Kinetik (KNTK) AI Stock Analysis

Compare

337 Followers

KNTK Dividends

Top Page

Kinetik

(NYSE:KNTK)

57Neutral

Kinetik Holdings has strong revenue growth and improved cash flow management, bolstered by strategic M&A activities. However, high leverage and equity concerns present financial risks. The technical analysis shows a bearish trend, countered by promising earnings growth and dividends. Valuation remains a concern with a high P/E, but is partially offset by a strong dividend yield. Balancing these factors, the company's overall stock score is impacted by the need for financial stability amidst growth opportunities.

Positive Factors

Growth Outlook

KNTK's internal target to reach ~$2bn/yr of run-rate adj EBITDA by 2030e demonstrates a strong growth outlook.

Performance

KNTK has been a top performer in Midstream, outpacing several peers with impressive year-to-date performance.

Negative Factors

Earnings

Negative Waha prices in early November were a major driver of KNTK's 4Q24 earnings miss.

Guidance

KNTK's initial FY25 guidance was lower than expected, and capex guidance was higher than anticipated.

Kinetik (KNTK) vs. S&P 500 (SPY)

Market Cap

$6.86B

Dividend Yield7.31%

Average Volume (3M)875.64K

Price to Earnings (P/E)42.5

Beta (1Y)0.99

Revenue Growth21.85%

EPS Growth-54.68%

CountryUS

Employees460

SectorEnergy

Sector Strength50

IndustryOil & Gas Midstream

Share Statistics

EPS (TTM)1.01

Shares Outstanding60,922,043

10 Day Avg. Volume939,229

30 Day Avg. Volume875,642

Financial Highlights & Ratios

PEG Ratio0.22

Price to Book (P/B)N/A

Price to Sales (P/S)5.75

Price to Cash Flow (P/CF)9.70

P/FCF Ratio12.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$58.63

Price Target Upside35.56% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering8

Kinetik Business Overview & Revenue Model

Company DescriptionKinetik Holdings Inc. operates as a midstream company in the Texas Delaware Basin. It provides gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water. The company is headquartered in Midland, Texas.

How the Company Makes MoneyKinetik makes money primarily through the fees it charges for its midstream services. The company's revenue model is centered around long-term contracts with oil and gas producers who require infrastructure to transport and process their natural gas and crude oil. Key revenue streams include service fees for natural gas gathering and processing, transportation fees for moving crude oil and natural gas through its pipeline networks, and water management services. Kinetik may also engage in joint ventures or partnerships with other energy companies to expand its infrastructure capabilities and increase its market reach. Additionally, factors such as fluctuating commodity prices, regulatory environments, and production levels in the regions it serves can significantly impact its earnings.

Kinetik Financial Statement Overview

Summary

Kinetik shows strong revenue growth and operational efficiency. However, high leverage and negative equity indicate financial risks. Cash flow management is robust, but income volatility and equity concerns need addressing.

Income Statement

Positive

Kinetik has shown robust revenue growth over the years, with a notable increase from 2023 to 2024. The Gross Profit Margin is strong, reflecting efficient cost management. However, the Net Profit Margin has been inconsistent, showing fluctuations due to varying net income figures. The EBIT and EBITDA margins indicate operational efficiency, but the significant variation in net income across years suggests underlying volatility.

Balance Sheet

Neutral

The company's debt levels are high compared to its equity, reflected in the negative stockholders' equity, indicating high leverage and potential financial risk. Asset growth has been steady, but the negative equity ratio and declining ROE highlight the need for improved financial stability and profitability.

Cash Flow

Positive

Operating cash flow has consistently improved, indicating strong cash generation capabilities. The Free Cash Flow has shown positive growth, especially from 2023 to 2024, signifying effective capital management. The operating cash flow to net income ratio suggests robust cash conversion efficiency, although fluctuations in net income could pose potential risks.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.48B	1.26B	1.21B	662.04M	410.18M
	Gross Profit
538.11M	459.70M	411.63M	184.87M	121.36M
	EBIT
179.23M	159.25M	93.78M	121.09M	-4.63M
	EBITDA
374.23M	644.98M	662.93M	364.27M	99.12M
	Net Income Common Stockholders
244.23M	289.44M	250.72M	1.48M	-1.15B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.61M	4.51M	6.39M	18.73M	19.59M
	Total Assets
6.81B	6.50B	5.92B	3.55B	3.54B
	Total Debt
170.39M	3.60B	3.40B	2.37B	2.39B
	Net Debt
166.78M	3.60B	3.39B	2.35B	2.37B
	Total Liabilities
3.84B	3.87B	3.65B	2.55B	2.50B
	Stockholders Equity
-2.98B	-530.82M	-839.77M	10.00K	937.04M
Cash Flow		Free Cash Flow
361.47M	254.93M	391.43M	152.86M	-96.96M
	Operating Cash Flow
637.35M	584.48M	613.01M	235.57M	102.10M
	Investing Cash Flow
-176.89M	-686.32M	-286.13M	-99.62M	-505.59M
	Financing Cash Flow
-461.36M	99.96M	-339.21M	-136.81M	372.77M

Kinetik Technical Analysis

Technical Analysis Sentiment

Negative

Last Price43.25

Price Trends

50DMA

51.52

Negative

100DMA

55.54

Negative

200DMA

50.69

Negative

Market Momentum

MACD

-2.90

Negative

RSI

39.44

Neutral

STOCH

45.40

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KNTK, the sentiment is Negative. The current price of 43.25 is below the 20-day moving average (MA) of 45.58, below the 50-day MA of 51.52, and below the 200-day MA of 50.69, indicating a bearish trend. The MACD of -2.90 indicates Negative momentum. The RSI at 39.44 is Neutral, neither overbought nor oversold. The STOCH value of 45.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KNTK.

