Value
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.5 |
| P/S | 7.8 |
| EV/EBITDA | 8.1 |
| Fwd P/E | 8.4 |
| PEG | 4.9 |
| Analyst target | 6.0 |
- ▸Forward P/E: 13.7x
- ▸PEG: 1.55
- ▸Attractively valued
EQT · Why this verdict
Why EQT (EQT) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
EQT is an attractively valued natural gas producer with a perfect four-quarter earnings beat streak, 35% margins, a wide economic moat, and roughly 24% headroom to the analyst price target at a better than 7-to-1 favorable risk/reward; the principal near-term concern is that price momentum has fallen well below the minimum threshold — the stock sits beneath its 200-day moving average at near-capitulation RSI levels — while concentrated Appalachian Basin exposure adds structural sensitivity to regional price differentials and regulatory conditions.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With roughly 93% of production tied to the Marcellus Shale in the Appalachian Basin, the company carries three high-severity geographic concentration risks flagged in the annual filing, leaving cash flows highly sensitive to a single basin's infrastructure access, regional price differentials, and regulatory changes. Bear case | No adverse Appalachian-specific regulatory, infrastructure, or basis-differential event materially reduces realized prices over the next 12 months. | ↓Deteriorating |
| CounterDeep operational expertise in a single basin can be a competitive advantage, and the wide moat score may reflect the scale and cost efficiencies that a concentrated Marcellus focus delivers. | ||
The company has beaten consensus EPS estimates in all four of the last four quarters, with an average upside surprise above 20%, indicating disciplined guidance and reliable operational execution. Earnings | EPS surprises remain positive for the next four consecutive quarters, sustaining the beat streak. | ↑Improving |
| CounterNatural gas price mean-reversion could compress realized revenues below current forward estimates, making earnings beats harder to sustain as commodity conditions normalize. | ||
The shares trade roughly 24% below the analyst price target, and the upside-to-downside geometry is approximately 7-to-1 in favor of the long — a level that clears the asymmetry bar by a wide margin. Price targets | Price converges toward the $63 analyst target over 12 months as operational results close the valuation gap. | ↓Deteriorating |
| CounterIf natural gas prices mean-revert from elevated levels, the analyst target itself may be revised downward, pulling the apparent upside closer to the current price. | ||
The business carries 35% margins, a wide economic moat, a combined growth-plus-profitability score of 77, and a financial-health score of 8 out of 9, placing it among the highest-quality operators in its peer group. Quality breakdown | Gross margins remain above 30% and the financial-health score stays above 7 for four consecutive quarters. | →Stable |
| CounterFree cash flow currently converts at only 76% of net income — a quality warning — suggesting reported earnings overstate true cash generation; if that gap widens, the apparent quality deteriorates even if headline margins hold. | ||
The stock is trading beneath its 200-day moving average with an RSI near 21, consistent with capitulation-level selling pressure; momentum has failed the minimum threshold and has not yet reversed. Momentum breakdown | RSI recovers above 50 and price closes back above the 200-day moving average within two quarters. | ↑Improving |
| CounterThe 200-day moving average is still trending upward at roughly +0.9% per month, suggesting the longer-term uptrend remains intact and the current weakness may be a temporary pullback rather than a confirmed trend reversal. | ||
With roughly 93% of production tied to the Marcellus Shale in the Appalachian Basin, the company carries three high-severity geographic concentration risks flagged in the annual filing, leaving cash flows highly sensitive to a single basin's infrastructure access, regional price differentials, and regulatory changes.
↓DeterioratingBear case
- Expectation
- No adverse Appalachian-specific regulatory, infrastructure, or basis-differential event materially reduces realized prices over the next 12 months.
CounterDeep operational expertise in a single basin can be a competitive advantage, and the wide moat score may reflect the scale and cost efficiencies that a concentrated Marcellus focus delivers.
The company has beaten consensus EPS estimates in all four of the last four quarters, with an average upside surprise above 20%, indicating disciplined guidance and reliable operational execution.
