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    Is Vermilion Energy (TSX:VET) Undervalued After Record Production And Higher Guidance?

    Simply Wall St·09/09/2026 11:21:18
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    Why Vermilion Energy Is Back on Investor Radar

    Vermilion Energy (TSX:VET) is drawing fresh attention after reporting record output from its Mica Montney asset, first production at its Wisselshorst project in Germany, and higher full year production guidance.

    Recent price action backs up the renewed interest in Vermilion Energy. The share price is CA$17.96 after an 18.47% 30 day share price return and a 53.37% year to date share price return. The 1 year total shareholder return of 82.91% contrasts with a slightly negative 3 year total shareholder return and a strong 5 year total shareholder return of 120.18%. This suggests momentum has picked up again after a tougher multi year stretch.

    Scan beyond Vermilion Energy and size up other free cash flow focused producers with our curated list of 12 high quality undervalued stocks.

    Vermilion Energy now trades at a discount to both analyst targets and an intrinsic value estimate, even after this sharp run. Is that a genuine mispricing, or the market pricing in real risks?

    Most Popular Narrative: 9.8% Undervalued

    Against Vermilion Energy's last close at CA$17.96, the most followed narrative pegs fair value at CA$19.91, using a 6.4% discount rate and a detailed cash flow build.

    Vermilion's capital program includes significant investments in new growth projects in Germany, Croatia, and the B.C. Montney, expected to contribute strong free cash flow in future years, positively impacting revenue. Vermilion's discovery and development of German deep gas exploration wells, particularly with successful wells like Wisselshorst, are expected to more than double current European 2P gas reserves. This could significantly boost revenue and increase earnings over the coming years through higher production and premium European gas prices.

    Read the complete narrative.

    Want to see what kind of revenue curve and margin profile would support that valuation for Vermilion Energy? The narrative leans on a specific growth rate, a sharp swing in profitability, and a future earnings multiple that looks very different to where the stock trades today.

    Result: Fair Value of CA$19.91 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    Still, the narrative around Vermilion Energy can shift quickly if high net debt restricts flexibility or if large projects deliver weaker returns than analysts expect.

    Find out about the key risks to this Vermilion Energy narrative.

    Next Steps

    Mixed messages around Vermilion Energy's outlook and risk profile make this a stock you need to assess for yourself. Take a closer look at the balance of possible upsides and potential downsides in the 3 key rewards and 2 important warning signs.

    Looking For More Investment Ideas Beyond Vermilion Energy?

    If you want context around Vermilion Energy, compare it with other opportunities using structured screeners that surface clear financial traits, not hype or headlines.

    Skip the guesswork and scan targeted shortlists that highlight resilient balance sheets, underappreciated value, and quieter opportunities with solid fundamentals.

    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.