Kodiak Gas Services, Inc. (KGS) AI Stock Analysis

• Market Cap: $2.85B
• Dividend Yield: 5.55%
• Average Volume (3M): 1.01M
• Price to Earnings (P/E): 61.7
• Beta (1Y): 0.90
• Revenue Growth: 45.41%
• EPS Growth: -37.84%
• Country: US
• Employees: 1,300
• Sector: Energy
• Sector Strength: 55
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.33
• Shares Outstanding: 87,859,200
• 10 Day Avg. Volume: 1,187,405
• 30 Day Avg. Volume: 1,010,871
• PEG Ratio: -0.27
• Price to Book (P/B): 5.14
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -29.81
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 0.87
• Enterprise Value/Gross Profit: 7.99
• Enterprise Value/Ebitda: 1.92
• 1Y Price Target: $42.71
• Price Target Upside: 34.56% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 77 Outperform
• Price Target: $40.00 ▲(26.02%Upside)

Kodiak Gas Services, Inc. scores well due to its strong financial performance, positive earnings guidance, and commitment to shareholder returns through increased dividends. While technical indicators are mixed and the high P/E ratio indicates potential overvaluation, the company's robust business model and operational efficiency provide a solid foundation in the oil & gas equipment & services industry.

Positive Factors

Cost Synergies

The acquisition of CSI Compressco LP provides upside potential through cost synergies, contract alignment, and leveraging Aftermarket Services.

Demand and Supply Dynamics

Kodiak Gas Services is expected to continue benefiting from tight supply, strong demand tailwinds, and margin expansion.

Growth Strategy

Management remains bullish on associated gas basins as part of its growth strategy despite the recent increase in the gas strip.

Negative Factors

Guidance and Forecasts

KGS provided FY25E guidance that slightly missed Street/Mizuho forecasts, despite the fact KGS raised the low-end of the range by +$10mn.

Market Concerns

Kodiak Gas Services has underperformed recently due to oil macro concerns and broader market volatility.

Operational Challenges

Gross margin outlook for FY25 may have been underwhelming due to one-time operational expenses.

Kodiak Gas Services, Inc. Business Overview & Revenue Model

Company Description

Kodiak 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 Money

Kodiak Gas Services, Inc. generates revenue primarily through its service contracts with oil and gas companies. The company offers long-term agreements for the provision of natural gas compression services, which include the rental, operation, and maintenance of compression equipment. These contracts often include performance-based incentives, aligning Kodiak's interests with those of its clients to ensure optimal equipment uptime and efficiency. Additionally, Kodiak may have strategic partnerships with equipment manufacturers and technology providers to enhance its service offerings, although specific details on partnerships are not publicly available.

Kodiak Gas Services, Inc. Financial Statement Overview

Summary

Kodiak Gas Services, Inc. demonstrates robust revenue growth and strong operational efficiency with solid profitability margins. The balance sheet is healthy with low leverage and a strong equity base, contributing to financial stability. Cash flow generation is strong, though there is room for improvement in converting net income to free cash flow.

Income Statement

Kodiak Gas Services, Inc. has demonstrated strong revenue growth with a Revenue Growth Rate of 9.86% in TTM compared to the previous year. The Gross Profit Margin is robust at 38.19%, indicating effective cost management. While the Net Profit Margin is modest at 3.97%, the company shows a healthy EBIT Margin of 23.13% and an EBITDA Margin of 44.43%, reflecting solid operational efficiency. However, there is room for improvement in net profitability.

Balance Sheet

The company's Debt-to-Equity Ratio is low at 0.04, showcasing a strong equity base relative to debt, which is positive for financial stability. Return on Equity is moderate at 3.73%, suggesting reasonable returns for shareholders. The Equity Ratio of 30.56% indicates a balanced capital structure, though there is potential for enhancing asset efficiency.

Cash Flow

Kodiak Gas Services, Inc. has shown positive Free Cash Flow Growth at TTM, and the Operating Cash Flow to Net Income Ratio stands at 7.73, highlighting strong cash generation relative to earnings. However, the Free Cash Flow to Net Income Ratio is lower at 0.72, suggesting some constraints in converting profits into free cash flow, which could be an area for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.27B	1.16B	850.38M	707.91M	606.38M	532.42M
Gross Profit	486.33M	440.66M	316.64M	440.56M	396.20M	207.47M
EBITDA	565.85M	533.32M	440.52M	483.93M	389.73M	314.06M
Net Income	50.56M	49.90M	20.07M	106.27M	180.96M	-2.19M
Balance Sheet
Total Assets	4.44B	4.44B	3.24B	3.21B	3.01B	3.30B
Cash, Cash Equivalents and Short-Term Investments	1.95M	4.75M	5.56M	20.43M	28.80M	24.11M
Total Debt	52.50M	2.65B	1.83B	2.73B	1.85B	1.90B
Total Liabilities	3.08B	3.06B	2.10B	2.98B	2.05B	2.54B
Stockholders Equity	1.36B	1.37B	1.14B	229.09M	960.07M	755.29M
Cash Flow
Free Cash Flow	36.42M	-8.97M	46.53M	-39.50M	48.04M	-53.41M
Operating Cash Flow	390.77M	327.99M	266.33M	219.85M	249.98M	243.98M
Investing Cash Flow	-300.50M	-292.47M	-218.42M	-251.38M	-202.03M	-296.38M
Financing Cash Flow	-97.63M	-36.33M	-62.77M	23.17M	-43.25M	73.71M

Kodiak Gas Services, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 31.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 31.74 is below the 20-day moving average (MA) of 33.73, below the 50-day MA of 34.65, and below the 200-day MA of 36.67, indicating a bearish trend. The MACD of -0.69 indicates Positive momentum. The RSI at 33.24 is Neutral, neither overbought nor oversold. The STOCH value of 6.45 is Positive, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KGS	77 Outperform	$2.85B	61.67	3.88%	5.55%	45.41%	-37.84%
NGS	77 Outperform	$308.61M	18.25	6.77%	―	22.64%	78.46%
INVX	75 Outperform	$1.12B	6.14	13.87%	―	72.10%	―
AROC	75 Outperform	$4.25B	20.35	17.89%	3.16%	20.14%	43.55%
HLX	73 Outperform	$1.04B	12.19	5.64%	―	0.34%	―
USAC	64 Neutral	$2.91B	37.07	148.57%	8.52%	10.03%	65.28%
Sector *	52 Neutral	C$2.90B	-1.06	-3.46%	5.87%	3.01%	-47.13%

Kodiak Gas Services, Inc. Corporate Events

Kodiak Gas Services Increases Quarterly Dividend by 10%

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.