↑ImprovingEarnings
- Expectation
- EPS surprises remain positive for the next four consecutive quarters, sustaining the beat streak.
CounterNatural gas price mean-reversion could compress realized revenues below current forward estimates, making earnings beats harder to sustain as commodity conditions normalize.
The shares trade roughly 24% below the analyst price target, and the upside-to-downside geometry is approximately 7-to-1 in favor of the long — a level that clears the asymmetry bar by a wide margin.
↓DeterioratingPrice targets
- Expectation
- Price converges toward the $63 analyst target over 12 months as operational results close the valuation gap.
CounterIf natural gas prices mean-revert from elevated levels, the analyst target itself may be revised downward, pulling the apparent upside closer to the current price.
The business carries 35% margins, a wide economic moat, a combined growth-plus-profitability score of 77, and a financial-health score of 8 out of 9, placing it among the highest-quality operators in its peer group.
→StableQuality breakdown
- Expectation
- Gross margins remain above 30% and the financial-health score stays above 7 for four consecutive quarters.
CounterFree cash flow currently converts at only 76% of net income — a quality warning — suggesting reported earnings overstate true cash generation; if that gap widens, the apparent quality deteriorates even if headline margins hold.
The stock is trading beneath its 200-day moving average with an RSI near 21, consistent with capitulation-level selling pressure; momentum has failed the minimum threshold and has not yet reversed.
↑ImprovingMomentum breakdown
- Expectation
- RSI recovers above 50 and price closes back above the 200-day moving average within two quarters.
CounterThe 200-day moving average is still trending upward at roughly +0.9% per month, suggesting the longer-term uptrend remains intact and the current weakness may be a temporary pullback rather than a confirmed trend reversal.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.7 |
| ROA | 4.4 |
| Gross margin | 10.0 |
| Op margin | 9.3 |
| Net margin | 10.0 |
| Current ratio | 2.7 |
| FCF quality | 6.5 |
| Moat | 6.1 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Strong margins: 29%
- ▸Rule of 40: 23 (fail)
Growth
0.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.5 |
| EPS growth | 0.0 |
- ▸Declining revenue: -4%
Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.4 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.5 |
| Volume | 1.6 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.5 |
| Analyst rating | 9.0 |
| Price target | 8.1 |
- ▸Analyst upside: 24%
Insider
4.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.6 |
| notable moves | 3.0 |
- ▸Insider selling (low materiality) — $5,356,619 (0.016% of mkt cap)
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.5 |
| quality rank | 6.5 |
| growth rank | 1.1 |
- ▸Best-in-class margins
Technical
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 1.1 |
| 52w position | 6.0 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 8.5 |
| volatility | 6.4 |
| put call | 7.3 |
| implied vol | 6.5 |
| max pain risk | 3.0 |
| beta | 9.5 |
| debt equity | 9.2 |
- ▸Above max pain $40
- ▸Concentration risks: 3 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 8.5 |
| news activity | 6.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend aristocrat: 1.2% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.3>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:65d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.1<1.5@spot
Warning (2)
- DEATH_CROSS:momentum=6.3>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.08
Upside
+11.9%
Downside
11.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 66
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:1.1<1.5@spot) reinforce the read. Current asymmetry R:R is 1.08 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.6, Risk (lower is worse) at 7.3, and Value at 7.1; the weakest are Growth at 0.8, Technical at 3.0, and Insider at 4.2. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 1.08 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Compelling Valuation Risk Reward
Trip ifUpside to analyst price target compresses below 5% as price rises toward $60.
- P3High Quality Operational Profile
Trip ifFree cash flow conversion to net income falls below 50% for 2 consecutive quarters.
- P4Near Term Momentum Weakness
Trip ifRSI rises above 50 and price closes above the 200-day moving average for 10 consecutive sessions.
- P5Appalachian Basin Concentration
Trip ifAppalachian Basin share of total production falls below 80% for 2 consecutive reporting periods.