Markets

How Does the Fundamental Picture Look for Chesapeake Energy Corporation (CHK)?

Chesapeake Energy Corporation (NYSE:CHK) has recently been identified as an interesting stock but more in-depth monitoring is needed for a trade decision. Now trading with a market value of 3.74B, the company has a mix of catalysts and obstacles that spring from the nature of its operations. Everyone seems to have their own opinion of this stock. But what do the numbers really say? We think it’s a great time to take a fresh look.

Chesapeake Energy Corporation (NYSE:CHK) Fundamentals That Matter

It’s generally a good idea to start with the most fundamental piece of the picture: the balance sheet. The balance sheet health of any company plays a key role in its ability to meet its obligations and maintain the faith of its investment base. For CHK, the company currently has 5 million of cash on the books. The trend over time is important to note. In this case, the company’s debt has been growing. The company also has 11.98 billion in total assets, balanced by 12.69 billion in total liabilities, which should give you a sense of the viability of the company under any number of imagined business contexts.

Chesapeake Energy Corporation (CHK) saw 262 million in free cash flow last quarter, representing a quarterly net change in cash of -8 million. Perhaps most importantly where cash movements are concerned, the company saw about 331 million in net operating cash flow.



Chesapeake Energy Corporation (NYSE:CHK) Revenue Growth Potential

As far as key trends that demonstrate something of the future investment potential of this stock, we need to take a closer look at the top line, first and foremost. Last quarter, the company saw 2.01 billion in total revenues. That represents a quarterly year/year change in revenues of -0.06 in sequential terms, the CHK saw sales decline by -0.03.

But what about the bottom line? After all, that’s what really matters in the end. Chesapeake Energy Corporation (CHK) is intriguing when broken down to its core data. The cost of selling goods last quarter was 1.77 billion, yielding a gross basic income of 238 million. For shareholders, given the total diluted outstanding shares of 909 million, this means overall earnings per share of -0.05. Note, this compares with a consensus analyst forecast of 0.23 in earnings per share for its next fiscal quarterly report.




Is Chesapeake Energy Corporation (NYSE:CHK) Valuation Attractive

Looking ahead at valuations, according to the consensus, the next fiscal year is forecast to bring about 0.79 in total earnings per share. If we consider a median price to earnings ratio on the stock, that corresponds with a stock price of 5.59. However, one should always remember: the trends are more important than the forecasts. This continues to be an interesting story, and we look forward to updating it again soon on Chesapeake Energy Corporation.

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