Yahoo Finance CNX Resources Corporation (NYSE:CNX) About To Shift From Loss To Profit
CNX Resources Corporation (NYSE:CNX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. CNX Resources Corporation, an independent natural gas and midstream company, acquires, explores for, develops, and produces natural gas properties in the Appalachian Basin. The company’s loss has recently broadened since it announced a US$499m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$686m, moving it further away from breakeven. The most pressing concern for investors is CNX Resources' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for CNX Resources
Consensus from 5 of the American Oil and Gas analysts is that CNX Resources is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$502m in 2023. So, the company is predicted to breakeven approximately a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 138% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving CNX Resources' growth isn’t the focus of this broad overview, but, take into account that typically an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before we wrap up, there’s one issue worth mentioning. CNX Resources currently has a debt-to-equity ratio of 114%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of CNX Resources which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at CNX Resources, take a look at CNX Resources' company page on Simply Wall St. We've also compiled a list of key aspects you should look at:
Valuation: What is CNX Resources worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether CNX Resources is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CNX Resources’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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