EXPAND ENERGY CORPORATION (EXE): what the price requires
The current priced-in claim for EXPAND ENERGY CORPORATION (EXE) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/EXE
Headline
| Field | Value |
|---|---|
| Ticker | EXE |
| Company | EXPAND ENERGY CORPORATION |
| Current price | $87.47/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 7.6% |
| Operating margin today | 24.6% |
| Margin compression implied | -17.0pp |
| Multiple paid | 7x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 8.2% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.75σ |
| cohort percentile (of 45 peers) | 7 |
| implied end-window share | 0% |
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.56x | 5 | justifies |
| Earnings | 0.67x | 4 | justifies |
| Relative | 0.54x | 5 | justifies |
| Growth | 0.96x | 4 | justifies |
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 7.4%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $373.71 | 0.23x | yes | FCF base $3.0B, growth 25% (input: historical growth), terminal g 4.0%, WACC 7.4%, 5yr projection |
| DCF Exit Multiple | Growth | $101.67 | 0.86x | yes | Exit EV/EBITDA: 4.0x / 3.4x / 8.4x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $163.03 | 0.54x | yes | P/E 10x (static sector reference · 2026-04), scenarios: 7.5x / 10.0x / 12.0x (bear / base = reference held flat / bull), EV/EBITDA 6x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $83.08 | 1.05x | yes | Stage 1: 20% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $144.90 | 0.60x | yes | BV/sh $81.18, ROE (TTM) 16.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $191.08 | 0.46x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $78.81 | 1.11x | yes | Rev $14.3B, growth 30% (input: historical growth; tapered), Terminal P/S: 1.1x / 1.5x / 1.8x (bear / base = today's held flat / bull, cap 6x) |
| Peter Lynch Fair Value | Relative | $161.28 | 0.54x | yes | EPS $13.44, growth 2% (input: historical EPS growth), PEG=3.27 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $41.57 | 2.10x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.88B × (1−22%) / WACC 7.4% → EPV (no growth) |
| Residual Income | Asset | $193.25 | 0.45x | yes | BV $81.18 + 5yr PV of (ROE (TTM) 16.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $156.69 | 0.56x | yes | √(22.5 × EPS $13.44 × BVPS $81.18) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $165.25 | 0.53x | yes | EBITDA $7.25B × sector EV/EBITDA 6.0x |
| FCF Yield | Earnings | $119.33 | 0.73x | yes | FCF $3001.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $433.66 | 0.20x | yes | EPS $13.44 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $56.31 | 1.55x | yes | BV $81.18 × (ROIC 5.1% / WACC 7.4%) |
| P/Sales Sector | Relative | $71.40 | 1.23x | yes | Revenue $14.32B × sector P/S 1.2x |
| PEG Fair Value | Relative | $504.00 | 0.17x | yes | EPS $13.44 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $145.30 | 0.60x | yes | EPS $13.44 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $2.8b |
| Net debt / NOPAT (after-tax) | 1.10x |
| Net debt / operating income (pre-tax) | 0.86x |
| Interest coverage | 13.9x |
| Share count CAGR (dilution) | 18.8% |
| Burning cash | no |
Bullet Takeaways
- Expand Energy is the largest natural gas producer in the United States, with reserves concentrated in the lowest-cost basins, and a PV-10 of estimated future net revenue of $19,374 million across "Haynesville, Northeast Appalachia and Southwest A"ppalachia.
- The biggest specific risk is the gas price, which is the single dominant variable: the company anchors production at 7.5 Bcf per day on a mid-cycle price assumption of $3.50 to $4.00, and is prepared to defer completions if prices soften.
- What moves the stock next is the commodity cycle and capital return: a temporary gas-price spike drove first-quarter 2026 revenue up about 43% and free cash flow of $1.7 billion, which the company used to cut debt by $1.3 billion and return $290 million to shareholders.
Bull Case
Expand Energy is a mature commodity business, and the right way to read it is through scale and cost position rather than growth. It is the largest natural gas producer in the country, and size in gas matters because the lowest-cost producer survives every price environment and thrives in the good ones. The reserve base is concentrated in the premier basins, with a PV-10 of estimated future net revenue of $19,374 million spanning "Haynesville, Northeast Appalachia and Southwest A"ppalachia [accession 0000895126-26-000011]. Those are the acreage positions closest to the Gulf Coast LNG corridor and to the growing electricity demand that data centers are creating, which positions Expand to supply the two structural sources of new gas demand without having to acquire its way there.
The balance sheet is the standout, and it is what separates this cycle from prior gas booms. Net debt sits at roughly 0.65 times operating income, interest coverage runs above 18 times, and the company used a strong first quarter to cut debt by another $1.3 billion. A commodity producer that carries almost no leverage going into a price upturn is one that can ride out the next downturn without dilution or distress, which is precisely the discipline that destroyed value in earlier gas cycles when producers levered up at the top. The first quarter showed the operating leverage that low cost provides: revenue rose about 43% and earnings per share roughly 90% on a temporary gas-price spike, generating $1.7 billion of free cash flow.
Capital discipline extends to how the company runs the business. Production is held flat at 7.5 Bcf per day rather than chased higher, and management is explicit that it will defer completions if prices soften, treating low-cost reserves as inventory to be produced when prices justify it rather than dumped into a weak market. That restraint, paired with $290 million returned to shareholders in the quarter, is the modern shale playbook done right: maximize free cash flow per unit, return it, and let the reserve base appreciate as LNG and power demand tighten the market. The bull case is that Expand is the best-positioned, best-capitalized way to own a structural rise in U.S. gas demand.
