Thinking about what to do with your Civitas Resources stock? You are not alone. With the shares closing at $29.48 and some dramatic price swings recently, the story is catching attention. The stock dropped a hefty 15.5% over the past week and is down 12.8% for the past month. Year to date, it is off by 38.2%, and looking back a year, the decline stretches to 42.5%. It is not all bad news, though. Over the last five years, Civitas Resources has actually delivered a solid gain of 105.0%, showing just how quickly fortunes can shift in this sector. These swings are not happening in isolation. Broader market jitters about energy demand, as well as sector-wide volatility, have weighed on companies like Civitas, even when fundamentals remain steady.
So is the recent drop a sign of trouble, or an opportunity in disguise? The answer depends in large part on whether Civitas Resources is correctly valued by the market now. According to our valuation framework, which looks at six key checks, Civitas nails every single one for a value score of 6 out of 6. In the sections that follow, I will break down each valuation approach in detail and show how Civitas stacks up, before sharing a smarter way to put valuation scores in context. Let us dive in.
Why Civitas Resources is lagging behind its peers
A Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and discounting them back to the present day. This approach provides a fundamental look at the business by focusing on how much cash it can return to shareholders over time.
For Civitas Resources, the analysis begins with its latest twelve months Free Cash Flow, which was $911.20 Million. Based on analyst estimates, this figure is expected to grow meaningfully over the next several years. By 2029, the projected Free Cash Flow reaches $1.44 Billion, with intermediate forecasts showing a steady climb each year. Beyond analyst estimates, Simply Wall St extrapolates cash flows further out, factoring in expected industry trends and company performance.
Using the 2 Stage Free Cash Flow to Equity model, Civitas Resources’ estimated intrinsic value comes out to $271.63 per share. With shares recently closing at $29.48, this implies the stock is trading at an 89.1% discount to its estimated fair value. In short, the DCF model suggests Civitas Resources appears to be deeply undervalued compared to what its cash flows are worth.
Result: UNDERVALUED
CIVI Discounted Cash Flow as at Oct 2025
Our Discounted Cash Flow (DCF) analysis suggests Civitas Resources is undervalued by 89.1%. Track this in your watchlist or portfolio, or discover more undervalued stocks.
When evaluating a profitable company like Civitas Resources, the Price-to-Earnings (PE) ratio stands out as a reliable benchmark. The PE ratio is a widely used market metric that helps investors gauge how much they are paying for each dollar of company earnings. For consistently profitable businesses, it provides a straightforward way to compare valuation across companies and industries.
Of course, what counts as a “normal” or “fair” PE ratio changes depending on factors like growth prospects and risk. Higher-growth companies generally command higher PE ratios, while those operating in riskier or more volatile markets often trade at a discount. Such differences reflect how investors weigh future earnings potential against the underlying uncertainties.
Civitas Resources is currently trading at a PE ratio of 3.61x. This is strikingly lower than the oil and gas industry average of 13.39x and also well below the average of its peers, which sits at 28.80x. At first glance, this might suggest the stock is undervalued, but simple comparisons can overlook what really drives a fair price.
This is where the Simply Wall St Fair Ratio comes into play. The Fair Ratio offers a more nuanced perspective by considering key company-specific factors like earnings growth, profit margins, market cap, and sector risks, in addition to broad industry comparisons. In Civitas Resources’ case, its Fair Ratio is calculated at 12.87x, which is much higher than the company’s current PE ratio but fine-tuned to its business fundamentals and sector outlook.
Because the Fair Ratio thoroughly accounts for the unique growth profile and risks of Civitas Resources, it offers a stronger signal than simply looking at peer or industry averages. With the company trading at 3.61x, significantly below its Fair Ratio of 12.87x, the valuation appears attractive and this further reinforces what the DCF model suggested.
Result: UNDERVALUED
NYSE:CIVI PE Ratio as at Oct 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives: a modern approach that allows you to capture your personal perspective on a company by telling the story behind the numbers. This method links your financial forecasts and assumptions directly to an estimated fair value.
Narratives offer investors a simple and intuitive way to connect what is happening in the real world to a company’s potential, turning your observations and expectations, like revenue growth, future margins, or industry shifts, into a complete financial forecast and fair value estimate, all in one package.
This tool is accessible to everyone on Simply Wall St’s Community page, where millions of investors worldwide create and share Narratives to guide smarter buy or sell decisions by comparing their chosen Fair Value against the current share price.
Best of all, Narratives update automatically whenever new developments, such as Civitas Resources’ CEO change or updated earnings, are reported. This ensures your valuation stays relevant and grounded in the latest facts.
For example, some investors may adopt an optimistic Narrative, forecasting $1.1 billion in future earnings and setting a fair value of $53 per share, while others, more cautious, might assume $407.1 million in earnings and arrive at a fair value closer to $30. This demonstrates how Narratives empower you to invest according to your own story and conviction.
Do you think there’s more to the story for Civitas Resources? Create your own Narrative to let the Community know!
NYSE:CIVI Community Fair Values as at Oct 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include CIVI.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com