Education
About Us
Working with TipRanks
Follow Us
Kodiak Gas Services, Inc. (KGS)
NYSE:KGS
Top Page
Kodiak Gas Services, Inc.
(NYSE:KGS)
Rating:65Neutral
Price Target:
$37.00
▲( 6.87% Upside)
Positive Factors
Earnings
Kodiak Gas Services achieved higher contract services gross margin than expected in the fourth quarter.
Growth Strategy
Management remains bullish on associated gas basins as part of its growth strategy despite the recent increase in the gas strip.
Valuation
Current valuation trades at a discount to peers, with potential for re-rating as the market appreciates the compression industry's macro tailwinds and Kodiak's growth outlook.
Negative Factors
Financial Performance
KGS reported a slight miss on its FY25 outlook compared to Mizuho estimates.
Guidance
KGS provided FY25E guidance that slightly missed Street/Mizuho forecasts, despite the fact KGS raised the low-end of the range by +$10mn.
Market Volatility
Kodiak Gas Services has underperformed recently due to oil macro concerns and broader market volatility.
Kodiak Gas Services, Inc. (KGS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.04B
Dividend Yield4.65%
Average Volume (3M)855.15K
Price to Earnings (P/E)65.8
Beta (1Y)0.93
Revenue Growth45.41%
EPS Growth-37.84%
CountryUS
Employees1,300
SectorEnergy
Sector Strength46
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.33
Shares Outstanding87,859,200
10 Day Avg. Volume938,113
30 Day Avg. Volume855,150
Financial Highlights & Ratios
PEG Ratio0.60
Price to Book (P/B)2.26
Price to Sales (P/S)0.00
P/FCF Ratio-349.62
Enterprise Value/Market Cap1.90
Enterprise Value/Revenue1.41
Enterprise Value/Gross Profit13.11
Enterprise Value/Ebitda3.02
Forecast
1Y Price Target
$44.71Price Target Upside29.15% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Kodiak Gas Services, Inc. Business Overview & Revenue Model
Company DescriptionKodiak Gas Services, Inc. operates contract compression infrastructure for customers in the oil and gas industry in the United States. It operates in two segments, Compression Operations and Other Services. The Compression Operations segment operates company-owned and customer-owned compression infrastructure to enable the production, gathering, and transportation of natural gas and oil. The Other Services segment provides a range of contract services, including station construction, maintenance and overhaul, and other ancillary time and material-based offerings. The company was formerly known as Frontier TopCo, Inc. Kodiak Gas Services, Inc. was founded in 2010 and is based in Montgomery, Texas. Kodiak Gas Services, Inc. operates as a subsidiary of Frontier Topco Partnership, L.P.
How the Company Makes MoneyKodiak Gas Services, Inc. primarily makes money through long-term service contracts with oil and gas companies. These contracts involve the leasing and maintenance of compression equipment, which is crucial for the transportation and processing of natural gas. Revenue streams are largely driven by equipment rentals and associated maintenance services, which often include regular inspections, repairs, and technical support to ensure optimal performance. Additionally, Kodiak may engage in strategic partnerships with energy companies to enhance service offerings and expand market reach, contributing to its revenue growth. Other contributing factors to its earnings may include value-added services and potential expansion into related sectors or regions to capture new market opportunities.
Kodiak Gas Services, Inc. Financial Statement Overview
Summary
Kodiak Gas Services, Inc. demonstrates strong revenue growth and improved profitability. The balance sheet reflects reduced leverage and increased equity, enhancing financial stability. However, the negative free cash flow due to high capital expenditures requires careful management to ensure sustainable growth.Income Statement
Kodiak Gas Services, Inc. has demonstrated strong revenue growth, increasing from $532.42 million in 2020 to $1.16 billion in 2024. The net profit margin improved from a negative margin in 2020 to 4.30% in 2024. However, the gross profit margin decreased from 38.97% in 2020 to 100% in 2024, likely due to reclassification of costs. EBIT and EBITDA margins remained strong, indicating efficiency in core operations.72
Positive
Balance Sheet
The company shows a reasonable equity base with stockholders' equity increasing from $755.29 million in 2020 to $1.37 billion in 2024, improving financial stability. However, the debt-to-equity ratio decreased significantly from 2.52 in 2020 to 0.04 in 2024, highlighting a substantial reduction in debt. ROE was positive at 3.63% in 2024, indicating profitability but with room for improvement.68
Positive
Cash Flow
Operating cash flow has been consistently positive, reaching $327.99 million in 2024, but free cash flow turned negative in the same year, at -$8.97 million, primarily due to high capital expenditures. The ratio of operating cash flow to net income is robust at 6.57 in 2024, showing strong cash generation relative to earnings.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.16B | 850.38M | 707.91M | 606.38M | 532.42M | Gross Profit |
| 440.66M | 316.64M | 440.56M | 396.20M | 207.47M | EBIT |
| 249.45M | 249.33M | 222.09M | 188.96M | 168.43M | EBITDA |
| 533.32M | 440.52M | 483.93M | 389.73M | 314.06M | Net Income Common Stockholders |
| 49.90M | 20.07M | 106.27M | 180.96M | -2.19M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.75M | 5.56M | 20.43M | 28.80M | 24.11M | Total Assets |
| 4.44B | 3.24B | 3.21B | 3.01B | 3.30B | Total Debt |
| 2.65B | 1.83B | 2.73B | 1.85B | 1.90B | Net Debt |
| 2.64B | 1.82B | 2.71B | 1.82B | 1.88B | Total Liabilities |
| 3.06B | 2.10B | 2.98B | 2.05B | 2.54B | Stockholders Equity |
| 1.37B | 1.14B | 229.09M | 960.07M | 755.29M |
| Cash Flow | Free Cash Flow | |||
| -8.97M | 46.53M | -39.50M | 48.04M | -53.41M | Operating Cash Flow |
| 327.99M | 266.33M | 219.85M | 249.98M | 243.98M | Investing Cash Flow |
| -292.47M | -218.42M | -251.38M | -202.03M | -296.38M | Financing Cash Flow |
| -36.33M | -62.77M | 23.17M | -43.25M | 73.71M |
Kodiak Gas Services, Inc. Technical Analysis
Negative
34.62
Price Trends
34.99
Negative
38.93
Negative
35.36
Negative
Market Momentum
0.03
Positive
47.44
Neutral
20.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KGS, the sentiment is Negative. The current price of 34.62 is below the 20-day moving average (MA) of 35.04, below the 50-day MA of 34.99, and below the 200-day MA of 35.36, indicating a bearish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 47.44 is Neutral, neither overbought nor oversold. The STOCH value of 20.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KGS.
