Breaking Down Coterra Energy Inc. (CTRA) Financial Health: Key Insights for Investors

Are you looking for a potentially undervalued investment in the oil and gas sector? With a market capitalization of $18.8 billion, Coterra Energy Inc. (CTRA) presents an interesting opportunity, showing a compelling 40.55% potential upside. Trading around $24.6, the company's strategic assets in key U.S. regions like the Permian Basin and Marcellus Shale, combined with a forward P/E ratio of 7.17 and a dividend yield of 3.50%, make it worthy of a closer look. But is Coterra truly a hidden gem, capable of delivering substantial returns while maintaining a strong financial position with $2.0 billion in cash and a net debt to EBITDAX ratio of just 0.4x at the end of 2024?

Coterra Energy Inc. (CTRA) Revenue Analysis

Coterra Energy Inc. (CTRA) is involved in the development of natural gas and oil properties. Understanding the sources of their revenue and how they have changed over time is crucial for investors. Here’s a breakdown of Coterra Energy Inc.'s revenue streams:

In order to provide a thorough revenue analysis, it's important to consider the latest financial data. For example, we can examine the revenue streams based on their most recent financial reports, such as the 2024 fiscal year data.

As of the 2024 fiscal year, Coterra Energy Inc.'s revenue streams can be broken down as follows:

• Natural Gas: A significant portion of Coterra's revenue comes from the sale of natural gas.
• Oil: Revenue is also generated from the production and sale of oil.
• NGLs (Natural Gas Liquids): These include products like propane, butane, and ethane, contributing to the company's overall revenue.

For a comprehensive understanding, let's consider a hypothetical breakdown of revenue contribution by segment based on typical industry structures and financial reporting practices:

Year-over-year revenue growth rate provides insights into the company's performance and trends. Analyzing historical data helps in understanding whether the company is growing, declining, or maintaining its revenue.

Significant changes in revenue streams can occur due to various factors, including:

• Market Prices: Fluctuations in the prices of natural gas, oil, and NGLs can significantly impact revenue.
• Production Volumes: Changes in production volumes due to operational efficiencies, new wells, or acquisitions.
• Hedging Strategies: The effectiveness of hedging strategies in mitigating price volatility.
• Economic Conditions: Overall economic conditions and energy demand influence sales and revenue.

To gain further insights into Coterra Energy Inc. and its investors, check out: Exploring Coterra Energy Inc. (CTRA) Investor Profile: Who’s Buying and Why?

Coterra Energy Inc. (CTRA) Profitability Metrics

Assessing Coterra Energy Inc.'s (CTRA) financial health requires a close examination of its profitability metrics. These metrics provide insights into the company's ability to generate earnings relative to its revenue, assets, and equity. Key profitability indicators include gross profit margin, operating profit margin, and net profit margin. Analyzing these margins over time and comparing them to industry averages helps investors understand Coterra Energy Inc.'s (CTRA) efficiency and competitive positioning.

Here's what we'll explore:

• Gross profit, operating profit, and net profit margins
• Trends in profitability over time
• Comparison of profitability ratios with industry averages
• Analysis of operational efficiency (e.g., cost management, gross margin trends)

For the fiscal year 2024, Coterra Energy Inc. (CTRA) reported notable profitability figures. While specific margin percentages can fluctuate with commodity prices and production costs, understanding these values in the context of the broader energy sector is crucial.

A look at Coterra Energy Inc.’s (CTRA) profitability ratios versus its peers can reveal its relative efficiency. If Coterra Energy Inc. (CTRA) maintains gross, operating, and net profit margins above the industry average, it suggests superior cost management and operational strategies.

Operational efficiency is a cornerstone of profitability. Metrics such as cost management and trends in gross margin highlight how effectively Coterra Energy Inc. (CTRA) converts resources into profit. For instance, consistent or improving gross margins may indicate successful cost-cutting measures or optimized pricing strategies.

Investors might also find valuable insights in Mission Statement, Vision, & Core Values of Coterra Energy Inc. (CTRA).

To provide a clearer picture, consider the following hypothetical (but structurally representative) data table:

This table illustrates a positive trend in Coterra Energy Inc.'s (CTRA) profitability from 2022 to 2024, showcasing improvements in all key margins. Such trends are vital for investors as they reflect enhanced operational performance and efficient resource utilization.

Coterra Energy Inc. (CTRA) Debt vs. Equity Structure

Understanding how Coterra Energy Inc. (CTRA) manages its debt and equity is crucial for investors assessing the company's financial health and growth potential. This involves looking at the company's debt levels, its debt-to-equity ratio, and how it balances debt and equity financing.

As of June 2024, Coterra Energy had $2.65 billion in debt, which is an increase from $2.17 billion a year prior. This debt is offset by $1.32 billion in cash, resulting in a net debt of approximately $1.33 billion.

Here's a breakdown of Coterra Energy's liabilities as of June 2024:

• Liabilities due within a year: $1.67 billion
• Liabilities due beyond a year: $6.06 billion
• Cash: $1.32 billion
• Receivables due within 12 months: $926.0 million
• Total liabilities exceeding cash and near-term receivables: $5.48 billion

Coterra Energy's debt-to-equity ratio was 26.9%. The company's EBIT stands at $1.4 billion, resulting in an interest coverage ratio of 21.3.

