Is Excelerate Energy (EE) a Contrarian Buy? A Deep Dive into Valuation and Fundamentals

The question of whether Excelerate Energy (EE) is undervalued hinges on a tension between its robust financials and a market that appears to undervalue its long-term potential. From a contrarian value investing perspective, EE presents a compelling case: its intrinsic value, as calculated by discounted cash flow (DCF) models, ranges from $30.44 to $54.11, far exceeding its current market price of $24.54–$29.73 [2][3][6]. Analysts, meanwhile, have set a consensus price target of $33.36, implying a 25.6% to 33.8% upside [1]. These metrics suggest the stock is trading at a significant discount to its estimated fair value.

The Case for Undervaluation

EE’s valuation multiples further underscore its appeal. The company’s EV/EBITDA of 5.2x and EV/Revenue of 2.1x [4] lag far behind the median multiples of its peers in the energy infrastructure sector (12.8x for renewables, 16.1x for environmental services) [6]. This discrepancy hints at a market that may be underappreciating EE’s unique assets, including its integrated LNG and power platform in Jamaica, which has boosted 2025 EBITDA guidance to $420–$440 million [5].

Moreover, EE’s balance sheet is a fortress. With a debt-to-equity ratio of 0.69 [2] and $900 million in cash reserves [5], the company is well-positioned to withstand volatility in energy markets. Its operating margin of 23.19% and free cash flow of $178.95 million over the past year [4] further reinforce its financial resilience.

Contrarian Logic and Risks

Contrarian investing thrives on dislocation between intrinsic value and market price. Here, the gap is stark: DCF models suggest EE is undervalued by 25% to 65% [2][3][6]. Yet, the stock’s year-to-date 100% rally [5] has raised concerns about overoptimism. Skeptics might argue that the market has already priced in the company’s recent successes, such as the Jamaica acquisition. However, this overlooks the long-term tailwinds of decarbonization and LNG demand in emerging markets, where EE’s infrastructure is uniquely positioned to benefit.

Risks remain, of course. Delays in infrastructure projects and political opposition to energy developments could dampen growth [5]. Yet, these are not unique to EE and are often overblown in contrarian scenarios. The company’s liquidity and strong EBITDA performance provide a margin of safety.

Conclusion: A Buy for the Long-Term

For investors with a multi-year horizon, EE’s combination of undervaluation, strong fundamentals, and sector tailwinds makes it a compelling contrarian buy. While the stock’s recent gains may deter some, the widening gap between its intrinsic value and market price suggests further upside. As the energy transition accelerates, EE’s infrastructure assets could become increasingly valuable—provided the market eventually corrects its current underappreciation.

Source:
[1] Excelerate Energy, Inc. (EE) Analyst Ratings, Estimates [https://finance.yahoo.com/quote/EE/analysis/]
[2] EE Intrinsic Value | Excelerate Energy Inc (EE) [https://valueinvesting.io/EE/valuation/intrinsic-value]
[3] Excelerate Energy, Inc. (NYSE:EE) Shares Could Be 49% ... [https://www.sahmcapital.com/news/content/excelerate-energy-inc-nyseee-shares-could-be-49-below-their-intrinsic-value-estimate-2025-05-09]
[4] Excelerate Energy (EE) Statistics & Valuation [https://stockanalysis.com/stocks/ee/statistics/]
[5] Excelerate Energy Reports Strong Second Quarter 2025 Results and Raises Full-Year Guidance [https://www.morningstar.com/news/business-wire/20250811875274/excelerate-energy-reports-strong-second-quarter-2025-results-and-raises-full-year-guidance]
[6] Calculating The Intrinsic Value Of Excelerate Energy, Inc ... [https://finance.yahoo.com/news/calculating-intrinsic-value-excelerate-energy-101512887.html]