CTRA 26.28 (-1.65%)
US1270971039Oil & GasOil & Gas E&P

Last update on 2024-06-06

Coterra Energy (CTRA) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Analyze Coterra Energy (CTRA)'s financial health through the Piotroski F-Score method for 2023. See detailed performance metrics and historical data in this report.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 5

We're running Coterra Energy (CTRA) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
Current Ratio is growing?
0
Number of shares not diluted?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
0

We assessed Coterra Energy (CTRA) using the Piotroski F-Score, a model which helps investors identify strong and undervalued stocks. The score ranges from 0 to 9 and considers profitability, liquidity, and operating efficiency. Coterra Energy scored a 5 on this model, meaning it has good but not exceptional financial health. The company excelled in areas like positive net income, cash flow, and decreases in leverage and shares outstanding. However, it didn't perform well on metrics like Return on Assets (ROA), current ratio, gross margin, and asset turnover.

Insights for Value Investors Seeking Stable Income

Investors might want to give Coterra Energy a closer look due to its strong cash flow and reduced leverage. However, the low scores on certain financial ratios suggest caution, as the company may face some operational inefficiencies. Ideally, keep an eye on future reports to see if these metrics improve, confirming stronger, overall financial health.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Coterra Energy (CTRA)

Company has a positive net income?

Evaluating whether the net income is positive or negative is a critical criterion in the Piotroski F-Score analysis.

Historical Net Income of Coterra Energy (CTRA)

For Coterra Energy, the net income for 2023 is $1,625,000,000, which is a strong positive figure. This signals profitability and grants the company 1 point on this criterion. Historical data reveals fluctuations, including negative net income in 2013 and 2014. Nonetheless, the positive trend in recent years highlights the company’s resiliency and current robust financial health.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the cash that a company produces through its normal business operations, as opposed to from borrowing or investments. Positive CFO is crucial as it means the company generates enough operating cash flows to maintain and grow operations without needing external funding.

Historical Operating Cash Flow of Coterra Energy (CTRA)

For Coterra Energy (CTRA), the CFO in 2023 is $3,658,000,000, which is positive. This positive trend indicates strong operational performance and effective cash management. Historically, Coterra Energy has shown a generally positive trajectory in CFO over the last 20 years, peaking at $5,456,000,000 in 2022 but still significantly higher than earlier years like 2003 with $241,638,000. Overall, this positive CFO adds 1 point to Coterra Energy’s Piotroski score, reflecting its solid cash-generating ability.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's profitability relative to its total assets. It's important as it reflects the efficiency of management in using assets to generate earnings. A higher ROA indicates better performance.

Historical change in Return on Assets (ROA) of Coterra Energy (CTRA)

The ROA for Coterra Energy in 2023 is 0.0801, down from 0.203 in 2022. This decrease signifies a drop in profitability and efficiency in asset utilization. Given that the industry median ROA over the years has fluctuated, Coterra Energy's declining ROA is concerning. For instance, the industry median ROA in 2023 is about 0.4978, substantially higher than that of Coterra Energy. This drop results in a score of 0 for this criterion, highlighting a potential issue in the company’s operational efficiency. The trend indicates that Coterra Energy may be facing challenges in maintaining or improving its profitability compared to its total assets, considering the industry benchmarks.

Operating Cashflow are higher than Netincome?

Operating cash flow measures the cash generated from a company's normal business operations, while net income is the profit after all expenses have been deducted.

Historical accruals of Coterra Energy (CTRA)

In 2023, Coterra Energy (CTRA) had an operating cash flow of $3.658 billion compared to a net income of $1.625 billion. Since the operating cash flow is higher than the net income, we add 1 point according to the Piotroski F-Score criterion. This trend is very positive as it indicates that the company is generating sufficient cash from its core business activities, which adds a layer of financial resilience and operational effectiveness. Over the past 20 years, the company's operating cash flow has seen significant growth, especially a notable spike to $5.456 billion in 2022. This trend strengthens investor confidence, as higher operating cash flow relative to net income shows that the net income isn't inflated by non-cash items. Over the years, the average operating cash flow has been substantially robust, often outpacing net income, indicating healthy liquidity and prudent financial management.

Liquidity of Coterra Energy (CTRA)

Leverage is declining?

Change in leverage for Coterra Energy (CTRA) highlights whether the company is reducing its reliance on debt.

Historical leverage of Coterra Energy (CTRA)

Comparing the leverage ratios of 2022 (0.123) and 2023 (0.0896), we observe a reduction in leverage in 2023, which is positive. This reflects prudent financial management and increased equity financing, thereby bolstering financial stability. Historically, leveraging trends from 2003 to 2023 reveal a peak leverage ratio of 0.292 in 2018. The declining trend toward 2023 signifies robust financial health. We assign 1 point for the positive trend in leverage reduction.

Current Ratio is growing?

The current ratio is a measure of a company's ability to cover its short-term liabilities with its short-term assets and it indicates financial health.

Historical Current Ratio of Coterra Energy (CTRA)

For Coterra Energy (CTRA), the current ratio has decreased from 1.8533 in 2022 to 1.2139 in 2023. Historically, from the year 2003 to 2023, the current ratio experienced significant volatility with highs and lows reflecting shifts in liquidity management. When compared to the 2023 industry median current ratio of 1.1065, Coterra's current ratio appears comparatively favorable, albeit not improved since last year. This decline suggests weakening liquidity, warranting a score of 0 for this trend, indicating a deterioration in the company’s ability to manage short-term obligations.

Number of shares not diluted?

The change in shares outstanding measures the alteration in the number of a company's shares available on the market.

Historical outstanding shares of Coterra Energy (CTRA)

In 2023, the outstanding shares for Coterra Energy (CTRA) decreased from 796 million in 2022 to 756 million. This decline in outstanding shares is generally perceived positively as it may indicate share buybacks or other mechanisms to return value to shareholders. Historically, Coterra Energy's shares outstanding have fluctuated, as indicated by the data from the past 20 years, but the recent decrease marks a significant point, considering the peak in 2022. Given the reduction in the number of shares, this criterion scores 1 point.

Operating of Coterra Energy (CTRA)

Cross Margin is growing?

Gross Margin assesses a company's financial health and its ability to generate profit from its revenue. It reveals the core profitability of a company's operations.

Historical gross margin of Coterra Energy (CTRA)

Comparing Coterra Energy's (CTRA) Gross Margin from 2022 (0.663) to 2023 (0.4626), we see a decline, setting the point to 0. This negative trend indicates a deterioration in core profitability. While the Industry Median Gross Margin was 0.6218 in 2022 and 0.4978 in 2023, the industry also experienced a slight decline. Over the last 20 years, the company's Gross Margin peaked in 2009 at 0.8169 but dropped dramatically to 0.0152 in 2016. Despite improvement until 2021 (0.5616), the recent fall to 0.4626 highlights competitive challenges or operational inefficiencies.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate sales. It reflects the productivity of the assets in place.

Historical asset turnover ratio of Coterra Energy (CTRA)

In the case of Coterra Energy (CTRA), the Asset Turnover has decreased from 0.4519 in 2022 to 0.2916 in 2023. This significant decline indicates a reduction in the efficiency with which the company utilizes its assets to generate revenue. Historically, we've observed fluctuations in Coterra Energy's asset turnover over the last 20 years, with previous lows around 0.2196 in 2010 and highs close to 0.5046 in 2005. The recent ratio is concerning and suggests a backslide in operational efficiency, thus receiving a score of 0 in the Piotroski analysis for this criterion.


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