ANTERO RESOURCES CORPORATION (AR): what the price requires

Generated: 2026-07-19 · Source: https://boothcheck.com/report/AR

Headline

Field	Value
Ticker	AR
Company	ANTERO RESOURCES CORPORATION
Current price	$34.25/sh

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Implied growth	14.8%
Multiple paid	17x operating income

Solve inputs: computed at a 9.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.4pp.

How unusual the bet is: within-range

Reference	Value
vs own history	-0.46σ
sustained it ~5 years at this level	51%
implied end-window share	0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

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	0.85x	5	justifies
Earnings	0.64x	5	justifies
Relative	1.07x	5	expensive
Growth	0.47x	3	justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.6%); the inversion above states its own rate.

Per-Model Detail (n=18)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$284.24	0.12x	yes	FCF base $2.0B, growth 25% (input: historical growth), terminal g 4.0%, WACC 7.6%, 5yr projection
DCF Exit Multiple	Growth	$72.37	0.47x	yes	Exit EV/EBITDA: 4.0x / 7.3x / 12.3x (bear / base = today's held flat / bull), 5yr
Relative Valuation	Relative	$32.07	1.07x	yes	P/E 10x (static sector reference · 2026-04), scenarios: 7.5x / 10.0x / 12.0x (bear / base = reference held flat / bull), EV/EBITDA 6x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$34.83	0.98x	yes	BV/sh $25.89, ROE (TTM) 12.4%, ke 9.3%
Two-Stage Excess Return	Asset	$40.11	0.85x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$43.43	0.79x	yes	Rev $5.8B, growth 25% (input: historical growth; tapered), Terminal P/S: 1.4x / 1.8x / 2.2x (bear / base = today's held flat / bull, cap 6x)
Peter Lynch Fair Value	Relative	$37.08	0.92x	yes	EPS $3.09, growth 2% (input: historical EPS growth), PEG=5.32 (Overvalued)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$15.38	2.23x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $0.92B × (1−21%) / WACC 7.6% → EPV (no growth)
Residual Income	Asset	$41.21	0.83x	yes	BV $25.89 + 5yr PV of (ROE (TTM) 12.4% − Kₑ 9.3%) × BV; BV grows 8.1%/yr
Graham Number	Asset	$42.43	0.81x	yes	√(22.5 × EPS $3.09 × BVPS $25.89) — Graham's conservative floor
EV/EBITDA Relative	Relative	$25.43	1.35x	yes	EBITDA $2.11B × sector EV/EBITDA 6.0x
FCF Yield	Earnings	$55.30	0.62x	yes	FCF $2032.2M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	$53.31	0.64x	yes	SBC-adj FCF $1.97B (FCF $2.03B − SBC $0.06B) capitalized at Kₑ
Ben Graham Formula	Earnings	$99.70	0.34x	yes	EPS $3.09 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$15.29	2.24x	yes	BV $25.89 × (ROIC 4.5% / WACC 7.6%)
P/Sales Sector	Relative	$22.36	1.53x	yes	Revenue $5.80B × sector P/S 1.2x
PEG Fair Value	Relative	$115.88	0.30x	yes	EPS $3.09 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings Yield	Earnings	$33.41	1.03x	yes	EPS $3.09 / 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	$2.7b
Net debt / NOPAT (after-tax)	3.82x
Net debt / operating income (pre-tax)	3.02x
Share count CAGR (buyback)	-0.2%
Burning cash	no

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Antero is an Appalachian natural-gas and natural-gas-liquids producer, but the surprise is how much of its value comes from liquids and from selling into premium markets, realizing gas above the Henry Hub benchmark and capturing NGL pricing few peers can match.
• The standout figure is cash: first-quarter 2026 adjusted free cash flow was $657 million, and improved NGL pricing is set to add over $550 million of incremental free cash flow in 2026.
• The defining risk is the commodity itself; with liquids deliberately left unhedged, both the upside and the downside of NGL and gas prices flow straight to Antero's results.

Bull Case

The most surprising thing about Antero is that the "Appalachian gas producer" label badly understates what it is. The market tends to treat it as a price-taker on landlocked dry gas, but Antero realizes gas at a premium to the benchmark and earns outsized prices on natural-gas liquids by moving its production to premium markets. In the first quarter of 2026 it realized gas at $5.57 per Mcf before hedges, a $0.53 premium to Henry Hub, and C3+ NGL at $37.83 per barrel, a premium to the benchmark. The mechanism is firm transportation: the 10-K describes costs paid to Antero Midstream and third parties for the "low and high pressure gathering and compression systems that transport our" production to where it fetches the best price. That delivery network is the reason Antero is a liquids-and-premium-market story, not a Henry Hub story.

The cash generation is where the thesis turns concrete, and the recent quarter was a step-change. Adjusted EBITDAX rose 32% to $723 million, operating cash flow jumped 88% to $859 million, and adjusted free cash flow was $657 million. Record net production of 3.9 Bcfe per day, up 13%, drove the volumes. For a producer the market often prices on cyclical fear, generating $657 million of free cash in a single quarter is the kind of number that resets the conversation from survival to capital return.

