In terms of valuation, CHK continues to post a negative P/E ratio of 8.16x and is still overvalued compared to our peer group, with a 2019 EV/EBITDA of 5.03x versus 3.47x for EQT Corp. (EQT) and 2.53x for Magnolia Oil & Gas Corp. (MGY).
Besides, the company has the highest leverage in the group, with a 2019 net debt on EBITDA of 4.15x against 2.62x for Whiting Petroleum Corp. (NYSE:WLL) and 2.29x for EQT.
Also, CHK's profitability still stands in negative territory, despite its halving since our last take on the subject. With a negative 2019 net margin of 4.99%, the company remains in the queue of our comp analysis, averaging now 6.53%.
That being said, we reiterate our bearish view on CHK, and we believe that the stock will reach fresh lows in the coming months, given low natural gas prices, lack of noteworthy catalysts, dropping free cash flow, and worsening leverage.
Abandon ship!