The transportation and storage volume levels are primarily driven by the demand for the refined petroleum products being shipped or stored. Demand for refined petroleum products tends to follow trends in population and economic growth, and, with…
- FY2025 10-K: …on estimated economic lives. This includes age, manufacturing specifications, technological advances, estimated production life of the oil or gas field served by the asset, contract terms for assets on leased or customer property, and historical data concerning useful lives of similar assets. Gains and losses • A…
- TRGP (TARGA RESOURCES CORP.)
- FY2025 10-K: …facility design and economies of scale. The Gathering and Processing segment's assets are located in the Permian Basin of West Texas and Southeast New Mexico (including the Midland, Central and Delaware Basins); the Eagle Ford Shale in South Texas; the Barnett Shale in North Texas; the Anadarko, Ardmore, and Arkoma…
- FY2025 10-K: …to market hubs and fractionation is expected to continue to grow. Continued demand for transportation, fractionation and export capacity is expected to lead to increased demand for other related fee-based services provided by our logistics and transportation assets as well as provide other growth opportunities. The…
- ET (ENERGY TRANSFER LP)
- FY2025 10-K: …industry consists of natural gas gathering, compression, treating, dehydration and processing, and is generally characterized by regional competition based on the proximity of gathering systems and processing plants to natural gas producing wells and the proximity of storage facilities to production areas and end-use…
- FY2025 10-K: …so the classification and regulation of our gathering facilities could be subject to change based on future determinations by the FERC, the courts and Congress. State regulation of gathering facilities generally includes various safety, environmental and, in some circumstances, nondiscriminatory take requirements and…
- EPD (ENTERPRISE PRODUCTS PARTNERS L.P.)
- FY2025 10-K: …Our natural gas transmission pipelines transport natural gas from regional processing facilities to downstream electric generation plants, local gas distribution companies, industrial and municipal customers, storage facilities or other connecting pipelines. The results of operations from our natural gas pipelines…
- FY2025 10-K: …companies. The crude oil business can be characterized by intense competition for supplies of crude oil at the wellhead. Competition is based primarily on quality of customer service, competitive pricing and proximity to customers and market hubs. Natural Gas Pipelines & Services In our natural gas gathering…
- PAA (PLAINS ALL AMERICAN PIPELINE LP)
- FY2025 10-K: …of gathering and transporting crude oil using pipelines (including gathering systems), trucks and, at times, on barges or railcars, in addition to providing terminalling, storage and other related services utilizing our integrated assets across the United States and Canada. Our assets provide services to third…
- FY2025 10-K: …or other major market hubs, such as the Houston market. Our crude oil terminals have significant flexibility and operational capabilities, including large-scale multi-grade handling and segregation capabilities and multiple marine transportation loading and unloading capabilities. Our largest crude oil terminals are…
Water Handling (reported)
- WES (Western Midstream Partners, LP)
- FY2025 10-K: …at the DBM water systems, West Texas complex, Powder River Basin complex, and DJ Basin complex. 129 Table of Contents WESTERN MIDSTREAM PARTNERS, LP AND WESTERN MIDSTREAM OPERATING, LP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 17. REPORTABLE SEGMENT Segment overview. The Partnership's chief operating decision maker…
- FY2025 10-K: …for fee-based contracts in the month of service based on the volumes delivered by the customer. Producers' wells or production facilities are connected to the Partnership's gathering systems for gathering, processing, treating, transportation, and disposal of natural gas, NGLs, condensate, crude oil, and produced…
- DTM (DT Midstream, Inc.)
