EQT Corp's (EQT, Financial) stock experienced a rise of 0.86% recently, reflecting a positive sentiment towards its strong performance in profitability, surpassing the modest gains of the S&P 500. The positive trend was largely driven by the company's latest earnings report, which showcased better-than-expected net income figures.
In its fourth-quarter earnings report, EQT disclosed a revenue of $1.62 billion, marking a 20% year-over-year decline. Despite this, the company managed to exceed analyst expectations, reporting GAAP net income of $418 million, a 17% drop, yet still achieving $0.69 per diluted share compared to the anticipated $0.50 per share.
The company's operational efficiency was evident as its sales volume increased by 7% to 605 billion cubic feet of natural gas equivalent (Bcfe), and the average realized selling price rose by 8% to $3.01 per thousand cubic feet equivalent. This combination led to a 20% improvement in sales of natural gas, natural gas liquids, and oil, totaling $1.64 billion. However, the gains were slightly offset by a $183 million loss in derivatives, sharply contrasting a $672 million gain from the same period last year.
EQT has adjusted its production guidance, raising its 2025 target by 125 Bcfe, setting a new forecasted production range of 2,175 Bcfe to 2,275 Bcfe. The company is also focused on financial growth, anticipating free cash flows of $2.6 billion this year and $3.3 billion in 2026.
From a valuation perspective, EQT's stock appears to be significantly overvalued according to its GF Value of $18.79, well below the current trading price of $54.24. The stock's price-to-earnings (P/E) ratio stands at 135.6, a level near its five-year high, indicating potential overvaluation. Additionally, its price-to-book (P/B) ratio of 1.59 hints at a valuation above the company's book value. While the GF Value suggests a cautionary stance, the company's strategic production plans and potential free cash flow generation could support future growth.
EQT's medium-term financial health shows certain vulnerabilities, notably highlighted by a distressing Altman Z-Score of 1.21, implying a potential risk of financial distress. Moreover, the Piotroski F-Score of 3 suggests weaker business operations, and the Beneish M-Score indicates possible financial manipulation. However, EQT's strategic focus on enhancing production and profitability, coupled with a favorable industry environment, may provide the necessary momentum for improvement.
