CTRA

Energy

Coterra

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Market Data

Financials

XBRL · SEC EDGAR

2007–2025(19yr)

Revenue

Net Income

Free CF

Metric	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$732.2M	$945.8M	$879.3M	$844.0M	$979.9M	$1.2B	$1.7B	$2.2B	$1.4B	$1.2B	$1.8B	$2.2B	$2.1B	$1.5B	$3.4B	$9.1B	$5.9B	$5.5B	$7.6B	+40.1%
Gross Profit	—	—	$785.3M	$744.4M	$872.5M	$1.1B	$1.6B	$2.0B	$1.2B	$1.1B	$1.7B	$2.1B	$2.0B	$1.4B	$3.3B	$8.6B	$5.4B	$4.8B	$6.6B	+38.0%
Gross Margin	—	—	89.3%	88.2%	89.0%	90.2%	91.9%	93.3%	89.6%	91.3%	94.2%	96.8%	96.3%	95.0%	95.5%	94.9%	90.5%	87.9%	86.6%	-1.3pp
Operating Income	$274.7M	$372.0M	$282.3M	$266.4M	$306.9M	$306.1M	$550.5M	$106.2M	-$90.4M	-$566.6M	-$151.3M	$771.8M	$955.8M	$295.5M	$1.6B	$5.2B	$2.2B	$1.4B	$2.5B	+76.5%
Operating Margin	37.5%	39.3%	32.1%	31.6%	31.3%	25.4%	31.5%	4.9%	-6.7%	-49.0%	-8.6%	35.3%	46.3%	20.1%	45.3%	57.6%	36.4%	25.4%	32.1%	+6.6pp
Net Income	$167.4M	$211.3M	$148.3M	$103.4M	$122.4M	$131.7M	$279.8M	$104.5M	-$113.9M	-$417.1M	$100.4M	$557.0M	$681.0M	$201.0M	$1.2B	$4.1B	$1.6B	$1.1B	$1.7B	+53.2%
Net Margin	22.9%	22.3%	16.9%	12.2%	12.5%	10.9%	16.0%	4.8%	-8.4%	-36.1%	5.7%	25.5%	33.0%	13.7%	33.6%	44.9%	27.5%	20.5%	22.5%	+1.9pp
EPS (Diluted)	$1.71	$2.08	$1.42	$0.98	$0.58	$0.62	$0.66	$0.25	$-0.28	$-0.91	$0.22	$1.24	$1.63	$0.50	$2.29	$5.08	$2.13	$1.50	$2.24	+49.3%

Total Debt$3.8B

Cash & Equiv.$114.0M

Net Debt$3.7B

4 min read

1. THE BIG PICTURE

Coterra is a bridge between two identities: a highly efficient, high-growth standalone operator and a future component of a much larger Devon Energy. While its 40.1% revenue growth leads nearly all peers, Coterra’s immediate trajectory is tethered to the Q2 2026 closing of the Devon merger and the aggressive goal of capturing $1 billion in annual pre-tax synergies by 2027 (8-K).

2. WHERE THE RISKS HIT HARDEST

Asset Diversification vs. Regional Bottlenecks: Coterra’s "defensive positioning" through commodity diversification (10-K Item 1) is threatened by infrastructure constraints at the Waha Hub. In the Permian Basin, regional oversupply has historically forced negative spot pricing, which can negate the advantages of Coterra’s "top-tier" asset quality (10-K Item 1).
Balance Sheet Strength vs. Merger Penalties: Coterra’s "top-tier balance sheet" (10-K Item 1) faces a sudden liquidity shock if the Devon deal collapses. An $865 million termination fee, plus $40 million in reimbursements, would consume nearly an entire quarter’s worth of operating cash flow (Risks, 8-K).
Operational Focus vs. Integration Distraction: Strategic priorities like "Stop Work Authority" and methane reduction (10-K Item 1) are threatened by the "pendency of the merger," which management admits may cause key personnel to depart or business partners to defer decisions (Risks).

3. WHAT THE NUMBERS SAY TOGETHER

Coterra is a high-margin growth engine currently valued like a low-yield utility. It maintains the second-highest gross margin (87.3%) and second-highest revenue growth (+40.1%) in its peer group, yet its buyback yield of 0.7% is the lowest among peers reporting that data (XBRL). This suggests management is prioritizing debt reduction—evidenced by the $100 million term loan repayment in late 2025—and merger-related liquidity over immediate cash returns to shareholders (8-K). Short interest is modest at 3.3% of the float, suggesting the market is not betting heavily against the merger or Coterra's standalone execution (Supplemental Signals).

The 40.1% revenue growth is structural rather than a one-time spike, supported by production that exceeded the high end of guidance in the most recent quarter (8-K). This growth is enabled by Coterra’s ownership of its own gathering and saltwater disposal systems, which allows for faster well connections than peers who rely solely on third-party infrastructure (10-K Item 1).

4. IS IT WORTH IT AT THIS PRICE?

At 11.2x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Coterra trades at a 20% discount to the peer median of 14.1x. According to the CAPM analysis, the market is pricing in a long-term growth rate of just 0.5%. This appears highly pessimistic given Coterra's +40.1% revenue growth and 22.7% net margin (XBRL).

The discount is likely a "merger overhang" reflecting the $865 million termination risk and the execution challenge of the Devon integration. If long-term growth reaches a modest 2.5% (GDP-pace), the sensitivity analysis suggests a justified multiple of 25.4x—more than double the current level. The current price is only "right" if one assumes the Devon merger fails or that commodity price volatility triggers significant reserve write-downs (Risks).

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if the Devon merger closing slides past the second quarter of 2026, which would extend the period of "integration and disruption" risks (Risks).
Constructive if 2026 free cash flow exceeds the $2.35 billion guidance, signaling that standalone capital efficiency is improving even before merger synergies are realized (8-K).
Cautious if regional basis differentials widen at the Waha Hub, indicating that Coterra’s owned infrastructure is insufficient to bypass Permian pipeline constraints (10-K Item 1).

6. BOTTOM LINE

Structural Advantage: Ownership of midstream infrastructure and a geographically diversified asset base that allows for "commodity optionality" and 87% gross margins. Bottom Line: Coterra is an exceptionally efficient operator currently priced at a steep discount due to merger uncertainty; the stock is attractively valued for investors who believe the Devon integration will proceed as planned.

Source: Synthesis · LLM Analysis

3 min read

1. Top 5 Material Risks

Merger Termination Costs: If the merger with Devon is not completed, Coterra may be required to pay an $865 million termination fee plus up to $40 million in reimbursed expenses, alongside non-recurring transaction costs already incurred.
Commodity Price Volatility: Coterra’s financial condition and ability to borrow depend on oil, natural gas, and NGL prices; extended price declines could render projects uneconomic, trigger reserve write-downs, and limit access to capital markets.
Integration and Disruption: The pendency of the merger may cause key personnel to leave, lead business partners to defer decisions, and restrict Coterra from pursuing other strategic opportunities, potentially harming financial results regardless of whether the merger closes.
Infrastructure and Basis Differentials: Coterra relies on third-party gathering and transportation systems; capacity constraints in the Permian Basin have caused significant basis differentials and negative spot market pricing at the Waha Hub, threatening revenues and production volumes.
Reserve Estimation Uncertainty: Proved reserves are subjective estimates; material inaccuracies or downward revisions—often driven by commodity price declines or development delays—could reduce the present value of assets and negatively impact borrowing capacity.

2. Company-Specific Risks

Non-Operated Well Exposure: Approximately 49% of Coterra’s total owned gross wells (11% of net wells) are operated by other companies, limiting Coterra’s control over capital expenditures and compliance with safety and environmental regulations.
PUD Development Hurdles: As of December 31, 2025, 17% of proved reserves were undeveloped; failure to develop these within the SEC-mandated five-year window would require their removal from reported reserves.
Lease Expiration: Coterra faces the risk of losing leases if it fails to maintain production in paying quantities, though less than 1% of net undeveloped acreage in core areas is set to expire over the next three years.
Water Dependency: Operations are highly dependent on water for hydraulic fracturing; drought conditions or regulatory restrictions on water sourcing and disposal could increase operating costs or force the suspension of drilling activities.

3. Regulatory/Legal Risks

Climate Change Legislation: Future laws restricting greenhouse gas (GHG) emissions could increase operating costs through requirements for new control technologies and monitoring, while potentially reducing demand for Coterra’s products.
Data Protection Laws: Coterra is subject to evolving global data protection regulations; non-compliance or security breaches could result in significant fines, penalties, and damage to reputation.
Tax Law Changes: U.S. legislative proposals to repeal tax incentives—such as the percentage depletion allowance or the full deduction of intangible drilling costs—could significantly increase Coterra’s tax burden and reduce net income.
Exclusive-Forum Bylaws: Coterra’s bylaws mandate the Court of Chancery of the State of Delaware as the exclusive forum for derivative actions and fiduciary duty claims, which may limit stockholder options for litigation and increase costs for those pursuing claims.

4. Financial Impact Map

Merger Termination → Cash and Cash Equivalents / Operating Expenses → $865 million termination fee plus $40 million in expense reimbursements. Commodity Price Volatility → Revenues / Net Income → Sustained declines impact the economic viability of drilling programs and reserve valuations. Infrastructure Constraints → Revenues / Operating Expenses → Basis differentials and negative spot pricing at the Waha Hub directly reduce realized prices. Reserve Write-downs → Oil and Gas Properties (Balance Sheet) / Impairment Charges (Income Statement) → Downward adjustments to proved reserves trigger impairment charges if undiscounted future cash flows fall below net book value. Tax Law Changes → Net Income / Cash Flows → Repeal of deductions like intangible drilling costs would increase tax liabilities.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-K	Feb 2026	Dec 2025
8-K	Feb 2026	—
14A	Mar 2025	—