- FY2025 10-K: …companies own and operate these types of assets across multiple states. Our natural gas gathering systems primarily consist of networks of pipelines that collect natural gas from points at or near our customers' wells for delivery to plants for treating, to gathering pipelines for further gathering, or to pipelines…
- FY2025 10-K: …leverage our current asset footprint and strategic relationships. These growth opportunities include expansion opportunities on the DTM Interstate Transportation assets, further expansion at LEAP and Stonewall, new contracts at the Washington 10 Storage Complex and additional growth related to our equity method…
- OKE (ONEOK INC /NEW/)
- FY2025 10-K: …NGLs extracted at our own and third-party natural gas processing plants are gathered by our NGL gathering pipelines. Gathered NGLs are directed to our downstream fractionators to be separated into Purity NGLs. Purity NGLs are stored or distributed to our customers, such as petrochemical companies, propane…
- FY2025 10-K: …through NGL pipelines to fractionation facilities for further processing. In our Natural Gas Liquids segment, NGLs are extracted at our own and third-party natural gas processing plants and are gathered by our NGL gathering pipelines. Gathered NGLs are directed to our downstream fractionators to be separated into…
- TRGP (TARGA RESOURCES CORP.)
- FY2025 10-K: …the Logistics and Transportation segment's fractionation and treating facilities: Facility Location % Owned Capacity (MBbl/d) (1) Throughput 2025 (MBbl/d) Cedar Bayou Fractionators (2) Mont Belvieu, TX 100.0 493.0 Train 6 Fractionator Mont Belvieu, TX 100.0 110.0 Train 7 Fractionator Mont Belvieu, TX 80.0 120.0 Train…
- FY2025 10-K: …terminaling facilities to support our key fractionation facilities at Mont Belvieu and Lake Charles for receipt of mixed NGLs and storage of fractionated NGLs to service the petrochemical, refinery, export and heating customers/markets as well as our wholesale domestic terminals that focus on logistics to service the…
- KMI (KINDER MORGAN, INC.)
- FY2025 10-K: …to changing market conditions. To the extent practicable and economically feasible in light of our strategic plans and other factors, we generally attempt to mitigate the risk of reduced volumes and pricing by negotiating contracts with longer terms, with higher per-unit pricing and for a greater percentage of our…
- FY2025 10-K: …and governmental regulations, the ability to convert to alternative fuels, and weather. 9 Products Pipelines Our Products Pipelines business segment consists of our refined petroleum products, crude oil, and condensate pipelines, and associated terminals, our condensate processing facility, and our transmix…
- ET (ENERGY TRANSFER LP)
- FY2025 10-K: …industry consists of natural gas gathering, compression, treating, dehydration and processing, and is generally characterized by regional competition based on the proximity of gathering systems and processing plants to natural gas producing wells and the proximity of storage facilities to production areas and end-use…
- FY2025 10-K: …basins in the United States. ◦ Permian Basin: Our Permian Basin gathering assets in West Texas and eastern New Mexico encompass multiple systems in highly active areas of both the Delaware and Midland basins, with the ability to deliver virtually all gathered crude to major market hubs, including Midland, Wink and…
- EPD (ENTERPRISE PRODUCTS PARTNERS L.P.)
- FY2025 10-K: …In addition to the operational storage capacity associated with our crude oil pipelines, we also own and operate crude oil terminals located in Houston, Midland and Beaumont, Texas and Cushing, Oklahoma that are used to store crude oil for us and our customers. In conjunction with other aspects of our midstream…
- FY2025 10-K: …a given point in time between various segments of each system (e.g., demand levels at each delivery point and the mix of products being transported). As a result, we measure the utilization rates of our petrochemical pipelines in terms of net throughput, which reflects throughput for assets owned by consolidated…
- WMB (WILLIAMS COMPANIES, INC.)
- FY2025 10-K: …of necessary permits and opposition to hydrocarbon-based energy development; • Producer drilling activities impacting natural gas supplies supporting Williams' gathering and processing volumes; • Retaining and attracting customers by continuing to provide reliable services; • Revenue growth associated with additional…
- FY2025 10-K: …Assets This segment includes Williams' natural gas gathering, compression, processing, and NGL fractionation businesses in the Marcellus and Utica Shale regions in Pennsylvania, West Virginia, New York, and Ohio. The following tables summarize the significant operated assets of this segment: Natural Gas Gathering…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
company FY2025 10-K · Q1 FY2026 earnings call · Q1 FY2026 earnings release