Filing Flows › Companies › EOG Resources › Analysis traps
EOG Resources (EOG): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 2026, to Sep 30, 2026, filed Nov 5, 2026; rules v1.1
EOG Resources (EOG): 1 rule of 10 triggered on the filings to Sep 30, 2026: low P/E at a cyclical peak = undervalued. 1 to review; 1 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Low P/E at a cyclical peak = undervalued Triggered · severity medium · confidence medium
The shares trade at 9.2× this year's net income of $8.2B, but that profit is at a high: the median of the last eight fiscal years is $5.0B, on which the same market value is 15.2×. A low multiple of peak profit is not a low multiple of normal profit.
Innocent reading: The business has changed for good (a merger, a new line, a pricing regime) and the old years are not its normal.
A precise DCF value = the true value To review · confidence high
The DCF's point value is 723.17 a share (price 144.89); 86% of it is the terminal value, a number about years no one has seen. Moving wacc by ±1 pt alone takes it from 576.86 to 962.02; across every method the research ran the range is -161 to 2,146. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence high
Free cash flow did not rise ($6.8B → $3.9B): the trap does not arise.
The figures and how they are read
| Fiscal year before | FY2024 |
| Fiscal year | FY2025 |
| Operating cash flow, year before | $12.1B |
| Operating cash flow | $10.0B |
| Capex, year before | $5.4B |
| Capex | $6.1B |
| Free cash flow, year before | $6.8B |
| Free cash flow | $3.9B |
| Change in FCF | −$2.9B |
| Change in capex | $762M |
| Working capital: change in its cash contribution | −$1.7B |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY2025 (cash flow statement, fiscal year) · FY2024 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 1.0% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY2025 |
| Stock compensation | $216M |
| Revenue | $22.6B |
| SBC / revenue | +0.9% |
| Buybacks | $2.6B |
| Buybacks / SBC | 11.9 |
| Diluted shares, year before | 569.0M shares |
| Diluted shares | 546.0M shares |
| Diluted shares: change | -4.0% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY2025 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 48% against revenue 46% in Q3 2026; DSO 40 against a median of 42: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 2026 |
| Revenue, year over year | +46.2% |
| Receivables, year over year | +47.6% |
| Quarter before | Q2 2026 |
| Revenue y/y, quarter before | +57.4% |
| Receivables y/y, quarter before | +40.9% |
| Days sales outstanding | 40.3 |
| DSO, median of eight quarters | 41.8 |
| Receivables | $4.0B |
| Revenue | $8.5B |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 2026 (receivables and revenue) · Q3 2025 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Not triggered confidence medium
$28M comes due within a year, 487.8× covered by cash and investments of $5.7B plus $7.9B of free cash flow.
The figures and how they are read
| Cash and investments | $5.7B |
| Debt | $7.9B |
| Net debt | $2.2B |
| Due within a year | $28M |
| Read from | the current portion of debt on the balance sheet |
| Free cash flow, twelve months | $7.9B |
| Cash plus free cash flow | $13.7B |
| Coverage of what is due | 487.8 |
| Due in the second year | 0 |
| Balance sheet date | 2026-09-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY2025 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 97% and net income rose 89% in Q3 2026; the share count fell 4.0%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q3 2026 |
| Quarter before | Q3 2025 |
| EPS, year before | $2.70 |
| EPS | $5.33 |
| Net income, year before | $1.5B |
| Net income | $2.8B |
| Diluted shares, year before | 544.0M shares |
| Diluted shares | 522.0M shares |
| EPS growth | +97.0% |
| Net income growth | +89.1% |
| Diluted shares: change | -4.0% |
| eps from profit | $2.41 |
| eps from share count | $0.22 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q3 2026 (net income, diluted shares, EPS) · Q3 2025 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Triggered severity medium · confidence medium
The shares trade at 9.2× this year's net income of $8.2B, but that profit is at a high: the median of the last eight fiscal years is $5.0B, on which the same market value is 15.2×. A low multiple of peak profit is not a low multiple of normal profit.
The figures and how they are read
| market value | $75.6B |
| net income ttm | $8.2B |
| pe ttm | 9.20 |
| net income median fy | $5.0B |
| pe mid cycle | 15.20 |
| net income peak fy | $7.8B |
| years | FY2018 / 3419.0; FY2019 / 2735.0; FY2020 / -605.0; FY2021 / 4664.0; FY2022 / 7759.0; FY2023 / 7594.0; FY2024 / 6403.0; FY2025 / 4980.0 |
| down years in window | 5 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q3 2026 (net income, trailing twelve months)
What would explain it innocently
- The business has changed for good (a merger, a new line, a pricing regime) and the old years are not its normal
- The market is right that profit will fall, and the price already says so
- Capacity has left the industry, so the cycle's trough is higher than before
What to look for in the filing
- Where the industry's prices and volumes stand against their own history
- Capacity on order across the industry
- Management's view of the cycle in the MD&A
What would show the trap does not apply
- Profit holds at this level through the next two years (the eight-year peak was a new base, not a top)
- The industry's capacity and prices stay where they are rather than reverting
Look again: next filing.
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 723.17 a share (price 144.89); 86% of it is the terminal value, a number about years no one has seen. Moving wacc by ±1 pt alone takes it from 576.86 to 962.02; across every method the research ran the range is -161 to 2,146. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 723.17 |
| price | 144.89 |
| terminal value share | +85.6% |
| swing by input | WACC / ±1 pt / 576.86 / 962.02; Revenue growth (each year) / ±5 pts / 591.71 / 877.78; Terminal growth / ±0.5 pt / 666.54 / 795.06; Operating margin / ±3 pts / 660.63 / 785.72 |
| range all methods | -161.45; 2145.89 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → EOG Resources: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.