Kodiak Gas Services, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $4.38B | 20.99 | 17.89% | 2.80% | 20.14% | 43.55% | |
76 Outperform | $302.85M | 17.86 | 6.77% | ― | 22.64% | 78.46% | |
75 Outperform | $971.91M | 5.39 | 13.87% | ― | 72.10% | ― | |
66 Neutral | $930.40M | 11.18 | 5.64% | ― | 0.34% | ― | |
65 Neutral | $3.04B | 65.79 | 3.88% | 4.65% | 45.41% | -37.84% | |
64 Neutral | $2.94B | 37.41 | 148.57% | 8.40% | 10.03% | 65.28% | |
57 Neutral | $7.06B | 3.07 | -3.48% | 5.79% | 0.59% | -50.58% |
* Energy Sector Average
Performance Comparison
KGS
Kodiak Gas Services, Inc.
34.62
9.18
36.08%
INVX
Innovex International
14.09
-4.60
-24.61%
AROC
Archrock
24.78
5.71
29.94%
HLX
Helix Energy
6.14
-5.28
-46.23%
NGS
Natural Gas Services Group
24.17
2.49
11.49%
USAC
USA Compression
25.01
2.97
13.48%
Kodiak Gas Services, Inc. Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 1.44%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
Kodiak Gas Services reported a strong financial performance with record-breaking metrics and increased guidance, although it faces macroeconomic uncertainties and potential tariff impacts. The company's business model remains resilient with high fleet utilization and successful recontracting efforts.Q1-2025 Updates
Positive Updates
Record Financial Performance
Kodiak Gas Services set new records in total revenue ($330 million), adjusted EBITDA (nearly $178 million), and discretionary cash flow for Q1 2025, indicating strong financial performance.
Increased Guidance and Dividend
Kodiak increased its 2025 guidance and announced a quarterly dividend of $0.45 per share, a 10% increase over the prior quarter.
High Fleet Utilization
The company reported a 97% fleet utilization, including 99% utilization of large horsepower equipment, reflecting strong demand in the market.
Successful Recontracting Efforts
Kodiak successfully recontracted a significant amount of horsepower at market rates above the current fleet average, driving an increase in revenue and adjusted gross margin.
Negative Updates
Economic Uncertainty and Tariff Concerns
The company noted volatility in oil prices, tariff uncertainty, and concerns about a potential slowdown in economic growth as macroeconomic challenges.
Potential Tariff Impact
There is potential for price increases due to tariffs on inputs like steel, although Kodiak expects this impact to be minimal.
Company Guidance
During the Kodiak Gas Services First Quarter 2025 Earnings Conference Call, the company provided updated guidance reflecting a positive outlook for the year. Kodiak announced an increased full-year 2025 guidance with adjustments in several key metrics. The company revised its Contract Services adjusted gross margin percentage to 66.5% to 68.5% and raised the midpoint of its adjusted EBITDA and discretionary cash flow guidance. In terms of capital expenditures, Kodiak separated its growth CapEx into growth capital expenditures ($180 million to $205 million) and other capital expenditures ($60 million to $65 million), with maintenance CapEx remaining at $75 million to $85 million. Additionally, Kodiak reported achieving an all-time low leverage of 3.7 times in Q1 2025 and announced a 10% increase in its quarterly dividend to $0.45 per share. The company emphasized its strong start to the year, highlighted by new records in total revenue ($330 million), adjusted EBITDA (just under $178 million), and discretionary cash flow, driven by recontracting efforts and operational efficiencies.Kodiak Gas Services, Inc. Corporate Events
DividendsFinancial Disclosures
Kodiak Gas Services Increases Quarterly Dividend by 10%
Positive
Apr 24, 2025
On April 23, 2025, Kodiak Gas Services, Inc. announced a 10% increase in its quarterly cash dividend to $0.45 per share, payable on May 15, 2025, reflecting the company’s robust business model and stable cash flows. This marks the second dividend increase in a year, underscoring Kodiak’s commitment to returning capital to shareholders. Additionally, Kodiak Gas Services, LLC, a subsidiary, declared a similar distribution for its units. The company will release its first-quarter 2025 financial results on May 7, 2025, followed by a conference call on May 8, 2025.
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.