The balance sheet is being repaired ahead of schedule, and the liquids leverage is intentional. Antero expects to hit its 1.0x leverage target by the middle of 2026, six months early, on the strength of improved NGL fundamentals. Crucially, the company leaves its liquids unhedged while hedging more than 60% of 2026 gas, a deliberate choice to capture NGL upside, and improved C3+ pricing alone is expected to add over $550 million of incremental free cash flow this year. Against an oil-and-gas cohort that includes EOG, Coterra, and Gulfport, the bull case is that Antero combines record volumes, premium realizations, and a near-complete deleveraging, with the unhedged liquids giving it leverage to a tightening NGL market.

Bear Case

The structural truth a holder would rather not face is that all of this is a commodity bet, and the very thing that powered the quarter can reverse. Antero realized a $0.53 premium to Henry Hub in part because of an unusually cold Eastern winter, a weather event, not a durable pricing edge. The premium realizations and the record free cash flow are functions of gas and NGL prices that the company does not control, and the decision to leave liquids unhedged means the downside is as open as the upside. A warm winter, a mild NGL market, or a step down in gas prices takes the $657 million quarterly free cash flow with it, and the price is paying a 16-times operating-income multiple as if the strong realizations are a run-rate.

The cost structure carries its own rigidity. Firm transportation is a competitive advantage when prices are high because it reaches premium markets, but the 10-K is clear that Antero pays fees to Antero Midstream and third parties for "gathering, compression, processing and transportation," and those commitments are largely fixed. In a low-price environment, the same transport obligations that lift realizations in good times become a fixed cost that compresses margins. The producer's economics are asymmetric: the transport network amplifies the upside and locks in cost on the downside, and a commodity downturn hits a company that still carries about $2.7 billion of net debt, roughly two times operating income.

The valuation honestly reflects a value name, not a stretched one, and that is the bear's calibration. Every family of valuation method supports or sits at the price: asset value, earnings power, and forward growth all below it, peer multiples roughly at it. There is no overvaluation gap to point at. The bear case, therefore, is not that Antero is expensive; it is that the price already credits today's strong commodity environment, the deleveraging is nearly done so the next leg has to come from prices staying high, and the unhedged liquids mean a single soft year in NGLs undoes a large share of the cash flow the price assumes. The bet is on the commodity, and the commodity is the one thing the company cannot guarantee.

Valuation

Antero's price is a value-and-asset read, not a growth bet, and the inversion confirms it. At about 16 times operating income, the price implies roughly 13.8% annual operating-income growth for five years, but it sits against a 23% operating margin and a producer generating record free cash flow, so the multiple is undemanding for the current commodity environment. The framework reads the assumption as within range. The real question is not whether Antero can grow into the price; it is whether the strong gas and NGL realizations that drive today's economics persist, because the price is already supported by every static method at current prices.

The methods agree to an unusual degree, and they all support the price rather than stretch it. The asset-value, earnings-power, and forward-growth lenses all sit below the price, meaning they value Antero's reserves and cash flow above where it trades, and the peer-multiple lens lands roughly at the price. When every family supports the price, the disagreement is not among the methods; it is between the methods, which value trailing cash flow, and the market's discount for commodity risk. There is no premium to defend here; the price is a value read on a producer the methods consider fairly to cheaply valued, with the commodity cycle the only real swing factor.

Solvency is nearly resolved and removes the tail risk. Net debt of about $2.7 billion is roughly two times trailing operating income, and Antero expects to reach its 1.0x leverage target by mid-2026, six months early. The share count has been essentially flat. With the balance sheet close to its target, the free cash flow that the strong realizations generate is increasingly available for return to shareholders rather than debt reduction, which is the value-creation lever from here. Against the oil-and-gas cohort, Antero's premium realizations and liquids exposure distinguish it, and the price reflects a fairly valued producer whose results, both up and down, will track the gas and NGL markets the company has chosen to stay exposed to.

Catalysts

The first-quarter 2026 print was a strong beat driven by volumes and pricing. Antero reported net income of $535 million, adjusted EBITDAX of $723 million up 32%, operating cash flow of $859 million up 88%, and adjusted free cash flow of $657 million, on record net production of 3.9 Bcfe per day and revenue of $1.945 billion that topped estimates. Realizations were the standout: gas at a $0.53 premium to Henry Hub on a cold Eastern winter and C3+ NGL at a premium to benchmark.

The forward financial signals were equally constructive. Antero expects to hit its 1.0x leverage target by mid-2026, six months ahead of plan, and improved C3+ NGL pricing is expected to add more than $550 million of incremental free cash flow in 2026. The company hedged over 60% of 2026 gas while leaving liquids unhedged, a positioning that maximizes exposure to the NGL upside it sees.

The forward watch items are NGL and gas pricing and the post-deleveraging capital-return plan. Because liquids are unhedged, the C3+ price path is the single most important variable for free cash flow, and the durability of the gas premium beyond the cold winter is the second. Once leverage reaches the 1.0x target, the pace and form of capital return, buybacks against the substantial free cash flow, becomes the catalyst that converts the commodity windfall into shareholder value, and it is the metric the next several quarters will be judged on.

