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Kodiak Gas Services, Inc. (KGS)
:KGS
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Kodiak Gas Services, Inc.
(NYSE:KGS)
Rating:67Neutral
Price Target:
$35.00
▲(10.79% Upside)
Positive Factors
Demand and Supply Conditions
Kodiak Gas Services is expected to continue benefiting from tight supply, strong demand tailwinds, and margin expansion.
Financial Performance
Kodiak Gas Services achieved higher contract services gross margin than expected in the fourth quarter.
Growth Strategy
The company's aggressive growth strategy is endorsed, supported by a capital allocation framework allowing for higher capex intensity than peers.
Negative Factors
Guidance and Projections
KGS reported a slight miss on its FY25 outlook compared to Mizuho estimates.
Market Expectations
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. (KGS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.78B
Dividend Yield5.44%
Average Volume (3M)1.23M
Price to Earnings (P/E)60.0
Beta (1Y)0.87
Revenue Growth45.41%
EPS Growth-37.84%
CountryUS
Employees1,300
SectorEnergy
Sector Strength51
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.33
Shares Outstanding87,859,200
10 Day Avg. Volume1,279,550
30 Day Avg. Volume1,225,501
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.18
Enterprise Value/Revenue4.75
Enterprise Value/Gross Profit12.43
Enterprise Value/Ebitda10.69
Forecast
1Y Price Target
$42.40Price Target Upside34.22% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
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. 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. Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -6.09%|
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. Financial Statement Overview
Summary
Kodiak Gas Services, Inc. exhibits strong revenue growth and operational efficiency, with solid profitability margins. The balance sheet is healthy, characterized by low leverage and a strong equity base, contributing to financial stability. Cash flow generation is robust, though improvements in converting net income to free cash flow would enhance liquidity further.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.85
Very Positive
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.78
Positive
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.70
Positive
| 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 |
| EBITDA | 533.32M | 440.52M | 483.93M | 389.73M | 314.06M |
| Net Income | 49.90M | 20.07M | 106.27M | 180.96M | -2.19M |
Balance Sheet | |||||
| Total Assets | 4.44B | 3.24B | 3.21B | 3.01B | 3.30B |
| Cash, Cash Equivalents and Short-Term Investments | 4.75M | 5.56M | 20.43M | 28.80M | 24.11M |
| Total Debt | 2.65B | 1.83B | 2.73B | 1.85B | 1.90B |
| 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
Neutral
31.59
Price Trends
33.03
Negative
33.77
Negative
36.35
Negative
Market Momentum
-0.44
Negative
47.23
Neutral
32.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KGS, the sentiment is Neutral. The current price of 31.59 is above the 20-day moving average (MA) of 31.43, below the 50-day MA of 33.03, and below the 200-day MA of 36.35, indicating a neutral trend. The MACD of -0.44 indicates Negative momentum. The RSI at 47.23 is Neutral, neither overbought nor oversold. The STOCH value of 32.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KGS.
Kodiak Gas Services, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $291.82M | 17.21 | 6.77% | ― | 22.64% | 78.46% | |
74 Outperform | $0.00 | 17.27 | 19.85% | 3.48% | 20.14% | 43.55% | |
69 Neutral | $1.15B | 5.75 | 15.64% | ― | 72.10% | ― | |
68 Neutral | $864.28M | 18.18 | 3.27% | ― | -8.19% | ― | |
67 Neutral | $2.78B | 60.03 | 3.88% | 5.44% | 45.41% | -37.84% | |
64 Neutral | $0.00 | 34.97 | 148.57% | 8.98% | 10.03% | 65.28% | |
56 Neutral | C$4.11B | -0.16 | 0.41% | 6.50% | 5.42% | -66.54% |
* Energy Sector Average
Performance Comparison
KGS
Kodiak Gas Services, Inc.
31.59
6.10
23.93%
INVX
Innovex International
16.61
1.62
10.81%
AROC
Archrock
22.00
4.13
23.11%
HLX
Helix Energy
6.07
-4.00
-39.72%
NGS
Natural Gas Services Group
24.31
5.54
29.52%
USAC
USA Compression
23.38
3.36
16.78%
Kodiak Gas Services, Inc. Corporate Events
Dividends
Kodiak Gas Services Announces Quarterly Dividend Payment
Positive
Jul 25, 2025
On July 24, 2025, Kodiak Gas Services, Inc. announced a quarterly cash dividend of $0.45 per share of common stock, payable on August 14, 2025, to stockholders of record as of August 4, 2025. Additionally, its subsidiary, Kodiak Gas Services, LLC, declared a similar distribution for its unitholders. This announcement highlights the company’s commitment to returning value to its shareholders and maintaining strong financial health, potentially reinforcing its position in the energy sector.
The most recent analyst rating on (KGS) stock is a Buy with a $51.00 price target. To see the full list of analyst forecasts on Kodiak Gas Services, Inc. stock, see the KGS Stock Forecast page.
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.