Chesapeake Energy Corp

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CHK : NYSE : Basic Materials
$7.72 | %
Today's Range: 7.63 - 7.8
Avg. Daily Volume: 5.60391E7
12/09/16 - 4:01 PM ET

Financial Analysis


CHESAPEAKE ENERGY CORP's gross profit margin for the third quarter of its fiscal year 2016 has significantly increased when compared to the same period a year ago. Even though sales decreased, the net income has increased. CHESAPEAKE ENERGY CORP has very weak liquidity. Currently, the Quick Ratio is 0.25 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 127.81% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)2276.03376.0
EBITDA ($mil)-135.0-4803.0
EBIT ($mil)-415.0-5322.0
Net Income ($mil)-1155.0-4653.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)4.01759.0
Total Assets ($mil)12523.021286.0
Total Debt ($mil)9678.011596.0
Equity ($mil)-1191.04282.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin-3.16-140.82
EBITDA Margin-5.93-142.26
Operating Margin-18.23-157.64
Sales Turnover0.680.71
Return on Assets-47.99-55.71
Return on Equity0.0-280.96
Debt Q3 FY16 Q3 FY15
Current Ratio0.30.79
Debt/Capital1.140.73
Interest Expense132.0187.0
Interest Coverage-3.14-28.46


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)775.73663.47
Div / share0.00.0
EPS-1.54-7.08
Book value / share-1.546.45
Institutional Own % n/a n/a
Avg Daily Volume5.5511312E74.1115972E7

Valuation


SELL. The current P/E ratio is negative, which has no meaningful value in the assessment of premium or discount valuation, it simply displays that the company has negative earnings. Along with this, the price-to-book ratio is also meaningless due to a negative book value for the company, making any comparisons useless. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CHK NM Peers 40.56   CHK 21.61 Peers 13.38

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

CHK's P/E is negative making this valuation measure meaningless.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CHK is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CHK 9.04 Peers 57.97   CHK NA Peers 2.13

Neutral. The absence of a valid price-to-projected earnings ratio happens when a stock can not be valued on the basis of a negative expected future earnings.

CHK's ratio is negative making this valuation measure meaningless.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CHK NM Peers 22.94   CHK 51.70 Peers -248.32

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CHK's P/B is negative making this valuation measure meaningless.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

CHK is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CHK 0.66 Peers 2.75   CHK -43.95 Peers -20.46

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CHK is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

CHK significantly trails its peers on the basis of sales growth

 

 

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