CNX Resources Corporation (CNX): what the price requires

At today's price, CNX Resources Corporation (CNX) is priced for +23.7% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/CNX

Headline

FieldValue
TickerCNX
CompanyCNX Resources Corporation
Current price$32.36/sh
CompositionNatural Gas Revenue 78% / NGL Revenue 8% / Oil/Condensate Revenue 0% / Purchased Gas Revenue 2% / Gain (Loss) on Commodity Derivative Instruments 4% / Other Revenue and Operating Income 8%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin (mid-cycle)8.1%
Implied growth23.7%
Multiple paid36x mid-cycle operating income

Solve inputs: computed at a 7.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~9.2pp.

Reconcile: at the x-ray's 9.3% required return this reads ~7.4 years; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.39σ
sustained it ~5 years at this level36%
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset0.34x4justifies
Earnings0.40x3justifies
Relative0.79x5justifies
Growth0.62x2justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.5%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
DCF Exit MultipleGrowth$57.950.56xyesExit EV/EBITDA: 8.6x / 13.6x / 18.6x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$40.810.79xyesP/E 7.76x (blended: static sector reference 10x + trailing (TTM) 4x), scenarios: 5.8x / 7.8x / 9.3x (bear / base = reference held flat / bull), EV/EBITDA 8.27x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$79.520.41xyesBV/sh $28.86, ROE (TTM) 25.5%, ke 9.3%
Two-Stage Excess ReturnAsset$132.970.24xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$46.950.69xyesRev $2.9B, growth 30% (input: historical growth; tapered), Terminal P/S: 1.3x / 1.8x / 2.1x (bear / base = today's held flat / bull, cap 6x)
Peter Lynch Fair ValueRelative$90.000.36xyesEPS $7.50, growth 2% (input: historical EPS growth), PEG=2.20 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset$117.960.27xyesBV $28.86 + 5yr PV of (ROE (TTM) 25.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$69.790.46xyes√(22.5 × EPS $7.50 × BVPS $28.86) — Graham's conservative floor
EV/EBITDA RelativeRelative$4.856.67xyesEBITDA $0.58B × sector EV/EBITDA 6.0x
FCF YieldEarnings$20.671.57xyesFCF $557.4M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$242.000.13xyesEPS $7.50 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$22.041.47xyesRevenue $2.94B × sector P/S 1.2x
PEG Fair ValueRelative$281.250.12xyesEPS $7.50 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$81.080.40xyesEPS $7.50 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Share count CAGR (buyback)-5.4%
Burning cashno

Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.

Operating profit is negative or near zero and there is no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so interest coverage cannot be computed honestly.

Bullet Takeaways

CNX is a mature Appalachian natural-gas producer run as a free-cash-flow and buyback machine, not a growth driller. It generated $139 million of free cash flow in the first quarter of 2026, its twenty-fifth consecutive quarter of free cash flow, and has cut shares outstanding by about 37% since the 2020 peak.

The valuation is asset- and cash-flow supported rather than a growth bet. At $32.68 the stock trades near 1.1x book value of about $29 per share, and most of the model families land at or above the price, which is unusual; the inversion reads it as a value name.

The whole thesis rides on natural gas prices, which the company says are volatile and beyond its control. CNX manages that with a large hedge book (about 448.8 Bcf of 2026 production hedged near $2.74 per Mcf), but a sustained low-price stretch would pressure the cash flow the buyback depends on, and net debt near $2.4 billion against a low interest-coverage ratio is the constraint.

Bull Case

Start with what stage CNX is in, because it changes how the numbers should be read. This is not an exploration story or a production-growth story; it is a mature, low-decline Appalachian gas franchise managed explicitly to convert reserves into free cash flow and return that cash to shareholders by shrinking the share count. The proof is in the cadence: CNX generated $139 million of free cash flow in the first quarter of 2026, its twenty-fifth consecutive quarter of positive free cash flow, and has reduced shares outstanding by roughly 37% since the count peaked in the third quarter of 2020. For a commodity producer, that is the rare discipline that compounds per-share value even when the commodity does not move. As of year-end 2025 the company held 9.7 trillion cubic feet equivalent of proved natural gas reserves, a deep, long-life inventory in a basin where it has scale.

The valuation reflects a business priced as an asset, not a dream. At $32.68 (June 27, 2026) the stock trades near 1.1x book value of about $29 per share, and unusually for the names this engine looks at, the price is supported across the board: the asset-based, earnings-power, relative-multiple, and growth methods all land at or above the current price rather than below it. The discounted-future-market-cap read lands near $47, the exit-multiple DCF near $58, and the book-value-plus-excess-return reads run much higher on the strength of a trailing return on equity around 25%. The inversion frames this as a value, asset-supported name rather than a growth bet, which is the correct read for a free-cash-flow generator trading around book.

The competitive position is solid for what it is. CNX operates primarily in the Appalachian Basin, which it describes as highly fragmented and not dominated by any single producer, with competition based mainly on acreage position (FY2025 10-K, accession 0001070412-26-000038). A low-cost, scaled position in a fragmented basin is a durable cost advantage in a commodity business. Management also hedges aggressively to protect the cash flow that funds the buyback: as of early January 2026, CNX had hedged about 448.8 Bcf of estimated 2026 production at an average $2.74 per Mcf and 379.3 Bcf of 2027 at $3.28 per Mcf (FY2025 10-K, accession 0001070412-26-000038). That hedge book takes a chunk of price risk off the table for the next two years, which is exactly what lets a disciplined buyer keep retiring stock through the cycle. The first-quarter 2026 result, with revenue of $722 million and a swing back to net income, shows the model working when prices cooperate.

