EXE

We rate EXPAND ENERGY Corp (EXE) as a Reduce with a composite score of 47.9/100 at a current price of $104.99. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in stability (82th percentile) and value (56th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (17th percentile) and momentum (25th percentile) tempers our overall conviction. We assign a Narrow Moat rating (60/100), Low uncertainty, and Standard capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

EXPAND ENERGY Corp holds a top-quartile position (#0 of 50) within the Mining sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 47.9/100 places it at rank #2339 in our full 7,333-stock universe. With a $14.3B market capitalization, EXPAND ENERGY Corp operates at meaningful scale within the Mining sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 487%, though momentum at the 25th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 38% (-5.7pp vs sector) narrow to operating margins of 6% (-6.6pp vs sector) and net margins of 3.9%, yielding a gross-to-net conversion rate of 10%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $104.99, EXPAND ENERGY Corp is trading near fair value based on current fundamentals. Our value factor score of 56/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 22.3x (a 63% premium to the sector median of 13.7x), EV/EBITDA of 16.0x (at a premium), P/B of 1.4x, P/S of 2.7x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Low uncertainty rating to EXPAND ENERGY Corp. The company exhibits strong financial stability with a beta of 0.50, conservative leverage (27% D/E), and a stability factor in the 82th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: low beta of 0.50 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 82th percentile and quality factor at the 49th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (27% D/E) limits balance sheet risk; above-average stability (82th percentile) suggests predictable business dynamics; a 3.00% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate EXPAND ENERGY Corp's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 6.2%, and the balance sheet is managed within acceptable parameters (D/E: 27%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; EXPAND ENERGY Corp falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 3.00% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, EXPAND ENERGY Corp receives a Reduce rating with a composite score of 47.9/100 (rank #2339 of 7,333). Our quantitative framework assigns a Narrow Moat (60/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 46/100.

Our analysis does not support a constructive view on EXPAND ENERGY Corp at this time. The combination of the current quantitative profile, low uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.