Thesis
Range Resources Corporation (NYSE: RRC) merits a bullish stance. The stock trades at a forward P/E of 9.57x despite generating $301 million in free cash flow (TTM) and holding 18.13 trillion cubic feet equivalent (Tcfe) of proved reserves as of December 31, 2024. Strong momentum—27.7% 52-week gain and high free cash conversion—combined with low leverage (debt/equity 33.5%) and tailwinds from natural gas demand in power generation and AI data centers support further upside toward and beyond the $41 resistance level.
Financial Health
Range Resources has delivered consistent revenue growth, solid profitability and robust cash flows, while maintaining conservative leverage.
| Metric | Value | Period/Date |
|---|---|---|
| Market Capitalization | $9.47 billion | 10/02/2025 |
| Revenue (TTM) | $2.80 billion | Q2 2025 |
| Net Income (TTM) | $478.65 million | Q2 2025 |
| Profit Margin | 17.15% | TTM |
| Return on Equity | 12.02% | TTM |
| P/E Ratio (TTM) | 19.96× | 10/02/2025 |
| Forward P/E | 9.57× | Consensus |
| Debt/Equity | 33.54% | MRQ |
| Levered Free Cash Flow (TTM) | $301.18 million | TTM |
| Total Cash | $0.13 million | MRQ |
| Dividend Yield | 0.96% | Current |
| Beta | 0.56 | 5-Year Monthly |
Range’s TTM revenue of $2.8 billion and net income margin of 17.2% compare favorably to mid-cap peers (average ~12%). Forward P/E under 10× implies market expectations of >50% earnings growth over the next year. Despite minimal cash on the balance sheet, levered free cash flow of $301 million covers interest and dividends, and deleverages the $3.2 billion of long-term debt.
Natural gas by Martin Adams
Competitive Position
As the largest acreage holder in the Marcellus Shale, Range enjoys low operating costs and scale advantages that underpin its competitive moat.
• Proven reserves of 18.13 Tcfe (64% natural gas, 35% NGLs) as of 12/31/2024.
• Cost per acre averaged <$1,000 vs. $14,000 for late-entrant peers in 2010.
• Industry-leading LOE (lease operating expenses) at ~$0.45/mcfe vs. peer average of ~$0.60/mcfe.
• Barriers to entry include high capital requirements for drilling and hydraulic fracturing technology.
• Demand tailwinds from growing U.S. LNG exports, power generation, and Microsoft- and Google-sized AI/data center power contracts; CFO Mark Scucchi cited “fundamental tailwinds to the gas macro.”
Competitors such as EQT and Chesapeake operate in the same basin but carry higher debt/equity ratios (~50–60%) and weaker free cash flow conversion. Range’s focus on dry gas and NGLs positions it to capture margin expansion as natural gas prices rebound.
Management and Corporate Governance
Range Resources’ leadership has delivered disciplined execution and transparent stakeholder communication.
• CEO Dennis Degner, with over a decade in senior operational roles, is steering the company toward data center power partnerships.
• CFO Mark Scucchi emphasizes free cash flow growth and balance-sheet strength; the company has maintained an average debt/equity below 35% over the past three years.
• Corporate culture built on innovation—voluntary ambient air monitoring and public frack-fluid disclosure—aligns with stakeholder expectations.
• Long-standing equity awards to employees (25+ years) foster alignment between staff and shareholders.
• Board composition and governance practices carry no significant red flags; ESG initiatives in air monitoring and community grants enhance transparency.
Risks and Opportunities
A balanced view of key upside drivers and risk factors:
Market Risks
• Commodity Price Volatility: A 14.6% one-week drop on 03/31/2025 underscores sensitivity to natural gas prices.
• Resistance Level at $41.00: Multiple near-term failures to clear this level may cap short-term gains.
Operational & Regulatory Risks
• Environmental Scrutiny: Historical water and air pollution allegations could lead to higher compliance costs.
• High Volatility: Five-week volatility is elevated, requiring investors to tolerate swings of ±6–9%.
Growth Opportunities
• AI/Data Center Contracts: Securing large-scale power deals could drive incremental production and revenues.
• LNG Export Expansion: U.S. export capacity growth could lift regional price realizations for Appalachian gas.
• Share Buybacks: Management has room to repurchase stock below intrinsic value, accreting to EPS.
TL;DR
Range Resources is attractively valued at a forward P/E of 9.6×, backed by $301 million in free cash flow (TTM), low leverage (33.5% debt/equity), and 18.13 Tcfe of reserves. Its cost-advantaged Marcellus position, strong profitability (17.2% margin), and strategic pivot to AI/data center power contracts support a bullish thesis. Near-term volatility and the $41 resistance level present trading friction, but long-term demand fundamentals for natural gas and clear management discipline underpin further upside.