Peer Cohorts (Per Segment, With Filing Citations)

Current liabilities (reported)

• RRC (RANGE RESOURCES CORPORATION)
• FY2025 10-K: …to source documentation. In addition, we assessed the inputs for reasonableness based on our review of corroborative evidence and consideration of any contrary evidence. Finally, we tested that the DD&A calculation is based on the appropriate proved natural gas, NGLs and oil reserve amounts from the Company's reserve…
• FY2025 10-K: …assets and liabilities approximate fair value. Our fair value assessment incorporates a variety of considerations, including (1) the short-term duration of the instruments and (2) our historical incurrence of and expected future insignificance of bad debt expense. Non-financial liabilities initially measured at fair…
• EQT (EQT Corporation)
• FY2025 10-K: …in (gain) loss on sale/exchange of long-lived assets in the Statement of Consolidated Operations. 13. Commitments and Contingencies Contractual Commitments The Company has commitments to pay demand charges under long-term contracts and binding precedent agreements with various pipelines as well as charges for…
• FY2025 10-K: …of such deposits recorded as a current asset in the Consolidated Balance Sheets. The Company has netting agreements with financial institutions and its brokers that permit net settlement of gross commodity derivative assets against gross commodity derivative liabilities. The table below summarizes the impact of…
• CTRA (COTERRA ENERGY INC.)
• FY2025 10-K: …under certain of these arrangements to pay a demand charge for firm capacity rights on pipeline systems regardless of the amount of pipeline capacity utilized by the Company. If the Company does not utilize the capacity, it can release it to others, thus reducing its potential liability. Gas Processing Commitments…
• FY2025 10-K: …allow it to offset assets and liabilities from separate derivative contracts with that counterparty. 79 Table of Contents 6. Fair Value Measurements Financial Assets and Liabilities The following fair value hierarchy table presents information about the Company's financial assets and liabilities measured at fair…
• GPOR (Gulfport Energy Corporation)
• FY2025 10-K: …other 9,282 8,727 Prepaid expenses and other current assets 7,952 7,086 Short-term derivative instruments 45,155 58,085 Total current assets 248,851 231,313 Property and equipment: Oil and natural gas properties, full-cost method Proved oil and natural gas properties 3,902,539 3,349,805 Unproved properties 232,959…
• FY2025 10-K: …previous reported total assets, total liabilities, net income (loss) or total operating cash flows. Supplemental Cash Flow and Non-Cash Information (in thousands) Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Supplemental disclosure of cash flow information: Interest payments,…
• CNX (CNX Resources Corporation)
• FY2025 10-K: 905 ) $ 1,719,928 The accompanying notes are an integral part of these financial statements. 69 CNX RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) December 31, 2025 December 31, 2024 ASSETS Current Assets: Cash and Cash Equivalents $ 779 $ 17,198 Restricted Cash 12,685 37,875…
• FY2025 10-K: …position. See Note 20 - Commitments and Contingent Liabilities in the Notes to the Audited Consolidated Financial Statements in Item 8 of this Form 10-K for further discussion of pending legal proceedings. Financing, Investment and Indebtedness Risks Our current long-term debt obligations, and the terms of the…
• EOG (EOG RESOURCES, INC.)
• FY2025 10-K: Total Lease Liabilities 1,199 117 Less: Current Portion of Lease Liabilities 472 27 Long-Term Lease Liabilities $ 727 $ 90 At December 31, 2025, EOG had additional minimum lease payments of $ 254 million, which are expected to commence beginning in 2026 with lease terms of two to seventeen years. F-40 EOG RESOURCES,…
• FY2025 10-K: …when such amounts are with the same counterparty and subject to a master netting arrangement (in millions): Fair Value at December 31, Description Location on Balance Sheet 2025 2024 Asset Derivatives NGLs and natural gas financial derivative contracts - Current portion Assets from Price Risk Management Activities $…
• SM (SM ENERGY CO)
• FY2025 10-K: …testing the completeness and accuracy of the data used by the specialists related to historical production volumes, iii) evaluating the specialists' findings related to estimated future production volumes by comparing the estimate to relevant historical and current period information, as applicable. /s/ Ernst & Young…
• FY2025 10-K: Letters of credit outstanding reduce the amount available under the revolving credit facility on a dollar-for-dollar basis. Senior Notes The Company's Senior Notes, net line item on the accompanying balance sheets as of December 31, 2025, and 2024, consisted of the following (collectively referred to as "Senior…
• MNR (Mach Natural Resources LP)
• FY2025 10-K: …rather, we sell the substantial majority of our production contracts with terms of 12 months or less, including on a month-to-month basis, to a relatively small number of customers. The loss of any one of these purchasers, the inability or failure of our significant purchasers to meet their obligations to us or their…
• FY2025 10-K: …receivable - oil, gas, and NGL sales 160,249 132,945 Short-term derivative assets 42,506 14,069 Inventories 43,511 24,301 Other current assets 18,886 6,399 Total current assets 377,952 322,096 Oil and natural gas properties, using the full cost method: Proved oil and natural gas properties 4,017,896 2,419,998 Less:…

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

Antero Q1 2026 results, 2026