Crescent Energy Company (CRGY): what the price requires

The current priced-in claim for Crescent Energy Company (CRGY) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

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

Headline

FieldValue
TickerCRGY
CompanyCrescent Energy Company
Current price$10.02/sh

What The Price Requires (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin needed4.1%
Operating margin today15.7%
Margin compression implied-11.6pp
Multiple paid16x operating income

The operating-margin requirement is derived from the framework's value band at year 9, a separately labeled basis from the headline growth/duration solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 6.3% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~9.6%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.35σ
cohort percentile (of 45 peers)49
implied end-window share0%

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.

FamilyMedian price/FVModelsReads
Asset0.53x4justifies
Earnings0.30x3justifies
Relative0.72x3justifies
Growth0.91x3justifies

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 4.5%); the inversion above states its own rate.

Per-Model Detail (n=13)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
DCF Exit MultipleGrowth$47.620.21xyesExit EV/EBITDA: 4.0x / 5.3x / 10.3x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$13.850.72xyesP/S fallback (negative EPS): Sector P/S 1.2x × TTM revenue — excluded from consensus
Simple DDMGrowth——no—
Two-Stage DDMGrowth$9.151.09xyesStage 1: 5% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$17.820.56xyesBV/sh $14.17, ROE (TTM) 11.6%, ke 9.3%
Two-Stage Excess ReturnAsset$19.880.50xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$11.060.91xyesRev $3.8B, growth 19% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.9x / 1.0x (bear / base = today's held flat / bull, cap 6x)
Peter Lynch Fair ValueRelative$0.00—noNegative/zero EPS — earnings-based value floored at $0
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$16.100.62xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.61B × (1−21%) / WACC 4.5% → EPV (no growth)
Residual IncomeAsset$20.290.49xyesBV $14.17 + 5yr PV of (ROE (TTM) 11.6% − Kₑ 9.3%) × BV; BV grows 7.6%/yr
Graham NumberAsset——no—
EV/EBITDA RelativeRelative$13.660.73xyesEBITDA $1.62B × sector EV/EBITDA 6.0x
FCF YieldEarnings$41.530.24xyesFCF $1752.2M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$33.450.30xyesSBC-adj FCF $1.51B (FCF $1.75B − SBC $0.25B) capitalized at Kₑ
Ben Graham FormulaEarnings——no—
ROIC-Justified P/BAsset$8.141.23xyesBV $14.17 × (ROIC 2.6% / WACC 4.5%)
P/Sales SectorRelative$13.850.72xyesRevenue $3.81B × sector P/S 1.2x
PEG Fair ValueRelative——no—
Earnings YieldEarnings——no—
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$5.2b
Net debt / NOPAT (after-tax)10.86x
Net debt / operating income (pre-tax)8.58x
Interest coverage1.9x
Burning cashno

Bullet Takeaways

Bull Case

Lead with the thing the bears point at first, because it is also where the bull case lives. Crescent grew by borrowing and buying, and it carries the debt to prove it, more than $5 billion of it. The question is whether that debt bought assets worth more than it cost, and the recent operating record argues that it did. In the first quarter of 2026 the company produced a record 341,000 barrels of oil equivalent per day and generated roughly $690 million of adjusted EBITDA and about $192 million of levered free cash flow. The Vital Energy merger that expanded it into the Permian has already exceeded its initial synergy target, with $120 million realized to date. A roll-up that integrates well turns leverage from a liability into a lever.

The valuation case is the cleanest part of the story. Every method we use to value the business says the price is below what the assets and the cash flow support. The earnings-power and cash-flow methods are the most striking, landing well above today's price because the company is throwing off cash. Management reaffirmed roughly $1 billion of levered free cash flow for 2026, against a market value that is a fraction of the multiple a steadier business would command. When a company generates that much cash relative to its price, the cash has somewhere to go: debt paydown, the dividend, or more accretive deals.

The asset base is the foundation under all of it. Crescent is now a scaled operator across three premier basins, with well costs in the Uinta down roughly 20% year over year, evidence the operating side is getting more efficient, not just bigger. The company describes its strategy plainly in its own filings, intending to "pursue" accretive acquisitions while acknowledging it "may be unable to make attractive acquisitions or successfully integrate acquired businesses." The bull case is that the team has done it repeatedly, the assets generate real cash, and the price pays for far less than the company has demonstrated it can produce.

Bear Case

The bear case is structural and it lives on the balance sheet. Crescent carries more than $5 billion of debt, and the interest on that debt is covered only a little more than once over by trailing operating profit. That is a thin cushion. An energy producer's operating profit moves with the commodity price, and the company says so directly: lower oil, natural gas and NGL prices "also may reduce the amount of oil, natural gas and NGL that can be produced economically." So the structure is a fixed claim, the debt, sitting on top of a variable cash flow, the commodity. When prices fall, the cash flow shrinks while the debt does not, and the gap between coverage of barely one times and distress is smaller than it looks in a good year.