Bear Case

The external variable with the most leverage on this thesis is the natural gas price, and CNX controls none of it. The company states the case bluntly: prices for natural gas and NGLs are volatile and can fluctuate widely based on factors beyond its control, and if prices fall or operations disappoint it may have to write down the quantity and value of its reserves (FY2025 10-K, accession 0001070412-26-000038). Appalachian gas is also structurally disadvantaged on price by takeaway constraints out of the basin, and CNX is locked into third-party firm transportation, processing, and gathering agreements with minimum-volume commitments that obligate it to pay fixed demand charges regardless of actual throughput (accession 0001070412-26-000038). So in a low-price environment the revenue falls while a layer of fixed midstream cost does not, squeezing the free cash flow that the entire buyback narrative depends on. The current price does not obviously reflect that downside; the inversion's bear-case band reaches down near $9.

The earnings the methods reward are also noisier than they look. The trailing return on equity near 25% and the trailing EPS that several models capitalize are inflated by unrealized gains on commodity derivatives, which swing violently: the Other Segment recognized an unrealized derivative gain of $278 million in one year against an unrealized loss of $453 million the year before (FY2025 10-K, accession 0001070412-26-000038). Those mark-to-market swings flow through reported earnings and can make a trailing-twelve-month EPS look far stronger or weaker than the underlying cash business. An investor who anchors to the high reported return on equity is partly anchoring to a hedge mark, not to durable earnings power, and the asset-based methods that lean on it should be discounted accordingly.

The balance sheet and the buyback math are the third pressure point. Net debt sits near $2.4 billion, and interest coverage on the trailing operating income is thin, around 1.4x, which means a weak-price year leaves much less cushion than the free-cash-flow headline suggests. And the buyback story, the single biggest short-term attraction, just took two hits at once: CNX confirmed its convertible notes will convert into roughly 12 million new shares, partly offsetting the share-count reduction, while it trimmed 2026 free cash flow guidance to about $525 million to $550 million and slightly cut its adjusted EBITDAX outlook. Dilution plus a softer cash outlook directly weakens the per-share compounding that the bull case rests on. A buyer here is betting that gas prices, the hedge book, and capital discipline all hold together, in a business where the one variable that matters most is the one nobody can forecast.

Valuation

CNX is unusual for this engine in that the price is supported by most of the valuation families rather than sitting above them, which is the signature of a value name rather than a growth bet. At $32.68 the stock trades near 1.1x book value of about $29 per share. The relative-valuation read at a blended P/E near 8x lands around $41, the exit-multiple DCF near $58, and the discounted-future-market-cap read near $47, all above the price. The book-value-plus-excess-return methods land far higher still, but those lean on a trailing return on equity around 25% that is inflated by unrealized derivative gains, so they should be treated as the optimistic end rather than the center. The reverse-DCF band spans about $9 at the bear end, $27 at the base, and $35 at the bull end, which puts the current price in the upper-middle of the range and reflects how much the answer depends on the gas-price path.

The cleaner way to value this name is on the cash it actually generates. CNX guides to roughly $525 million to $550 million of free cash flow for 2026, against a market value in the mid-single-billions, which is a free-cash-flow yield in the low double digits even after the guidance trim. That yield, combined with the share count shrinking and a two-year hedge book locking in part of the price, is the real engine of value here. The trailing reported earnings are too distorted by hedge marks to anchor a multiple on cleanly; the through-cycle free cash flow is the honest measure. On that basis the stock is reasonably valued to modestly cheap if gas prices and the buyback hold, with the major caveats being the convertible-note dilution of about 12 million shares and a balance sheet whose thin interest coverage leaves less room than the free-cash-flow headline implies.

Catalysts

First-quarter 2026 set the recent baseline and it beat expectations: revenue of $722 million, EPS of $1.21, and net income of $348 million versus a year-earlier net loss of $198 million, helped by stronger Appalachian gas volumes. CNX generated $139 million of free cash flow in the quarter, its twenty-fifth consecutive quarter of free cash flow generation. (Sources: CNX first-quarter 2026 results via PR Newswire and the company investor site; Yahoo Finance coverage of the earnings beat; Simply Wall St earnings analysis.)

Two items from the quarter cut against the per-share story and are worth watching. CNX confirmed that its convertible notes will convert into roughly 12 million new shares, a dilution event, and it trimmed full-year 2026 free cash flow guidance to about $525 million to $550 million while slightly lowering its adjusted EBITDAX outlook. Set against that, the company has still reduced shares outstanding about 37% since the 2020 peak, to roughly 142.4 million as of late January 2026. (Source: Simply Wall St analysis of the Q1 rebound, note conversion, and softer outlook.)

The forward watch items are almost entirely price- and capital-allocation driven: the trajectory of natural gas prices and Appalachian basis, the pace and price of buybacks now that the convertible conversion adds shares, the roll-off and re-setting of the hedge book (about 448.8 Bcf hedged for 2026 near $2.74 per Mcf), and each quarterly free cash flow print as a check on the guidance. (Sources: CNX Q1 2026 prepared remarks and supplemental information via the company investor site; CNX FY2025 10-K hedging disclosure.)

Peer Cohorts (Per Segment, With Filing Citations)

Shale (reported)

Coalbed Methane (CBM) (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive CNX report on boothcheck