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Antero Midstream (AM)
NYSE:AM
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Antero Midstream
(NYSE:AM)
80Outperform
Positive Factors
Corporate Actions
Buybacks are expected to provide support for the shares starting in Q4.
Financial Performance
Free cash flow after dividend exceeded expectations by 34.2%.
Operational Performance
Gross MPLX processing volumes were 2.2% higher than anticipated.
Negative Factors
Capital Expenditure
Total capex was above consensus and estimates, affecting free cash flow per share negatively.
Earnings
Q3 missed and a 2nd pad deferral by AR further moderates 2025 growth (low-single-digit %).
Revenue and Guidance
AM also lowered net income guidance by $25MM.
Antero Midstream (AM) vs. S&P 500 (SPY)
Market Cap
$8.52B
Dividend Yield5.06%
Average Volume (3M)4.12M
Price to Earnings (P/E)21.6
Beta (1Y)0.82
Revenue Growth5.79%
EPS Growth7.52%
CountryUS
Employees616
SectorEnergy
Sector Strength85
IndustryFossil Fuels
Share Statistics
EPS (TTM)0.82
Shares Outstanding478,606,000
10 Day Avg. Volume4,944,587
30 Day Avg. Volume4,116,260
Financial Highlights & Ratios
PEG Ratio2.87
Price to Book (P/B)N/A
Price to Sales (P/S)7.24
Price to Cash Flow (P/CF)9.20
P/FCF Ratio9.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.33Price Target Upside-8.26% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering3
Antero Midstream Business Overview & Revenue Model
Company DescriptionAntero Midstream Corp. owns, operates and develops midstream energy assets to service Antero Resources production and completion activity. It operates through the following segments: Gathering and Processing and Water Handling. The Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collect and process production from Antero Resources wells in West Virginia and Ohio. The gathering and processing segment also includes equity in earnings from the Company's investments in the Joint Venture and Stonewall. The Water Handling segment includes two independent systems that deliver fresh water from sources including the Ohio River, local reservoirs and several regional waterways. The company was founded on September 23, 2013 and is headquartered in Denver, CO.
How the Company Makes MoneyAntero Midstream makes money through a variety of revenue streams centered around its midstream services. The company earns revenue primarily from long-term, fixed-fee contracts with Antero Resources, which provide stable cash flows and mitigate commodity price exposure. Key revenue streams include gathering and compression fees, which are charged for transporting natural gas from production sites to processing facilities. Additionally, Antero Midstream generates income from water handling services, including the delivery and treatment of water used in hydraulic fracturing. The company's strategic partnerships and infrastructure investments further enhance its ability to meet the growing demand for midstream services in the Appalachian region, thereby contributing to its earnings.
Antero Midstream Financial Statement Overview
Summary
Antero Midstream demonstrates strong profitability with a high net profit margin and significant free cash flow growth. However, limited revenue growth and high leverage indicate areas of concern, offset by effective equity usage and stable financial metrics.Income Statement
Antero Midstream shows strong profitability with a consistent gross profit margin reaching 100% in the latest year. The net profit margin improved to 36.24%, indicating efficient cost management. Revenue experienced a slight decline of 0.56% from the previous year, but EBIT and EBITDA margins are solid at 59.61%. Overall, profitability metrics are robust, though revenue growth is stagnant.85
Very Positive
Balance Sheet
The debt-to-equity ratio is high at 1.47, indicating significant leverage. However, return on equity improved to 18.95%, reflecting effective use of equity to generate profits. The equity ratio stands at 36.71%, suggesting moderate financial stability. While leverage is a concern, profitability offsets some risks.77
Positive
Cash Flow
Free cash flow grew by 41.86% over the past year, demonstrating strong cash generation. The operating cash flow to net income ratio is 2.10, indicating substantial cash inflows relative to net income. The free cash flow to net income ratio is 2.11, reflecting solid free cash flow relative to earnings. Overall, cash flow metrics highlight strong liquidity and cash generation capabilities.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.11B | 1.11B | 990.66M | 234.16M | 971.39M | Gross Profit |
| 1.11B | 899.13M | 607.97M | 149.90M | 626.54M | EBIT |
| 659.17M | 611.86M | 539.47M | 128.52M | 645.36M | EBITDA |
| 966.32M | 824.95M | 836.34M | 803.94M | 148.43M | Net Income Common Stockholders |
| 400.89M | 371.79M | 326.24M | 78.63M | -122.53M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 0.00 | 66.00K | 0.00 | 0.00 | 640.00K | Total Assets |
| 5.76B | 5.74B | 5.79B | 5.54B | 5.61B | Total Debt |
| 3.12B | 3.21B | 3.36B | 3.12B | 3.09B | Net Debt |
| 3.12B | 3.21B | 3.36B | 3.12B | 3.09B | Total Liabilities |
| 3.65B | 3.59B | 3.60B | 3.26B | 3.19B | Stockholders Equity |
| 2.12B | 2.15B | 2.19B | 2.29B | 2.42B |
| Cash Flow | Free Cash Flow | |||
| 843.99M | 595.06M | 183.95M | 476.93M | 595.45M | Operating Cash Flow |
| 843.99M | 779.06M | 699.60M | 709.75M | 753.38M | Investing Cash Flow |
| -242.73M | -183.21M | -493.83M | -233.24M | -219.23M | Financing Cash Flow |
| -601.33M | -595.79M | -205.78M | -477.15M | -534.75M |
Antero Midstream Technical Analysis
Positive
17.80
Price Trends
16.41
Positive
15.69
Positive
14.96
Positive
Market Momentum
0.39
Negative
68.81
Neutral
93.87
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AM, the sentiment is Positive. The current price of 17.8 is above the 20-day moving average (MA) of 16.87, above the 50-day MA of 16.41, and above the 200-day MA of 14.96, indicating a bullish trend. The MACD of 0.39 indicates Negative momentum. The RSI at 68.81 is Neutral, neither overbought nor oversold. The STOCH value of 93.87 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AM.