The company manages this exactly the way the textbook says to, which is itself the tell. It "regularly enter[s] into commodi[ty]" derivative contracts to "reduce the impact of fluctuations in oil, natural gas and NGLs prices on our cash flows." Hedging smooths the near term, but hedges roll off, and a producer that has to hedge to keep coverage comfortable is telling you the underlying business cannot absorb a sustained downturn on its own. The macro variable with the most leverage on this thesis is the oil price, and the current valuation does not appear to price a multi-year slide.

The acquisition model is the second structural risk, because it is the source of both the growth and the leverage. The company intends to keep buying, and it concedes in its own risk language that it "may be unable to make attractive acquisitions or successfully integrate acquired businesses, assets or properties, and any inability to do so may disrupt our business and hinder our ability to grow." A roll-up has to keep finding accretive deals to keep the story going, and each deal adds integration risk and, usually, more debt. The price is cheap on every backward-looking method, and the bear case is that it is cheap for a reason the methods do not capture: a levered, commodity-exposed, acquisition-dependent structure that the market discounts on purpose. The company reports a far gentler leverage figure than the raw GAAP math implies, near 1.7x on its consolidated EBITDA basis at quarter-end, but that figure rests on the EBITDA holding up, and EBITDA is the thing that moves with the price.

Valuation

The price is doing something unusual for an energy name: it sits below what even a declining business would warrant. Read backward, today's level pays roughly 16 times company-wide operating income, low enough that the price assumes operating profit shrinks from here, more than a modest 5%-per-year decline would justify. That is a bound, not a forecast, and the way to read it is that the market is pricing pessimism, not growth. The near-term pace the company has actually delivered is not the stretch; the question the price seems to be asking is how long the cash flow lasts, not whether it exists.

The methods we use to triangulate agree the price is supported, which is the opposite of a stretched-multiple name. The asset-value methods, anchored on book value plus profitability, land above the price. The earnings-power and cash-flow methods land well above it, because the company converts a large share of its revenue into free cash flow. The relative-multiple methods, comparing against the energy sector, also land above today's price. When asset value, earnings power, peer multiples, and the growth view all sit above the price, this is a value read, not an optionality bet. The whole spread points the same direction: cheap relative to what the business produces.

What keeps it from being a simple bargain is solvency, and this is where the value case earns its discount. The company carries more than $5 billion of net debt, and trailing operating profit covers the interest only about 1.2 times. The company's own consolidated leverage figure is far gentler, near 1.7x at the end of Q1 2026, because that figure measures debt against cash earnings before the heavy depletion charges an oil producer books, and roughly $1 billion of reaffirmed levered free cash flow in 2026 is the cash that services and reduces the debt. The downside is bounded not by net cash, there is none, but by the cash the assets generate while prices hold. The price is low because that cash is variable, and the multiple is the market's way of charging for the leverage on top of it.

Catalysts

The most direct catalyst is the cadence of free cash flow and debt reduction. Crescent reaffirmed roughly $1 billion of levered free cash flow for 2026 on production guidance of 320 to 335 thousand barrels of oil equivalent per day and development capital of $1.325 to $1.425 billion. Each quarter that converts that cash and uses it to bring leverage down is a step that de-risks the equity, and the company is targeting a year-end leverage ratio at or below 1.5x for its minerals and royalties segment. The $0.12 quarterly dividend continues the company's return-of-capital posture alongside the deleveraging.

The merger integration is the second thing to watch. The Vital Energy combination that pushed Crescent into the Permian has already exceeded its initial synergy target, with $120 million realized to date and management citing further operational upside. Synergy capture running ahead of plan is the clearest evidence that the acquisition model is working; a stall would be the first sign it is not. Well-cost improvement in the Uinta, down roughly 20% year over year, is the operational tailwind underneath the synergy story.

The overhang is the commodity, and it is not in the company's control. The entire thesis runs on oil and gas prices holding well enough to sustain the cash flow that services the debt and funds the dividend. Analysts rate the stock a Buy with a twelve-month price target near $17.50, a level that credits the deleveraging path continuing. The next earnings print is the cleanest test of whether free cash flow conversion and synergy capture are tracking the reaffirmed full-year guidance.

Peer Cohorts (Per Segment, With Filing Citations)

Oil and Gas (single reportable segment) (reported)

Methodology Note

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

Crescent Energy 2026 outlook · Crescent Energy Q1 2026 results · CRGY FY2025 10-K, accession 0001866175-26-000026 · CRGY solvency, latest filings · analyst consensus, 2026

View the full interactive CRGY report on boothcheck