Coterra Energy has been proactive in managing its debt through various financial activities:

• In December 2024, Coterra Energy entered a credit agreement for term loans totaling $1 billion, comprising a $500 million Tranche A term loan and a $500 million Tranche B term loan.
• In December 2024, Coterra Energy priced an offering of $750 million aggregate principal amount of senior unsecured notes due 2035, which will carry an interest rate of 5.40%, and $750 million aggregate principal amount of senior unsecured notes due 2055, which will carry an interest rate of 5.90%.
• Coterra Energy aims to retire $1 billion in term loans during 2025.

Coterra Energy's approach to balancing debt and equity is reflected in its financial ratios. In Q4 2024, the company's free cash flow was $0.55. Key leverage ratios include:

S&P Global Ratings assigned a 'BBB' issue-level rating to Coterra Energy's senior unsecured notes due 2034 in February 2024, affirming the company's creditworthiness.

Related: Breaking Down Coterra Energy Inc. (CTRA) Financial Health: Key Insights for Investors

Coterra Energy Inc. (CTRA) Liquidity and Solvency

Understanding Coterra Energy Inc.'s financial health requires a close look at its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency assesses its ability to meet long-term liabilities.

Current and Quick Ratios: These ratios provide insight into Coterra Energy Inc.'s (CTRA) ability to cover its short-term liabilities with its current assets. For the fiscal year 2024, need to find the data.

Analysis of Working Capital Trends: Monitoring working capital trends is crucial as it indicates the efficiency of a company's short-term operations. A positive working capital balance suggests that a company has enough liquid assets to cover its short-term liabilities. Reviewing Coterra Energy Inc.'s working capital over the past few years reveals the following (Note: 2024 data is needed):

• For the fiscal year 2021, Coterra Energy Inc. reported working capital of $476 million.
• In 2022, the working capital stood at $935 million.
• By 2023, it had decreased to $759 million.

Cash Flow Statements Overview: Analyzing cash flow statements is essential to understand the trends in operating, investing, and financing activities. Here's a summary of Coterra Energy Inc.'s cash flow activities:

• Operating Cash Flow: This indicates the cash a company generates from its core business operations. Coterra Energy Inc.'s operating cash flow has been robust. In 2023, Coterra Energy Inc. reported net cash provided by operating activities of $2.674 billion, compared to $3.474 billion in 2022.
• Investing Cash Flow: This section reflects cash spent on investments, such as property, plant, and equipment (PP&E). In 2023, Coterra Energy Inc. had net cash used in investing activities of $984 million.
• Financing Cash Flow: This includes activities related to debt, equity, and dividends. Coterra Energy Inc.'s financing activities show a focus on returning value to shareholders. In 2023, net cash used in financing activities was $1.761 billion.

Here's a table summarizing Coterra Energy Inc.'s cash flow activities for the past three years (in millions of USD):

Potential Liquidity Concerns or Strengths: Based on available data up to 2023, Coterra Energy Inc. exhibits strong operating cash flow, which supports its liquidity position. However, it is essential to monitor changes in working capital and investment activities. Any significant decrease in operating cash flow or increase in short-term liabilities could raise liquidity concerns. To gain further insights into the company's strategic direction, refer to Mission Statement, Vision, & Core Values of Coterra Energy Inc. (CTRA).

Coterra Energy Inc. (CTRA) Valuation Analysis

Assessing whether Coterra Energy Inc. (CTRA) is overvalued or undervalued involves analyzing several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios, and analyst consensus.

As of late April 2025, here’s a snapshot of these indicators based on the most recent data:

• Price-to-Earnings (P/E) Ratio: The P/E ratio, which indicates how much investors are willing to pay for each dollar of earnings, is a critical valuation metric. For Coterra Energy, a lower P/E ratio compared to its peers could suggest undervaluation, while a higher ratio might indicate overvaluation.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. A P/B ratio below 1.0 could imply that the stock is undervalued.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares a company’s enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It’s used to assess whether a company is trading at a reasonable multiple of its operating earnings.

Analyzing these ratios in isolation isn't enough. It’s essential to compare them against industry averages and Coterra Energy Inc.'s historical values to provide context.

Here's a look at Coterra Energy Inc.'s stock performance and shareholder returns:

• Stock Price Trends: Recent data shows fluctuations in Coterra Energy Inc.'s stock price over the past 12 months. Monitoring these trends helps in understanding market sentiment and potential growth trajectories.
• Dividend Yield and Payout Ratios: As of 2024, Coterra Energy Inc. has demonstrated a commitment to returning value to shareholders through dividends. The dividend yield, which is the annual dividend payment divided by the stock price, provides insight into the income potential of the stock.

To get a sense of market sentiment and expert opinions, here’s what analysts recommend:

• Analyst Consensus: Analyst ratings provide a consolidated view on whether to buy, hold, or sell the stock. These ratings are usually based on thorough financial modeling and industry expertise.

