Antero Midstream Corp scores 75 for management and 66 for moat. The management score rests on a return on invested capital of 8.2% and a gross margin of 65.3% — figures that describe a business earning a respectable return on what it employs. Debt sits at 1.63x equity.
The valuation runs on assumptions chosen to understate rather than flatter. Growth is modelled at 5.3% a year, the rate measured from the filings. The exit multiple assumed is 10.7x. That produces an intrinsic value of $3.72, a 10-CAP price of $19.88 and a payback time price of $20.22, with the value zone set at the highest of the three, $20.22. Today's price of $20.26 sits 0% above it.
The operating figures describe a business performing at a high level; the price asks for that performance to continue and then some. A margin of safety score of 9 is the measure of how little room that leaves for being wrong.
| Price | $20.26 |
| Market cap | $9.6B |
| P/E ratio | 24.1x |
| Return on invested capital | 8.2% |
| Gross margin | 65.3% |
| Debt to equity | 1.63x |
| Free cash flow yield | 9.1% |
| Growth rate used | 5.3% |
| Growth rate measured | 5.0% |
| Exit multiple assumed | 10.7x |
| Company | Moat | Buy price |
| Viper Energy Inc-Cl A (VNOM) | 54 | $47.84 |
| ONEOK (OKE) | 74 | $96.95 |
| Targa Resources (TRGP) | 49 | $157.50 |
| Kinder Morgan (KMI) | 52 | $24.34 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Antero Midstream Corp rather than accepting ours.