Chesapeake Energy Corp

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CHK : NYSE : Basic Materials
$6.51 up 0.07 | 1.09%
Today's Range: 6.40 - 6.65
Avg. Daily Volume: 41,274,100
08/30/16 - 4:00 PM ET

Financial Analysis


CHESAPEAKE ENERGY CORP's gross profit margin for the second 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 liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 100.35% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)1622.03521.0
EBITDA ($mil)-1373.0-4457.0
EBIT ($mil)-1667.0-5092.0
Net Income ($mil)-1750.0-4108.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)4.02089.0
Total Assets ($mil)13487.028598.0
Total Debt ($mil)9649.011573.0
Equity ($mil)-32.08958.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin-80.89-124.62
EBITDA Margin-84.64-126.58
Operating Margin-102.77-144.62
Sales Turnover0.710.61
Return on Assets-70.5-22.88
Return on Equity0.0-74.98
Debt Q2 FY16 Q2 FY15
Current Ratio0.320.83
Debt/Capital1.00.56
Interest Expense126.0185.0
Interest Coverage-13.23-27.52


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)775.4663.48
Div / share0.00.09
EPS-2.48-6.27
Book value / share-0.0413.5
Institutional Own % n/a n/a
Avg Daily Volume4.1086712E74.8037752E7

Valuation


SELL. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. 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 74.63   CHK 19.24 Peers 10.83

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 8.44 Peers 44.69   CHK NA Peers 1.04

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 13.98   CHK -31.50 Peers -231.15

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 0.51 Peers 2.57   CHK -45.12 Peers -26.35

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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