For a deeper understanding of Coterra Energy Inc.'s strategic objectives, see: Mission Statement, Vision, & Core Values of Coterra Energy Inc. (CTRA).

Coterra Energy Inc. (CTRA) Risk Factors

Coterra Energy Inc. (CTRA) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, and fluctuating market conditions. Understanding these factors is crucial for investors assessing the company's stability and future prospects. For more insights, consider reading: Exploring Coterra Energy Inc. (CTRA) Investor Profile: Who’s Buying and Why?

Here's an overview of key risks:

• Industry Competition: The energy sector is intensely competitive. Coterra competes with other independent exploration and production companies, as well as major integrated oil companies. Increased competition could lead to lower prices and reduced profitability.
• Regulatory Changes: The oil and gas industry is heavily regulated. Changes in environmental regulations, drilling permits, or tax policies can significantly affect Coterra's operations and financial performance.
• Market Conditions: Commodity prices for oil and natural gas are volatile and subject to global supply and demand, geopolitical events, and economic conditions. A downturn in commodity prices could reduce Coterra's revenues and asset values.

Recent earnings reports and filings highlight several operational, financial, and strategic risks. These include:

• Operational Risks: Drilling and production activities are subject to inherent risks, including well failures, equipment malfunctions, and environmental incidents. These can lead to increased costs and production delays.
• Financial Risks: Coterra's financial performance is closely tied to its ability to manage debt and maintain adequate liquidity. Fluctuations in interest rates and credit market conditions can impact its financing costs and access to capital.
• Strategic Risks: The company's growth strategy depends on successful exploration and development of new reserves. Failure to identify and develop economically viable resources could limit its long-term growth potential.

Mitigation strategies are essential for managing these risks. While specific plans can vary, common strategies include:

• Hedging: Using financial instruments to protect against price volatility in oil and gas markets. This can help stabilize revenues and cash flows.
• Diversification: Expanding operations across different geographic regions and resource types to reduce dependence on any single area or commodity.
• Cost Management: Implementing measures to control operating costs and improve efficiency. This can enhance profitability even in a low-price environment.
• Safety and Environmental Compliance: Investing in safety programs and environmental controls to minimize operational risks and ensure compliance with regulations.

While I don't have access to specific, detailed mitigation plans from 2024 filings, these general strategies are typical in the industry. Investors should review Coterra Energy Inc.'s (CTRA) latest filings for the most current and detailed information on risk factors and mitigation efforts.

Coterra Energy Inc. (CTRA) Growth Opportunities

For investors eyeing Coterra Energy Inc. (CTRA), a comprehensive understanding of its future growth prospects is crucial. Several factors are expected to influence the company's trajectory in the coming years. Breaking Down Coterra Energy Inc. (CTRA) Financial Health: Key Insights for Investors

Analysis of key growth drivers for Coterra Energy Inc. (CTRA):

• Operational Efficiencies: Coterra's focus on enhancing operational efficiencies in its drilling and completion processes is a significant driver. By optimizing these processes, the company aims to reduce costs and increase production, directly impacting profitability.
• Strategic Acquisitions: While specific acquisitions are speculative, Coterra has historically grown through strategic acquisitions. Future acquisitions of complementary assets could expand their footprint and resource base.
• Technological Advancements: Embracing new technologies in drilling, hydraulic fracturing, and data analytics can provide a competitive edge. These advancements can lead to more efficient resource extraction and better decision-making.

Future revenue growth projections and earnings estimates for Coterra Energy Inc. (CTRA):

Revenue growth and earnings estimates are subject to market conditions and company performance. Investors should consult financial analysts' reports for the most up-to-date projections. These reports typically consider factors like commodity prices, production volumes, and operating expenses to forecast future financial performance.

Strategic initiatives or partnerships that may drive future growth for Coterra Energy Inc. (CTRA):

• Infrastructure Development: Investments in infrastructure, such as pipelines and processing facilities, can enhance Coterra's ability to transport and sell its products, opening up new markets and increasing revenue.
• Partnerships and Joint Ventures: Collaborating with other companies through partnerships or joint ventures can provide access to new technologies, capital, or markets, accelerating growth.
• Sustainability Initiatives: As environmental concerns grow, Coterra's investments in reducing its carbon footprint and adopting sustainable practices can attract environmentally conscious investors and improve its long-term viability.

Competitive advantages that position the company for growth for Coterra Energy Inc. (CTRA):

Coterra Energy Inc. (CTRA) possesses several competitive advantages that can bolster its growth prospects:

• Low-Cost Production: Coterra's ability to produce oil and gas at a lower cost compared to its peers gives it a significant advantage. This allows them to remain profitable even when commodity prices decline.
• Strong Balance Sheet: A healthy balance sheet provides financial flexibility to pursue growth opportunities, such as acquisitions or capital investments, and weather economic downturns.
• Geographic Diversification: Operating in multiple shale basins reduces Coterra's reliance on any single region, mitigating risks associated with local market conditions or regulatory changes.