Antero Midstream Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
85 Outperform | $54.91B | 12.76 | 31.78% | 6.73% | 4.30% | 10.45% | |
80 Outperform | $15.74B | 10.27 | 50.12% | 8.48% | 16.06% | 54.94% | |
80 Outperform | $8.52B | 21.58 | 18.79% | 5.06% | 5.79% | 7.52% | |
77 Outperform | $63.82B | 14.48 | 13.40% | 6.91% | 5.20% | 18.35% | |
66 Neutral | $62.02B | 19.20 | 18.11% | 4.03% | 24.16% | -6.58% | |
61 Neutral | $6.72B | 63.80 | 7.26% | 3.75% | -5.94% | -63.96% | |
57 Neutral | $8.68B | 5.51 | -6.00% | 7.48% | -0.09% | -74.90% |
* Energy Sector Average
Performance Comparison
AM
Antero Midstream
17.80
4.76
36.50%
ET
Energy Transfer
18.60
4.16
28.81%
OKE
Oneok
99.34
23.52
31.02%
WES
Western Midstream Partners
41.27
9.79
31.10%
MPLX
MPLX
53.70
16.14
42.97%
ENLC
EnLink Midstream
14.12
1.21
9.37%
Antero Midstream Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 12.30% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call highlights Antero Midstream's strong financial performance in 2024, including record EBITDA and free cash flow, alongside significant debt reduction and share repurchases. The company is optimistic about 2025, projecting further EBITDA growth and increased free cash flow. However, there are challenges, including the unresolved Veolia lawsuit and limited growth in water volumes. Overall, the sentiment is positive with a focus on financial growth and efficiency.Highlights
Record EBITDA and ROIC in 2024
Antero Midstream Corporation generated $1.05 billion in EBITDA in 2024, marking the tenth consecutive year of EBITDA growth. Additionally, the company achieved a record ROIC of 19%.
Significant Free Cash Flow Growth
The company reported $250 million in free cash flow after dividends for the full year 2024, a company record, representing a 91% year-over-year increase in free cash flow for the fourth quarter.
Debt Reduction and Share Repurchases
Antero Midstream reduced debt by over $50 million during the fourth quarter and achieved its leverage target. The company also commenced a share repurchase program, buying back nearly $30 million in shares.
Capital Budget and Efficiency Initiatives
For 2025, the company has budgeted $170 million to $200 million in capital expenditures, emphasizing efficiency with projects like the Torrey Speed compressor station, which saved approximately $25 million.
Positive 2025 Outlook
The company forecasts mid-single-digit EBITDA growth and expects to generate $250 million to $300 million in free cash flow after dividends in 2025, a 10% increase year-over-year at the midpoint.
Lowlights
Veolia Lawsuit and Uncertain Outcome
There is ongoing uncertainty regarding the Veolia lawsuit, with potential implications on cash flow dependent on the outcome of the appeal process.
Limited Growth in Water Volumes
Water volumes are expected to remain similar year-over-year in 2025, with no significant increase anticipated despite servicing more wells.
Company Guidance
During the Antero Midstream Corporation Fourth Quarter 2024 Earnings Call, the company provided guidance on several key metrics for 2025. They reported an EBITDA of $1.05 billion for 2024 and forecast continued growth in 2025 driven by throughput increases, projecting mid-single-digit EBITDA growth. The 2025 capital budget is set between $170 million and $200 million, with $100 million allocated to organic capital and $15 million to Stonewall joint venture investments. Antero Midstream expects to generate $250 million to $300 million in free cash flow after dividends, marking a 10% increase year over year at the midpoint. The company plans to maintain a $0.90 per share dividend and focus on share repurchases and debt reduction using the remaining free cash flow.Antero Midstream Corporate Events
Stock BuybackDividendsFinancial Disclosures
Antero Midstream Declares Dividend and Plans Earnings Release
Positive
Jan 14, 2025
On January 14, 2025, Antero Midstream Corporation announced a cash dividend of $0.225 per share for the fourth quarter of 2024, payable on February 12, 2025. The company also repurchased approximately 1.9 million shares worth around $28.7 million during the same quarter, leaving $471 million of share repurchase capacity under its $500 million authorized program. Additionally, Antero Midstream plans to release its fourth-quarter 2024 earnings on February 12, 2025, with a conference call scheduled for February 13, 2025, to discuss the financial results.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.