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Antero Midstream (AM)
NYSE:AM
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Antero Midstream
(NYSE:AM)
Rating:78Outperform
Price Target:―
Positive Factors
Free Cash Flow
Free cash flow after dividend exceeded expectations by 34.2%.
Processing Volumes
Gross MPLX processing volumes were 2.2% higher than anticipated.
Share Buybacks
Buybacks are expected to provide support for the shares starting in Q4.
Negative Factors
Estimates Revision
Lowering 2024-2025 estimates due to lower assumed water volumes in Q4 and deferral of a second pad from early 2025 to later in the year.
Financial Results
There was a modest shortfall in financial results versus consensus.
Growth Projections
Q3 missed and a 2nd pad deferral by AR further moderates 2025 growth (low-single-digit %).
Antero Midstream (AM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.68B
Dividend Yield4.97%
Average Volume (3M)2.56M
Price to Earnings (P/E)21.1
Beta (1Y)0.63
Revenue Growth5.03%
EPS Growth7.15%
CountryUS
Employees616
SectorEnergy
Sector Strength53
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)0.25
Shares Outstanding479,219,000
10 Day Avg. Volume3,394,412
30 Day Avg. Volume2,562,614
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)2.35
Price to Sales (P/S)0.00
P/FCF Ratio28.05
Enterprise Value/Market Cap0.72
Enterprise Value/Revenue1.34
Enterprise Value/Gross Profit8.21
Enterprise Value/Ebitda1.69
Forecast
1Y Price Target
$17.00Price Target Upside-5.24% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering2
Antero Midstream Business Overview & Revenue Model
Company DescriptionAntero Midstream Corporation owns, operates, and develops midstream energy infrastructure. It operates through Gathering and Processing, and Water Handling segments. The Gathering and Processing segment includes a network of gathering pipelines and compressor stations that collects and processes production from Antero Resources' wells in West Virginia and Ohio. The Water Handling segment delivers fresh water; and offers pumping stations, water storage, and blending facilities. The company was incorporated in 2013 and is headquartered in Denver, Colorado.
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 Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 8.40%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call was positive overall, with strong financial performance, strategic positioning for future natural gas demand, and successful debt reduction and share repurchases. However, there are some concerns about the propane market and uncertainty in capital allocation strategies.Q1-2025 Updates
Positive Updates
Compressor Station Reuse Savings
The Torrey's Peak Compressor Station was placed online ahead of schedule, with reuse savings totaling approximately $30 million and over $50 million across all three stations. Additional reuse savings of over $60 million are expected over the next five years.
First Quarter Financial Performance
Antero Midstream generated $274 million of EBITDA, a 3% increase year-over-year, and set a company record with 1.65 Bcf a day of processing volumes. Free cash flow after dividends was $79 million, a 7% increase year-over-year.
Debt Reduction and Share Repurchases
The company reduced its leverage to 2.9 times and repurchased over $29 million of shares during the quarter. Antero Midstream has the capacity to allocate 65% of its EBITDA for dividends, debt reduction, and share repurchases.
Strategic Positioning for Natural Gas Demand
Antero Midstream is well positioned with significant infrastructure and an investment-grade upstream counterparty to benefit from the growing natural gas demand in the Appalachian Region, particularly for power generation and data centers.
Negative Updates
Potential Risks in Propane Market
Concerns were discussed regarding the potential impact of tariffs on China's propane imports and the possibility of increased naphtha cracking. However, the company remains confident in the long-term outlook for propane.
Uncertain M&A and Capital Allocation Strategy
While Antero Midstream is well positioned for M&A opportunities, there is some uncertainty around future capital allocation strategies, particularly regarding debt reduction and share repurchases, as well as potential bolt-on acquisitions.
Data Center Commercialization Details
Although discussions are ongoing, there is limited concrete information available on how Antero Midstream will benefit from the trend of increasing data center demand in the Appalachian Region.
