Golar LNG Limited (GLNG): what the price assumes

Generated: 2026-07-25 · Source: https://boothcheck.com/report/GLNG

Headline

Field	Value
Ticker	GLNG
Company	Golar LNG Limited
Current price	$48.52/sh
Composition	Liquefaction services revenue 58% / Sales-type lease revenue 23% / Vessel management fees and other revenues 19% / Time and voyage charter revenues 0%

What The Price Assumes (Inversion)

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

Field	Value
Inversion basis	whole-company
Must persist for	6.9y
Multiple paid	68x operating income

Solve inputs: computed at a 7% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.6 years (computed at the 7% minimum rate; the CAPM rate 6.1% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~12.1 years; the models below use their own rates.

How unusual the bet is: elevated

Reference	Value
vs own history	-0.23σ
sustained it ~6.9 years at this level	22%
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	7.49x	5	expensive
Earnings	3.50x	3	expensive
Relative	2.35x	4	expensive
Growth	1.19x	1	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 6.2%); the inversion above states its own rate.

Per-Model Detail (n=13)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$0.00	—	no	Negative/zero FCF — equity value floored at $0
DCF Exit Multiple	Growth	$0.00	—	no	Negative/zero FCF or EBITDA — equity value floored at $0
Relative Valuation	Relative	$20.36	2.38x	yes	P/E 38.27x (blended: static sector reference 20x + trailing (TTM) 81x), scenarios: 31.5x / 38.3x / 45.0x (bear / base = reference held flat / bull), EV/EBITDA 23.65x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$6.48	7.49x	yes	BV/sh $16.83, ROE (TTM) 3.6%, ke 9.3%
Two-Stage Excess Return	Asset	$4.02	12.07x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$40.88	1.19x	yes	Rev $0.4B, growth 13% (input: historical growth; tapered), Terminal P/S: 9.9x / 12.0x / 14.1x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair Value	Relative	$20.99	2.31x	yes	EPS $0.60, growth 35% (input: historical EPS growth), PEG=2.31 (Overvalued)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$13.86	3.50x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $0.22B × (1−4%) / WACC 6.2% → EPV (no growth)
Residual Income	Asset	$3.03	16.01x	yes	BV $16.83 + 5yr PV of (ROE (TTM) 3.6% − Kₑ 9.3%) × BV; BV grows 2.3%/yr
Graham Number	Asset	$15.07	3.22x	yes	√(22.5 × EPS $0.60 × BVPS $16.83) — Graham's conservative floor
EV/EBITDA Relative	Relative	$0.20	242.60x	yes	EBITDA $0.15B × sector EV/EBITDA 13.0x (excluded from median)
FCF Yield	Earnings	—	—	no	—
SBC-Adj FCF Yield	Earnings	—	—	no	—
Ben Graham Formula	Earnings	$19.35	2.51x	yes	EPS $0.60 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$6.89	7.04x	yes	BV $16.83 × (ROIC 2.6% / WACC 6.2%)
P/Sales Sector	Relative	$7.19	6.75x	yes	Revenue $0.39B × sector P/S 2.0x
PEG Fair Value	Relative	$22.49	2.16x	yes	EPS $0.60 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings Yield	Earnings	$6.48	7.49x	yes	EPS $0.60 / 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	$1.9b
Net debt / NOPAT (after-tax)	19.86x
Net debt / operating income (pre-tax)	19.13x
Interest coverage	3.0x
Share count CAGR (dilution)	0.0%
Burning cash	no

Bullet Takeaways

Golar's balance sheet tells the story of a company in transition: roughly $1.06 billion of cash, a maintained dividend, and a third floating-LNG unit under construction on time and on budget. Management is building, and it has the cash to do it.

At $49.61 the price implies operating growth held near its self-funding ceiling for about seven years, roughly 69 times current operating income. Only the growth-DCF lens reaches the price; asset, earnings-power, and peer-multiple lenses all say it is rich.

The gap is timing. Current operating income is modest because the fleet is mid-ramp, but management projects a fully-delivered annual EBITDA run rate above $800 million once all three units are live. The bet is that the contracted, long-dated FLNG cash flows arrive as planned.

