Cheniere Energy Inc. Common Stock (LNG)

FairStock Score: 83/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $2.6 billion in annual free cash flow (4.9% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 58.7% demonstrating efficient capital deployment
• Healthy net profit margin of 11.8% showing consistent profitability
• Revenue growth of 22.9% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($142) with negative 80% margin of safety—limited downside protection
• High leverage at 2.02x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 1.7 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Cheniere Energy Inc. Common Stock is a large-cap energy company valued at $53.8 billion. The business generates $19.5 billion in annual revenue with a 11.8% net margin and $2.6 billion in free cash flow. From a quality standpoint, Cheniere shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and distressed Altman Z-Score of 1.7 warrants caution. On valuation, the stock is attractively valued at 10.7x earnings, with trades above its Graham Number with a negative 80% margin. Growth dynamics show revenue growing at 22.9% and profit growth of 135.6%. Our composite FairStock Score of 79/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Cheniere's 23% revenue growth trajectory could accelerate as it captures additional market share in the energy sector. With $2.6 billion in annual free cash flow (4.9% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 2.0x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer