Investment Thesis
Range Resources demonstrates exceptional operational fundamentals with 56.2% operating margins, 59.8% FCF margins, and $618.4M free cash flow generation, supported by conservative leverage (0.18x debt/equity). However, net income growth is essentially flat (+0.2% YoY) despite 4.3% revenue growth, and liquidity metrics are strained with current ratio of 0.55x and minimal cash reserves, warranting caution on near-term financial flexibility.
Strengths
- Exceptional profitability: 56.2% operating margin and 33.0% net margin demonstrate pricing power and operational efficiency
- Outstanding free cash flow: $618.4M FCF with 59.8% FCF margin provides substantial capital flexibility
- Conservative capital structure: 0.18x debt/equity with 29.9x interest coverage indicates low financial risk
- Consistent revenue growth: 4.3% YoY revenue increase in cyclical commodity industry
- Strong cash generation: Operating cash flow of $619.1M significantly exceeds capital needs
Risks
- Severe liquidity constraints: Current ratio of 0.55x and quick ratio of 0.52x both below 1.0 signal working capital stress
- Negligible earnings growth: Net income growth of only 0.2% YoY despite revenue growth indicates earnings pressure or rising costs
- Critical cash shortage: Cash & equivalents of only $247K appears unusually low for a $7.4B asset company and may signal data quality issues
- Commodity price exposure: Operating in cyclical oil/gas sector vulnerable to commodity price volatility
- Minimal dividend growth potential: Flat earnings and capital constraints limit future distribution capacity
Key Metrics to Watch
- Quarterly operating cash flow trend and FCF generation sustainability
- Net income growth rate and operating leverage improvements
- Current ratio recovery and working capital management
- Debt levels and interest coverage through commodity price cycles
Financial Metrics
Revenue
1.0B
Net Income
341.6M
EPS (Diluted)
$1.44
Free Cash Flow
618.4M
Total Assets
7.4B
Cash
247.0K
Profitability Ratios
Gross Margin
N/A
Operating Margin
56.2%
Net Margin
33.0%
ROE
7.4%
ROA
4.6%
FCF Margin
59.8%
Balance Sheet & Liquidity
Current Ratio
0.55x
Quick Ratio
0.52x
Debt/Equity
0.18x
Debt/Assets
37.8%
Interest Coverage
29.91x
Long-term Debt
819.3M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-29T13:30:46.216809 |
Data as of: 2026-03-31 |
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