Company Overview
Coterra Energy Inc. operates as an independent oil and gas company dedicated to the exploration, development, and production of oil, natural gas, and natural gas liquids within the United States. The corporation functions within the Energy sector and specifically targets the Oil & Gas E&P industry, a domain characterized by significant capital intensity and reliance on commodity price cycles. As a substantial market participant, the company maintains a market capitalization of $27.57B and generates an annual revenue of $6.99B based on trailing twelve-month data. With a workforce comprising 1075 employees, Coterra Energy Inc. demonstrates a scale that places it among the larger entities in the upstream energy landscape, suggesting a robust operational footprint capable of withstanding market fluctuations while executing large-scale production strategies in key basins like the Permian Basin.
Financial Health
The company reports a trailing twelve-month revenue of $6.99B, supported by a net income of $1.72B and an EBITDA of $4.83B. The substantial gap between the $6.99B revenue and the $1.72B net income reveals a significant cost structure involving high operating expenses, depreciation, depletion, and amortization typical of the exploration and production sector. Coterra Energy Inc. generates $1.22B in free cash flow, which provides the entity with considerable financial flexibility to fund capital expenditures, service debt obligations, or return capital to shareholders without requiring external financing. Profitability analysis shows a gross margin of 74.1%, indicating efficient conversion of sales into gross profit before operating expenses; an operating margin of 33.3% reflects the company's ability to control overhead costs effectively; and a profit margin of 24.6% confirms strong bottom-line performance relative to total sales. Regarding liquidity and leverage, the company holds $114.00M in cash against $4.01B in total debt, resulting in a debt-to-equity ratio of 26.98, which indicates a leveraged balance sheet reliant on debt financing rather than a conservative, cash-rich stance. Short-term liquidity is assessed via a current ratio of 1.19, suggesting the company maintains slightly more current assets than current liabilities to meet immediate obligations. Return metrics further illustrate management effectiveness, with a return on equity of 12.3% and a return on assets of 6.7%, showing that the firm generates moderate returns on its equity base and asset utilization.
Valuation Assessment
Valuation metrics indicate a trailing P/E ratio of 16.21 compared to a forward P/E of 12.56, implying that the market expects earnings growth in the future as the forward multiple is lower than the trailing multiple. The price-to-book ratio stands at 1.86, indicating that the market values the company at a premium of 86% over its book value, reflecting confidence in its asset quality and future cash flow potential. Alternative valuation perspectives include a price-to-sales ratio of 3.94 and an EV/EBITDA of 6.51, suggesting the company trades at a moderate multiple relative to its sales and earnings power before interest, taxes, depreciation, and amortization. Price action over the past year shows a 52-week high of $36.60 and a 52-week low of $22.33, with the current trading price situated below the recent highs but above the recent lows. The stock exhibits a beta of 0.35, which signifies that the share price is less volatile than the broader market and moves with lower sensitivity to general market fluctuations.
Growth & Income
Coterra Energy Inc. demonstrates momentum with revenue growth of 23.4% year-over-year and earnings growth of 20.6% year-over-year, indicating that earnings are expanding at a rate slightly slower than revenue, which often suggests that the cost of goods sold or operating expenses are rising in tandem with top-line growth. As a dividend payer, the company offers a dividend yield of 2.4% while maintaining a payout ratio of 39.3%, a level that is generally considered sustainable given the company's strong earnings generation and free cash flow production. The relatively low payout ratio allows the company to retain a significant portion of earnings to reinvest in growth initiatives rather than distributing all profits to shareholders. Overall, the company presents a profile combining moderate growth in both revenue and earnings with a consistent income stream supported by a sustainable dividend policy and a lower volatility beta.