Analysts Expect EQT Corporation (NYSE:EQT) To Breakeven Soon

We feel now is a pretty good time to analyse EQT Corporation's (NYSE:EQT) business as it appears the company may be on the cusp of a considerable accomplishment. EQT Corporation operates as a natural gas production company in the United States. The US$5.1b market-cap company announced a latest loss of US$967m on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is EQT's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for EQT

EQT is bordering on breakeven, according to the 11 American Oil and Gas analysts. They expect the company to post a final loss in 2020, before turning a profit of US$111m in 2021. Therefore, the company is expected to breakeven roughly a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 84%, 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.

Given this is a high-level overview, we won’t go into details of EQT's upcoming projects, though, keep in mind that typically energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. EQT currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in EQT's case is 53%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on EQT, so if you are interested in understanding the company at a deeper level, take a look at EQT's company page on Simply Wall St. We've also put together a list of key factors you should look at:

1. Valuation: What is EQT 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 EQT is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on EQT’s board and the CEO’s background.
3. 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.

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This article by Simply Wall St is general in nature. 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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