EQT Corporation (EQT)

Conclusion

EQT Corporation produces natural gas, natural gas liquids and oil in the Appalachian Basin and sells them to marketers, utilities and industrial customers. It also runs gathering and transmission assets and propane terminals. On 2026-11-06 the shares were priced at 49.40 USD, giving a market capitalisation of 30.90 billion USD and an enterprise value of 36.38 billion USD.

The verdict is undervalued. EV/EBITDA of 5.4x sits below its ten-year median of 7.5x, a premium of -28.0%, and price to free cash flow of 8.1x sits below a median of 11.7x, a premium of -31.0%. The discounted cash flow gives 210.29 USD per share at a discount rate of 8.87%, and the fair value band runs from 107.86 to 161.78 USD with a midpoint of 134.82 USD. The reverse DCF implies growth of -6.5% a year, while revenue grew at 27.8% a year over five years and free cash flow per share at 19.0%.

The strongest numbers are an operating margin of 41.9%, free cash flow conversion of 136.6% on a trailing twelve-month basis, and interest coverage of 11.6x. The weakest are a share count that rose at 19.1% a year over five years, a three-year revenue decline at -9.3% a year, and next-year earnings estimates that fell 8.7% over 90 days, with the growth estimate at -7.6%. If those estimates prove right, the low multiples could stay low.

Financial health

Financial strength is yellow: net debt to EBITDA of 0.82x, interest coverage of 11.6x and a debt to equity ratio of 0.22 support the company, while a current ratio of 0.71 and a quick ratio of 0.51 weigh on it. The Altman Z-score is 2.22, in the grey zone. The Altman model was designed for manufacturers, so it only approximates a gas producer. Insolvency risk: low, about 0.06% by the estimate of the Ohlson model over one to two years, based on figures as of 2025-12-31. The company has a debt to revenue change of -18.3% over five years, so its debt has shrunk relative to sales.

Earnings quality

Earnings quality is yellow: the Piotroski score of 8 out of 9, a Beneish M-score of -2.65 (unlikely to be manipulated) and free cash flow conversion of 155.8% over five years support it. The accrual ratio of -7.6% points to cash earnings beating reported earnings. Stock-based compensation is 0.9% of revenue, and free cash flow after it is 3.73 billion USD. The share count rose at 19.1% a year over five years, so this is dilution, not buybacks. The company beat earnings estimates in seven of the last eight quarters, with an average surprise of 20.4%. However, current-year estimates were cut by 8.2% over 90 days, with 12 downward and 6 upward revisions in the last 30 days.

Profitability

Profitability is green. The operating margin of 41.9% and the net margin of 30.2% stand far above their ten-year medians of -3.6% and -6.2%, and the gross margin of 75.7% compares with a median of 46.3%. ROIC of 10.2% against a WACC of 8.27% gives a spread, ROIC minus WACC, of 1.94%, which is neutral. The five-year median ROIC is 8.13%. The DuPont split (2025-12-31) shows a net margin of 22.5%, an asset turnover of 0.22 and an equity multiplier of 1.76. Leverage contributes little, so the return on equity of 11.0% rests mainly on margins.

Growth

Growth is red. Revenue compounds at -9.3% over three years, but at 27.8% over five years and 16.6% over ten. Earnings per share fell 9.2% a year over three years, though they grew 19.4% a year over ten. Free cash flow per share fell 3.2% a year over three years and rose 19.0% over five. Revenue grew in six of the last ten comparable years. The next-year growth estimate is -7.6%, so the recent decline may continue before any recovery.

Valuation

Valuation is green. EV/EBITDA of 5.4x and price to free cash flow of 8.1x sit well below their ten-year medians, while price to sales of 3.3x and price to book of 1.2x sit above theirs, by 24.6% and 4.8%. The discounted cash flow gives 210.29 USD per share at a discount rate of 8.87%. The fair value from historical multiples is 59.35 USD. The fair value band of 107.86 to 161.78 USD is an order-of-magnitude estimate built on fixed assumptions, including a 5% equity risk premium and capped growth. It is not a price target. The reverse DCF implies growth of -6.5%. The dividend yield is 1.3% and the payout on free cash flow is 10.8%.

Risks

Weak earnings estimates are the main risk: a -7.6% growth estimate for next year would mean earnings keep falling even though margins are high. A current ratio of 0.71 means short-term obligations exceed liquid assets, so the company depends on steady cash flow. Continued dilution at 19.1% a year would reduce the value per share for existing holders. A three-year revenue decline of 9.3% a year shows that the strong five-year growth is not a steady trend. The analysis has no debt maturity schedule and no revenue split by segment, so debt timing and the sources of revenue cannot be checked. Comparisons with ten-year medians depend on the historical data available, and the P/E median is not available. The DuPont split dates from 2025-12-31, while the return on equity is trailing twelve months to 2026-09-30.