Company Guidance
During Antero Midstream's First Quarter 2025 Earnings Call, they provided comprehensive guidance on their financial performance and strategic outlook. The company reported a 3% year-over-year increase in EBITDA, reaching $274 million, driven by record gathering and processing volumes of 1.65 Bcf per day. They also emphasized ongoing capital efficiency, with first-quarter free cash flow after dividends recorded at $79 million, a 7% increase year-over-year, marking the 11th consecutive quarter of positive free cash flow. Antero Midstream highlighted significant reuse savings of $30 million from their newly online Torrey's Peak Compressor Station, contributing to over $50 million in savings across three stations. They projected over $60 million in additional reuse savings over the next five years. The company also maintained a focus on reducing leverage, which declined to 2.9 times, and highlighted their strategic allocation of capital toward dividends, debt reduction, and share repurchases, with 65% of EBITDA earmarked for such returns. They anticipate low to mid-single digit growth in gathering volumes for 2025, with future projects supporting long-term natural gas demand growth in the Appalachian region.Antero Midstream Financial Statement Overview
Summary
Antero Midstream exhibits strong profitability and cash generation with stable margins and substantial free cash flow growth. Although revenue growth is minimal and leverage is high, the company effectively utilizes equity to generate returns. The financial position is stable, but attention to debt levels is warranted.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 | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.19B | 1.18B | 1.11B | 990.66M | 968.87M | 971.39M |
| Gross Profit | 761.68M | 748.22M | 692.37M | 607.97M | 149.90M | 626.54M |
| EBITDA | 895.15M | 966.51M | 824.95M | 836.34M | 803.94M | 148.43M |
| Net Income | 417.70M | 400.89M | 371.79M | 326.24M | 331.62M | -122.53M |
Balance Sheet | ||||||
| Total Assets | 5.75B | 5.76B | 5.74B | 5.79B | 5.54B | 5.61B |
| Cash, Cash Equivalents and Short-Term Investments | 0.00 | 0.00 | 66.00K | 0.00 | 0.00 | 640.00K |
| Total Debt | 3.11B | 3.12B | 3.21B | 3.36B | 3.12B | 3.09B |
| Total Liabilities | 3.66B | 3.65B | 3.59B | 3.60B | 3.26B | 3.19B |
| Stockholders Equity | 2.09B | 2.12B | 2.15B | 2.19B | 2.29B | 2.42B |
Cash Flow | ||||||
| Free Cash Flow | 836.92M | 601.65M | 595.06M | 183.95M | 476.93M | 595.45M |
| Operating Cash Flow | 832.38M | 843.99M | 779.06M | 699.60M | 709.75M | 753.38M |
| Investing Cash Flow | -237.88M | -242.73M | -183.21M | -493.83M | -233.24M | -219.23M |
| Financing Cash Flow | -620.58M | -601.33M | -595.79M | -205.78M | -477.15M | -534.75M |
Antero Midstream Technical Analysis
Neutral
17.94
Price Trends
18.23
Negative
17.46
Positive
16.20
Positive
Market Momentum
>-0.01
Positive
41.11
Neutral
16.20
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AM, the sentiment is Neutral. The current price of 17.94 is below the 20-day moving average (MA) of 18.37, below the 50-day MA of 18.23, and above the 200-day MA of 16.20, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 41.11 is Neutral, neither overbought nor oversold. The STOCH value of 16.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AM.
Antero Midstream Peers Comparison
Overall Rating
UnderperformOutperform
Sector (71)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $8.68B | 21.07 | 19.71% | 4.97% | 5.03% | 7.15% | |
74 Outperform | $14.85B | 11.64 | 39.79% | 9.35% | 11.48% | -5.67% | |
74 Outperform | $10.76B | 28.97 | 8.29% | 3.10% | 10.83% | -10.47% | |
71 Outperform | ¥342.21B | 12.20 | 9.89% | 3.68% | 1.57% | 0.48% | |
64 Neutral | $2.34B | 14.64 | 542.39% | 10.15% | -8.79% | 7.75% | |
62 Neutral | $8.03B | 15.02 | 49.74% | 7.43% | 8.77% | 15.22% | |
45 Neutral | $474.58M | 5.86 | -28.13% | ― | -4.69% | -418.50% |
* Energy Sector Average
Performance Comparison
AM
Antero Midstream
17.94
4.14
30.00%
WES
Western Midstream Partners
38.77
0.00
0.00%
SMC
Summit Midstream
24.53
-9.47
-27.85%
DKL
Delek Logistics
43.75
7.64
21.16%
HESM
Hess Midstream Partners
37.83
3.36
9.75%
DTM
DT Midstream
104.80
37.73
56.25%
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
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.