Bull Case

The clearest read on Golar LNG is its balance sheet, because it reveals a company funding a transformation from a position of strength rather than stretching for it. Golar ended Q1 2026 with about $1.06 billion of cash and restricted cash, maintained a $0.25 per-share dividend, and has its next floating-LNG unit, the MKII, under construction on time and on budget, with the company targeting an order for a fourth FLNG within 2026. A business that can simultaneously pay a dividend, build a new production unit, and plan the one after it is signaling confidence in contracted, visible future cash flows. This is not a speculative builder; it is an operator converting a strong cash position into long-dated, fee-based LNG infrastructure.

The operating inflection is already underway. Q1 2026 net income surged to $101.8 million from $12.9 million a year earlier, and adjusted EBITDA more than doubled to $105.6 million from $40.9 million, on revenue of $138 million that beat expectations. The driver is FLNG Gimi, which began its 20-year lease in mid-2025 and generated $49.98 million of sales-type lease revenue in the quarter while overproducing 19% above its contractual committed volume. FLNG Hilli achieved 100% economic uptime. Golar's revenue mix, 58% liquefaction services, 23% sales-type lease, and 19% vessel management and other, reflects a portfolio shifting toward long-term, contracted liquefaction economics with a 57.5% trailing operating margin, the signature of a high-utilization infrastructure asset.

The forward economics are what the price is paying for, and management has put a number on them. Golar projects a fully-delivered annual EBITDA run rate exceeding $800 million once all three FLNG units are operational, a step-change from the current trailing level. Floating LNG is a scarce, capital-intensive capability: converting stranded gas into liquefied product on a vessel under 20-year contracts is a moat that few competitors can replicate, and the contracts insulate the cash flows from spot-market swings. Against the marine-shipping peer set of Teekay Tankers, Global Ship Lease, Frontline, Navios, and Navigator, Golar is the differentiated FLNG specialist whose contracted backlog and ramping fleet support the durable compounding the price assumes. The implied seven-year runway is demanding, but it is underwritten by signed, long-dated contracts rather than hope.

Bear Case

The bear case starts with the macro and commodity variables that sit beneath every LNG cash flow and that Golar cannot control. Floating LNG economics depend on global gas demand, the spread between gas-producing regions and consuming ones, and the long-run willingness of counterparties to pay for liquefaction. A shift in energy policy, a faster-than-expected energy transition away from gas, a collapse in global LNG prices, or a recession that softens industrial demand would all pressure the value of contracted and uncontracted capacity alike. The price embeds roughly seven years of growth at the self-funding ceiling, and history says only about 22% of comparable fast-growers sustain that pace for that long. A business priced for durable compounding in a commodity-exposed industry has little room for the macro to turn.

The second problem is that the current economics do not yet support the price, and the gap rests on execution. At about 69 times trailing operating income, the valuation is extreme, and only the growth-DCF lens reaches the price. Every grounded method says rich: simple excess return lands near $6, two-stage excess return near $4, residual income near $3, relative valuation near $7, all far below the $49.61 quote. The entire valuation depends on the projected $800 million-plus run-rate EBITDA materializing as the fleet fully delivers. That requires the MKII to finish on time and on budget, the units to maintain high uptime, and the counterparties to honor 20-year contracts, a long chain of execution where any broken link repriced the stock against a backdrop where the static methods already consider it wildly overvalued.

The third issue is concentration, counterparty, and balance-sheet risk. Golar's cash flows are concentrated in a small number of large, long-dated FLNG contracts, so the failure, renegotiation, or default of a single counterparty would be material. The company carries net debt of roughly $1.9 billion, net debt to operating income around 2.7 times, taken on to fund a capital-intensive newbuild program, and ordering a fourth FLNG would add to that. Interest coverage is comfortable at about 13 times today, but it leans on the ramping cash flows continuing to arrive. Floating LNG is also operationally complex: these are one-of-a-kind assets where mechanical downtime, weather, or technical failure directly cuts revenue. The balance sheet is a genuine strength, but it does not change the core tension: the price assumes seven years of ceiling-rate growth in a commodity-exposed, concentrated, capital-heavy business, and the cash-flow methods say the present operation is worth a fraction of the quote. The bet is that the contracted backlog converts to cash exactly as planned.

