EQT Corp. (NYSE:EQT)

The analysis of the annual financial data reveals specific trends and fluctuations in key cash flow metrics over the five-year period ending December 31, 2021.

Net cash provided by operating activities

The net cash provided by operating activities experienced notable volatility during the period. Starting at approximately $1.64 billion in 2017, the figure nearly doubled in 2018, reaching about $2.98 billion. However, it declined significantly in the subsequent years, dropping to approximately $1.85 billion in 2019 and further to $1.54 billion in 2020. There was a modest recovery in 2021, with net cash from operations increasing to around $1.66 billion. This pattern suggests strong operational cash generation in 2018, followed by a downturn likely influenced by external or internal factors, with a slight rebound by the end of 2021.

Free cash flow to equity (FCFE)

The free cash flow to equity demonstrates a more pronounced fluctuation across the years. Beginning at $1.55 billion in 2017, it declined to approximately $1.38 billion in 2018. Thereafter, there was a steep depreciation in 2019 to a mere $37.7 million and limited recovery in 2020 with $187 million, reflecting significant reductions in cash available to equity holders. In 2021, FCFE improved considerably to $1.12 billion but did not return to the levels observed in 2017 and 2018. These movements indicate substantial variability in free cash flow generation, which may be attributed to changes in capital expenditures, financing activities, or operational efficiency impacting equity cash flows.

Overall, while operating cash flows showed recovery after a downturn, the free cash flow available to equity holders experienced sharper declines and only partial recovery by the latest period. The disparity between operational cash and FCFE trends suggests that factors such as investment and financing decisions have significantly affected the cash flows available to shareholders over the analyzed timeframe.

The financial data over the five-year period reveal a fluctuating yet ultimately recovering performance pattern in terms of share price, free cash flow to equity (FCFE) per share, and the price to FCFE ratio (P/FCFE).

Share Price

The share price experienced a pronounced decline from $53.34 at the end of 2017 to a low of $5.38 by the end of 2019. This was followed by a notable recovery, reaching $19.17 in 2020 and further increasing to $21.67 in 2021. The initial sharp decline and subsequent partial recovery suggest significant volatility in market valuation during these years.

FCFE per Share

Free cash flow to equity per share decreased marginally from $5.87 in 2017 to $5.41 in 2018, then dropped significantly to $0.15 in 2019. The figure showed improvement in subsequent years, increasing to $0.67 in 2020 and further to $2.99 in 2021. This pattern indicates a deterioration in cash flow generation capacity around 2019, with gradual recovery afterward.

P/FCFE Ratio

The price to FCFE ratio fell sharply from 9.08 in 2017 to 3.36 in 2018, then dramatically increased to 36.48 in 2019, reflecting the sharp decline in FCFE per share during that year while the share price was also low. The ratio marginally declined to 28.58 in 2020 and further to 7.25 in 2021, indicating an improved but still relatively cautious market valuation relative to free cash flow by the end of the period.

Overall, the data depicts a period of financial strain culminating in 2019, followed by continued recovery in both operational cash flow and market valuation through 2021. Despite improvement, the share price and FCFE levels in 2021 had not returned to the highs observed in 2017, yet the P/FCFE ratio suggests a more normalized valuation environment relative to free cash flow compared to the peak distress period.