Bear Case
Everything about Expand Energy ultimately rides on one external variable, and the most leverage on the thesis sits with the price of natural gas. The company's own filing lists the risks that move its results, and they are the commodity's risks: "Reduced demand for natural gas, oil and natural gas liquids" and the broader "volatility in natural gas, oil and NGL prices" that can spike or collapse on weather, storage, and macro shifts. The first quarter is the cautionary illustration, not the trend: revenue up 43% and EPS up 90% were driven by a temporary gas-price spike, and a producer's peak-quarter earnings are the most dangerous number to extrapolate. Gas is a notoriously mean-reverting commodity, and a warm winter or a storage glut can take the price back below the company's own $3.50 to $4.00 mid-cycle assumption in short order.
The valuation methods all sit above the price, which on its face looks bullish, but for a cyclical it requires a translation. The catch is that those methods are reading a peak-cycle operating income; capitalize a number inflated by a price spike and the apparent cheapness shrinks. The honest framing is that Expand looks cheap on trailing earnings precisely because trailing earnings reflect a strong gas-price moment, and the sustainable level depends entirely on where mid-cycle gas settles. If it settles at the low end of the assumed band, the multiple that looks like 7 times becomes a good deal higher.
The demand story also carries timing and structural risk. The LNG and data center demand that underpins the bull thesis is real but lumpy: export terminals come online on multi-year schedules, and power demand growth depends on interconnection and buildout that the producer does not control. Meanwhile the filing flags "negative public perceptions of our industry" and "competition in the na"tural gas market as persistent headwinds. The share count also jumped sharply, up about 19% over the trailing period, reflecting the all-stock combination that created the company, so per-share metrics must be read against a much larger base. The bear case is not that Expand is poorly run; it is exceptionally well capitalized. It is that a commodity producer at a strong point in the price cycle, with earnings that the next downturn will compress, is being valued on numbers that the cycle can take away.
Valuation
The starting point for a commodity producer is that the methods and the multiple both look cheap, and both need a cyclical translation. Every valuation family lands above today's price: asset value, earnings power, peer multiples, and forward growth all support it, and the price implies only about 7 times operating income, in the lower half of the energy peer range. Read literally, that is a deeply value-supported stock. Read honestly, the operating income those methods capitalize reflects a strong gas-price moment, so the apparent cheapness is partly a function of where the commodity sits today.
The cyclical lens is what reconciles it. Peak earnings are not sustainable earnings, and the right anchor is the mid-cycle gas price the company itself uses, $3.50 to $4.00, which is well below the spike that drove the first quarter. At a mid-cycle price the operating income normalizes lower and the multiple rises, which is why a low headline multiple on an E&P is never the whole story. The reserve value provides a firmer floor: a PV-10 of $19,374 million is a discounted estimate of the cash the proved reserves can generate, and it sits comfortably above the current enterprise value, which is the asset-based case for the stock. Against peers such as Ovintiv and Devon, Expand's combination of scale, low-cost basins, and a clean balance sheet is the differentiator the value methods are picking up.
Solvency is the genuine strength and the reason the bear is about price, not survival. Net debt at roughly 0.65 times operating income, interest coverage above 18 times, and $1.3 billion of debt reduction in a single quarter describe a balance sheet built to absorb a downturn. The company is not burning cash; it generates substantial free cash flow and returns a portion of it. The price reflects a low-cost, low-leverage producer valued on earnings the gas cycle inflated, where the buyer is underwriting where mid-cycle gas settles far more than any company-specific execution risk.
Catalysts
The first quarter of 2026 was a strong print driven by the commodity. Expand Energy reported revenue up about 43% and earnings per share up roughly 90% year over year, the result of a temporary spike in natural gas prices, and it generated $1.7 billion of free cash flow in the quarter. The company put that cash to disciplined use, cutting debt by $1.3 billion and returning $290 million to shareholders. Production guidance was held at 7.5 Bcf per day on a mid-cycle price assumption of $3.50 to $4.00, with management signaling it will defer completions if markets soften, a deliberate choice to manage volumes to price rather than grow into weakness.
Analyst sentiment is notably bullish, fitting a stock seen as the premier gas producer into a tightening market. Out of 28 analysts, 22 rate the shares Strong Buy, and the average target sits near $134 to $136, well above the current price, though a few firms have trimmed targets modestly. The catalysts that matter from here are external and structural: the trajectory of natural gas prices through the next heating and cooling seasons, the pace of new LNG export capacity coming online, and the growth of electricity demand from data centers. All three feed the same lever, the price Expand receives for its gas, which is the variable the entire thesis turns on.
Peer Cohorts (Per Segment, With Filing Citations)
Exploration and Production (reported)
- CNX (CNX Resources Corporation)
- (no filing in the citation store)
- AR (ANTERO RESOURCES CORPORATION)
- (no filing in the citation store)
- RRC (RANGE RESOURCES CORPORATION)
- (no filing in the citation store)
- GPOR (Gulfport Energy Corporation)
- (no filing in the citation store)
- EQT (EQT Corporation)
- (no filing in the citation store)
- CTRA (COTERRA ENERGY INC.)
- (no filing in the citation store)
- SM (SM ENERGY CO)
- (no filing in the citation store)
- EOG (EOG RESOURCES, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
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.
Sources
Q1 2026 results, April 2026 · analyst notes, 2026