Kinetik Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AM	80 Outperform	$8.01B	20.28	18.79%	5.40%	5.79%	7.52%
HESM	74 Outperform	$8.54B	14.93	51.23%	7.23%	10.89%	19.50%
DTM	74 Outperform	$9.71B	26.57	8.08%	3.16%	6.40%	-8.42%
PAA	73 Outperform	$12.49B	24.24	7.56%	7.54%	3.28%	-47.59%
DKL	62 Neutral	$2.04B	12.71	401.61%	11.64%	-7.82%	3.44%
KNTK	57 Neutral	$6.86B	42.49	-8.21%	7.31%	21.85%	-54.68%
Sector *	55 Neutral	$7.12B	3.39	-6.24%	6.01%	-0.03%	-52.30%

* Energy Sector Average

Performance Comparison

KNTK

Kinetik

43.25

6.53

17.78%

PAA

Plains All American

18.20

1.39

8.27%

DKL

Delek Logistics

38.23

2.96

8.39%

Antero Midstream

16.98

3.55

26.43%

HESM

Hess Midstream Partners

38.96

6.52

20.10%

DTM

DT Midstream

98.91

36.63

58.82%

Kinetik Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -25.98% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

Kinetik Holdings reported substantial growth in gas processing volumes and adjusted EBITDA, driven by strategic M&A activities and operational expansions. The company successfully reduced leverage and increased dividends, reflecting strong financial performance. However, the fourth quarter faced operational challenges due to negative gas prices and maintenance activities, which were addressed with new risk measures. The outlook for 2025 remains optimistic with expected significant EBITDA growth.

Highlights

Record Volume Growth

Kinetik Holdings reported record volume growth in average gas processed volumes of 1.64 billion cubic feet per day, up 13% year over year.

Increased Adjusted EBITDA

Adjusted EBITDA was $971 million, representing a 16% increase year over year, and an 18% increase when normalizing for November impacts.

Successful M&A and Expansion

Kinetik Holdings completed $1 billion in strategic and accretive transactions, including the acquisition of Durango Permian and a gas gathering and processing agreement in Eddy County.

Leverage Reduction

Leverage was reduced by nearly half a turn to 3.4 times, falling below the company’s target.

Dividend Increase

Cash dividend was increased by 4%, accelerating the return of capital to shareholders.

Positive Outlook by S&P

Kinetik Holdings was placed on a positive outlook by S&P.

2025 Growth Expectations

The company expects full-year adjusted EBITDA to grow by 15% in 2025, with a midpoint of $1.12 billion.

Lowlights

Fourth Quarter Operational Challenges

Fourth quarter results were temporarily impacted by unexpected events, including negative Waha gas prices and plant operation restrictions, resulting in a $15 million headwind.

Negative Gas Prices Impact

Negative gas prices at Waha, primarily due to scheduled maintenance on several intrastate gas pipelines, led to volume curtailments.

Exposure to Gas Market Volatility

Kinetik Holdings experienced gross margin losses due to exposure to negative Waha gas prices as a result of operating in ethane rejection.

Company Guidance

During Kinetik Holdings Inc.'s fourth quarter and full year 2024 earnings call, the company provided a detailed outlook for 2025, highlighting a 15% growth in adjusted EBITDA, projected to range between $1.09 billion and $1.15 billion. The company anticipates a significant 20% increase in gas processed volumes, driven by the startup of the King's Landing complex and recently acquired assets like Barilla Draw. Despite challenges such as a $15 million headwind from negative Waha gas prices in November, the company implemented new risk measures to stabilize operations. For 2025, capital expenditures are expected to be between $450 million and $540 million, with up to $75 million contingent on the cost of the King's Landing complex. Kinetik Holdings is also exploring a large-scale gas-fired power generation facility to manage electricity operational expenses, potentially reaching a final investment decision by year-end. The company aims for consistent growth, targeting a 10% annual EBITDA compound growth rate through 2030, while maintaining financial flexibility for organic and inorganic opportunities.

Kinetik Corporate Events

Executive/Board Changes

Kinetik Announces Board Changes with New Appointment

Neutral

Jan 16, 2025

On January 15, 2025, Elizabeth Cordia resigned from the Board of Directors of Kinetik Holdings Inc. without any disagreements regarding the company’s operations or policies. She was a designee of Blackstone Energy Partners II L.P. under a Stockholders Agreement. The vacancy was filled by Karen Putterman, who was appointed by the board on the same day. Ms. Putterman, who will not receive compensation, has no material interest in transactions with the company and will enter into a standard indemnification agreement with Kinetik Holdings Inc.

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.