EQT currently trades at $60.43 and has been a dream stock for shareholders. It’s returned 252% since April 2021, blowing past the S&P 500’s 60.2% gain. The company has also beaten the index over the past six months as its stock price is up 10% thanks to its solid quarterly results.
Following the strength, is EQT a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.
Why Are We Positive On EQT?
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 sectors like Energy often flatter weaker operators during favorable price environments, but a longer-term lens separates those from businesses that can consistently perform across market cycles. Thankfully, EQT’s 16.4% annualized revenue growth over the last five years was impressive. Its growth beat the average energy upstream and integrated energy company and shows its offerings resonate with customers.
2. EBITDA Margin Rising, Profits Up
Adjusted EBITDA margin captures the true operating profitability of an energy producer by removing accounting noise around depletion and capitalized drilling costs. It reveals how much cash the asset base generates before capital structure and reinvestment requirements shape reported earnings.
Analyzing the trend in its profitability, EQT’s EBITDA margin rose by 22.9 percentage points over the last year, as its sales growth gave it immense operating leverage. Its EBITDA margin for the trailing 12 months was 72.7%.
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 24% over the last five years.
Final Judgment
These are just a few reasons why EQT ranks highly on our list, and with its shares beating the market recently, the stock trades at 13× forward P/E (or $60.43 per share). Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
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