Valuation

The inversion frames an aggressive bet that rests on a coming ramp. At $49.61 the market is paying about 69 times company-wide operating income, which at a 7% cost of capital implies operating growth held near the 25% self-funding ceiling for roughly seven years. Each percentage point of assumed growth moves that implied horizon by about 2.6 years. The priced-in assumption reads as elevated: the near-term pace is within what Golar has recently delivered as Gimi ramped, but only about 22% of comparable fast-growers have sustained it for seven years, so the stretch is in the duration.

The model X-ray shows the signature of an infrastructure asset priced on its future, not its trailing trough. Only the growth-DCF family reaches the price, with the discounted-future-market-cap frame landing near $41, close to the quote. Every other family says rich: asset-based frames near $3 to $7 (residual income near $3, two-stage excess return near $4, simple excess return near $6), the earnings-power frame near $14, and the relative frames scattered (relative valuation near $7). The blended cross-method anchor sits near $6, a small fraction of the price, precisely because the methods read the mid-ramp trailing operating income rather than the contracted run-rate. This is the classic mismatch of a company whose earnings are about to step up as new units come online.

The balance sheet supports the build and is a genuine strength. Golar holds about $1.06 billion of cash against net debt of roughly $1.9 billion, with interest covered around 13 times, comfortable for an infrastructure operator with long-dated contracts. The recent results, net income up to $101.8 million, adjusted EBITDA up to $105.6 million, Gimi overproducing 19% above committed volume, and Hilli at 100% economic uptime, are real and material, and management's projected fully-delivered EBITDA run rate above $800 million is the number the price is underwriting. The reasonable conclusion is that Golar is a differentiated, contract-backed FLNG operator whose price already capitalizes the full delivery of its fleet and seven years of subsequent growth. The contracted backlog gives the bet real footing; the price has already paid for the ramp to complete and the contracts to perform.

Catalysts

The Q1 2026 report on May 20 was the most recent catalyst and a strong one. Net income surged to $101.8 million from $12.9 million a year earlier, adjusted EBITDA more than doubled to $105.6 million from $40.9 million, and revenue of $138 million beat the roughly $128 million forecast. FLNG Gimi, on its 20-year lease since mid-2025, generated $49.98 million of sales-type lease revenue and overproduced 19% above committed volume, while FLNG Hilli held 100% economic uptime. Golar affirmed a $0.25 per-share dividend and ended the quarter with $1.06 billion of cash. (Sources: StockTitan 6-K summary; GlobeNewswire interim results; Investing.com earnings call.)

The fleet expansion is the catalyst that governs the thesis. MKII construction is on time and on budget, and the company targets an order for a fourth FLNG within 2026. Management projects a fully-delivered annual EBITDA run rate exceeding $800 million once all three units are operational, the number the valuation is underwriting. The signals to watch are MKII delivery progress, uptime and overproduction across the operating units, the timing and terms of any fourth-FLNG order, and contract execution by counterparties. Because the price assumes the ramp completes and growth continues for years, evidence that the units are delivering and the run-rate is building would support the thesis, while any construction delay or contract disruption would expose the gap between the trailing economics and the price. (Sources: Baird Maritime; Simply Wall St; GlobeNewswire.)

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• FLNG (FLEX LNG Ltd.)
• (no filing in the citation store)
• NVGS (NAVIGATOR HOLDINGS LTD.)
• (no filing in the citation store)
• LPG (DORIAN LPG LTD.)
• (no filing in the citation store)
• SFL (SFL Corporation Ltd.)
• (no filing in the citation store)
• DAC (DANAOS CORPORATION)
• (no filing in the citation store)
• GSL (Global Ship Lease, Inc.)
• (no filing in the citation store)
• CMRE (COSTAMARE INC.)
• (no filing in the citation store)
• INSW (International Seaways, Inc.)
• (no filing in the citation store)

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.