Golar LNG (GLNG) is back in focus after confirming that all conditions for its 20 year MKII floating LNG charter with Southern Energy in Argentina are satisfied, providing clearer visibility on future cash flows and contract stability.

At a share price of US$39.60, Golar LNG’s short term share price returns in recent weeks have been positive. The 3 year total shareholder return of about 86% and 5 year total shareholder return of roughly 283% stand out despite a 1 year total shareholder return decline of about 3%. This suggests that recent momentum contrasts with a softer medium term experience for shareholders.

If Golar’s contract news has you thinking about LNG infrastructure opportunities, it could also be a good moment to broaden your search with fast growing stocks with high insider ownership.

With Golar LNG trading at US$39.60 and analysts publishing higher price targets, plus solid long term shareholder returns, it raises the key question for you: is there still mispricing here or is the market already baking in future growth?

Most Popular Narrative: 22.5% Undervalued

Against Golar LNG’s last close of US$39.60, the most followed narrative points to a fair value of US$51.10, framing the current debate around how much future growth is already reflected in the price.

The company has secured long-term (20-year) charters for its existing FLNG units, providing $17 billion in contracted EBITDA backlog and 20 years of cash flow visibility, which is expected to drive a significant (4x) increase in EBITDA and contracted free cash flow by 2028, indicating the market may be undervaluing its forward earnings stability and revenue growth.

Curious how a capital intensive LNG business can justify a rich future earnings multiple? The narrative leans heavily on margin expansion and compounded revenue growth assumptions. Want to see exactly how those forecasts stack up to a 7.0% discount rate and a premium P/E outlook? The full story sits inside that fair value calculation.

Result: Fair Value of $51.10 (UNDERVALUED)

However, this hinges on LNG demand and high charter rates holding up. Execution missteps on new FLNG projects or cost overruns could quickly challenge that upbeat scenario.

Another View: Rich P/E Puts Pressure On The Bull Case

Those growth heavy narratives sit alongside a much less forgiving read from the P/E ratio. Golar trades on about 67.8x earnings, compared with a fair ratio estimate of 18.9x, a US Oil and Gas industry average of 13.7x and a peer average of 30.2x. That kind of gap can point to valuation risk if expectations slip even slightly. The real question is whether you think the earnings story is strong enough to keep that premium intact.

Build Your Own Golar LNG Narrative

If you look at the numbers and reach a different conclusion, or simply prefer to test your own assumptions, you can build a complete Golar LNG narrative yourself in just a few minutes, starting with Do it your way.

A great starting point for your Golar LNG research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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.