We think it’s a good time to analyze CNX Resources Corporation (NYSE:CNX) As it seems, the company may be on the verge of a huge achievement. CNX Resources Corporation, an independent oil and gas company, acquires, explores, develops and produces natural gas properties primarily in the Appalachian Basin. The $3.0 billion market cap company announced a final loss of $499 million on December 31, 2021 for its most recent financial year. As the path to profitability is what CNX Resources investors are concerned about, we decided to gauge market sentiment. In this article, we’ll discuss the company’s growth expectations and when analysts expect it to become profitable.
CNX Resources near balance, according to 8 US oil and gas analysts. They predict that the business will incur a terminal loss in 2021, before generating positive profits of US$388 million in 2022. So the business should break even in about a year or less! How fast will the business need to grow to achieve the consensus estimates predicting breakeven in less than 12 months? Using a line of best fit, we calculated an average annual growth rate of 52%, which signals high confidence from analysts. If the business grows at a slower pace, it will become profitable later than expected.
Since this is a high-level preview, we won’t go into detail about CNX Resources’ upcoming projects, however, keep in mind that in general, an energy company has flows irregular cash flows that depend on the natural resource and the stage at which the business is operating. This means that the significant growth rates ahead are not abnormal as the company begins to reap the benefits of past investments.
One thing we would like to highlight with CNX Resources is its relatively high level of leverage. Generally, the rule of thumb is that debt should not exceed 40% of your equity, which in the case of CNX Resources is 60%. Note that higher debt increases the risk of investing in the loss-making business.
There are too many aspects of CNX Resources to cover in a brief article, but the fundamentals of the business can all be found in one place – CNX Resources company page on Simply Wall St. We have also compiled a list of relevant aspects that you should investigate further:
- Evaluation: What is CNX Resources worth today? Has future growth potential already been factored into the price? the intrinsic value infographic in our free research report allows you to see if CNX Resources is currently undervalued by the market.
- Management team: An experienced management team at the helm boosts our confidence in the business – take a look at who sits on the CNX Resources board and CEO experience.
- Other High Performing Stocks: Are there other stocks that offer better prospects with a proven track record? Discover our free list of these great stocks here.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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