Over the past six months, EQT’s shares (currently trading at $51.47) have posted a disappointing 5.3% loss, well below the S&P 500’s 12.4% gain. This might have investors contemplating their next move.
Following the drawdown, is now the time to buy EQT? Find out in our full research report, it’s free.
Why Is EQT a Good Business?
The largest natural gas producer in the United States by daily volume, EQT (NYSE: EQT) produces natural gas and natural gas liquids from wells drilled in the Appalachian Basin.
1. Skyrocketing Revenue Shows Strong Momentum
Cyclical industries such as Energy can make mediocre companies look great for a time, but a long-term view reveals which businesses can actually withstand and adapt to changing conditions. Over the last five years, EQT grew its sales at an impressive 18.4% compounded annual growth rate. Its growth surpassed the average energy upstream and integrated energy company and shows its offerings resonate with customers.
2. EBITDA Margin Rising, Profits Up
Adjusted EBITDA margin strips out accounting distortions tied to depletion and historical drilling spend, providing a clearer view of the cash-generating power of the underlying asset base before financing and reinvestment decisions.
Analyzing the trend in its profitability, EQT’s EBITDA margin rose by 27 percentage points over the last year, as its sales growth gave it immense operating leverage. Its EBITDA margin for the trailing 12 months was 79.3%.
3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
EQT has shown terrific cash profitability, driven by its lucrative business model that enables it to reinvest, return capital to investors, and stay ahead of the competition. The company’s free cash flow margin was among the best in the energy upstream and integrated energy sector, averaging 29.6% over the last five years.
Final Judgment
These are just a few reasons why EQT ranks highly on our list. After the recent drawdown, the stock trades at 12.6× forward P/E (or $51.47 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More Than EQT
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