Expand Energy Corp. (NASDAQ:EXE)

Return on Equity (ROE) exhibited a significant declining trend between 2021 and 2024. Initially strong, the metric decreased substantially over the observed period, ultimately resulting in a negative value in the most recent year.

ROE Trend

In 2021, ROE stood at 111.59%. This value decreased considerably to 54.10% in 2022, representing a substantial, though not unprecedented, decline. The downward trend continued in 2023, with ROE falling to 22.55%. By 2024, ROE had turned negative, registering at -4.06%.

Net Income Impact

The decline in ROE correlates with the trend in net income. Net income decreased from US$6,328 million in 2021 to US$4,936 million in 2022, then further to US$2,419 million in 2023. The most significant change occurred between 2023 and 2024, with net income becoming a loss of US$-714 million. This shift to a net loss is a primary driver of the negative ROE in 2024.

Stockholders’ Equity Impact

Stockholders’ equity increased consistently from US$5,671 million in 2021 to US$17,565 million in 2024. While increasing equity generally provides a larger base for generating returns, the substantial decline in net income overwhelmed this effect, leading to the decreasing ROE and eventual negative value. The increase in equity did not translate into improved profitability.

The combination of decreasing net income and increasing stockholders’ equity resulted in a dramatic reduction in the company’s ability to generate profit from shareholder investments. The negative ROE in 2024 indicates that the company generated a loss relative to the amount of equity invested by shareholders.