CNX Resources (CNX) Net Margin Drops Sharply, Undermining Bullish Profitability Narratives

CNX Resources (CNX) reported net profit margins of 8.6%, sharply down from 39.2% the previous year, with a one-off gain of $82.5 million boosting its latest 12-month figures through September 2025. While earnings have been volatile and recorded negative growth over the past year, the company stayed profitable over the past five years, clocking an impressive 40.7% annual earnings growth rate. Looking ahead, analysts expect earnings to rise at 17.95% per year, faster than the US market’s 15.7% forecast. Revenue growth is projected at a more modest 5.7% versus the market’s 10.3% average. Margins have tightened, but the numbers point to resilient profitability and continued top-line growth.

See our full analysis for CNX Resources.

With the headline earnings out, it is time to set these results against the prevailing market narratives to see which talking points are confirmed and which ones may need to be rethought.

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Analyst Forecasts: Margin Recovery Signals Possible Upside

• Analysts expect CNX Resources' profit margins to more than quadruple from 8.6% now to 36.7% in the next three years, with annual revenue growth assumptions at 8.9% compared to the broader US market’s 10.3% pace.
• According to the analysts' consensus view, stronger margins are projected to drive robust cash flow and position the company for steady expansion.
  • Consensus narrative notes growing natural gas demand from AI-driven energy needs and new environmental revenues, which analysts believe could underpin this impressive margin rebound.
  • They also highlight CNX's product diversification and operational efficiencies as factors supporting more durable, high-quality earnings over the next few years.
• Rapid improvement in profitability, if achieved, would validate the consensus expectation that CNX can outpace most industry peers on cash generation and earnings quality.
  • Should margins ramp to 36.7% as forecast, the company could transition from recent volatility back into a phase of sustainable, long-term profit growth despite a slower revenue trajectory than competitors.
  • This scenario would challenge concerns that last year’s weaker profit was a sign of ongoing strain, especially if new environmental credit streams deliver as planned.
• If CNX can execute on margin targets, consensus sees room for a sharp re-rating by investors. Read the full narrative and see why some expect a multi-year rally if operational catalysts deliver. 📊 Read the full CNX Resources Consensus Narrative.

Valuation Disconnect: High Premium, Deep DCF Discount

• At $32.56 per share, CNX trades at a lofty 29.6x price-to-earnings ratio, more than double the US oil and gas industry average of 12.8x, even though its discounted cash flow (DCF) fair value is estimated much higher at $145.11.
• Analysts' consensus view points to a “mixed” market sentiment. While CNX looks significantly undervalued on intrinsic measures, its high P/E premium suggests investors want strong execution before pricing in future growth.
  • Consensus calls out the valuation paradox; bulls may see deep value versus DCF, but the premium to peers implies some skepticism remains about the quality or durability of CNX’s growth drivers.
  • They add that market confidence hinges on CNX proving its long-term earnings power, as investors are wary of the company’s exposure to regulatory shifts and uncertain regional gas demand forecasts.

Share Count Shrinks Amid Cautious Growth Outlook

• Analysts estimate CNX’s share count will shrink by 5.26% each year over the next three years, reflecting ongoing buybacks and capital discipline, even as projected annual revenue growth of 8.9% and forecasted earnings of $859.1 million by 2028 lag broader industry averages.
• According to analysts' consensus view, maintaining strong capital returns signals management’s confidence in long-term free cash flow, but cautious revenue projections mean investors remain focused on execution risks.
  • Consensus notes that operational improvements and discipline could lift earnings per share, but warns that buybacks alone are not enough to offset slower topline expansion and the challenges of sustaining profitability across volatile commodity cycles.
  • This focus on cautious growth and capital discipline feeds into the mixed valuation picture, where execution risks keep the stock’s premium high and analyst price targets only modestly above the current share price.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for CNX Resources on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your CNX Resources research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

See What Else Is Out There

Despite improving margin forecasts and steady buybacks, CNX faces slowing revenue growth and persistent industry skepticism over its valuation and future earnings power.

If you're looking for companies where the numbers suggest better value versus the price paid today, check out these 848 undervalued stocks based on cash flows to see which stocks stand out based on fundamentals.

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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