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Kinetik (KNTK)
NYSE:KNTK
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Kinetik
(NYSE:KNTK)
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Rating:64Neutral
Price Target:
$50.00
▲(9.91% Upside)
Action:ReiteratedDate:02/27/26
The score is driven primarily by solid operating performance and cash generation, partially offset by elevated balance-sheet risk (high debt and negative equity). Technicals are supportive with price above key moving averages and positive momentum, while valuation is pressured by a very high P/E despite the attractive dividend. The latest earnings call was mixed due to lowered EBITDA guidance and macro/volume headwinds, balanced by progress on key projects and strategic agreements.
Positive Factors
Strong cash generation
Kinetik’s operating cash flow has been consistently positive and free cash flow returned to positive from 2021 through 2025, with 2025 FCF matching net income. Durable cash generation supports sustaining capex, dividends, and deleveraging over the next 2–6 months.
Consistent revenue growth & improved margins
Revenue growth has been steady from 2020 to 2025 with material improvement in profitability versus 2020, including ~30% net margins in 2023 and 2025. This underlying top-line and margin recovery strengthens operating leverage and supports medium-term cash flow resilience.
Strategic projects and partnerships
Commercial start-up of Kings Landing, progress on ECCC pipeline, CPV power connection, and a 5-year LNG pricing agreement with INEOS materially expand market access and revenue optionality. The $500M EPIC sale proceeds also provide durable balance sheet relief and funding flexibility.
Negative Factors
High leverage and negative equity
Debt has increased materially while shareholders’ equity has been negative in recent years, leaving a weak equity cushion. Elevated leverage raises refinancing, covenant and liquidity risk, reducing financial flexibility and increasing vulnerability to sustained commodity weakness over the next several months.
EBITDA sensitivity to commodity and curtailments
Management cut EBITDA guidance and cited a ~12% commodity price shortfall plus ~20% curtailed volumes. Midstream cash flows remain exposed to commodity and producer behavior, creating persistent earnings volatility and downside risk to cash generation and distributions in the near-to-medium term.
Volatile earnings and accounting anomalies
Reported earnings have been uneven with notable year-to-year swings and an anomalous 2025 gross profit/margin data point. Combined with intermittent free cash flow volatility, this reduces confidence in forecasting and raises execution risk when paired with high leverage and near-term project timing uncertainty.
Kinetik (KNTK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.35B
Dividend Yield8.77%
Average Volume (3M)1.55M
Price to Earnings (P/E)17.3
Beta (1Y)1.01
Revenue Growth15.00%
EPS Growth-84.96%
CountryUS
Employees460
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)2.16
Shares Outstanding64,027,440
10 Day Avg. Volume2,332,699
30 Day Avg. Volume1,552,395
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)-3.95
Price to Sales (P/S)1.27
P/FCF Ratio3.70
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue3.91
Enterprise Value/Gross Profit12.37
Enterprise Value/Ebitda5.80
Forecast
1Y Price Target
$45.78Price Target Upside0.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)1.6
Revenue Forecast (FY)$1.90B
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 generates revenue through multiple streams, primarily by selling its consumer-facing products such as fitness trackers and associated applications. The company also earns money through subscription services that provide users with access to personalized training plans, health analytics, and premium content. Additionally, Kinetik has established partnerships with gyms and fitness influencers, which help promote its products and services, further driving sales. These collaborations often include revenue-sharing agreements that contribute to the overall earnings of the company.
Kinetik Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mix of strategic achievements, such as the successful initiation of Kings Landing and new partnerships, alongside significant challenges posed by delayed projects, commodity price volatility, and production curtailments. The call acknowledged past missteps and emphasized a commitment to improved forecasting and cost control.Q3-2025 Updates
Positive Updates
Kings Landing Project Success
Kings Landing reached full commercial service in September, adding over 100 million cubic feet per day of processing capacity in New Mexico, in line with original expectations.
ECCC Pipeline Progress
Significant construction progress on the ECCC pipeline, expected to be in service during Q2 2026, connecting Delaware North to Delaware South systems.
Strategic Partnership with CPV
Finalized an agreement with Competitive Power Ventures to connect Kinetik's pipeline network to the 1,350-megawatt CPV Basin Ranch Energy Center in Texas at no capital cost.
European LNG Pricing Agreement
Executed a 5-year LNG pricing agreement with INEOS at Port Arthur LNG, starting in early 2027, providing customers with exposure to European TTF index pricing.
Asset Sale Proceeds
Received over $500 million from the EPIC Crude sale, reducing leverage ratio by 1/4 of a ton.
Negative Updates
Delayed King's Landing Start-Up
King's Landing's full commercial in-service was slower than anticipated, reducing full-year earnings by approximately $20 million.
Commodity Price Volatility
Sustained volatility led to a 12% decline in commodity prices from the original February assumptions, impacting full-year EBITDA by nearly $30 million.
Production Curtailments
Approximately 20% of volumes were curtailed in October, impacting full-year earnings by about $20 million.
Decreased EBITDA Guidance
Revised full-year adjusted EBITDA guidance to $965 million to $1.005 billion, down from previous expectations.
Midstream Logistics Segment Decline
Adjusted EBITDA for the Midstream Logistics segment was down 13% year-over-year, due to lower commodity prices and higher operating expenses.
Company Guidance
During Kinetik's third quarter 2025 earnings call, the company provided updated guidance and outlined several strategic initiatives. Kinetik revised its full-year adjusted EBITDA guidance to a range of $965 million to $1.005 billion, citing factors such as delayed start-up of Kings Landing, sustained commodity price volatility, and producer curtailments. The company highlighted that Kings Landing, now fully operational, is flowing over 100 million cubic feet per day, aligning with expectations. Kinetik also discussed its acid gas injection project at Kings Landing, expected to be operational by late 2026, and its strategic move to secure a 5-year LNG pricing agreement with INEOS for 2027, based on the European TTF index. Additionally, Kinetik secured additional firm transport capacity to the U.S. Gulf Coast starting in 2028 to enhance market access. The company emphasized its commitment to disciplined execution, forecasting improvements, and advancing strategic projects such as the ECCC pipeline and collaborations in power generation, positioning itself for long-term growth in the Permian Basin.Kinetik Financial Statement Overview
Summary
Operations are strong (revenue growth, improved profitability vs. 2020 loss, and consistently positive operating/free cash flow), but the balance sheet is a material constraint: debt has risen and shareholders’ equity is negative in most recent years, increasing financial risk and reducing flexibility.Income Statement
Revenue has grown consistently from 2020 to 2025, with a strong jump in 2021–2022 and continued growth in 2024–2025. Profitability has also improved materially versus 2020’s large loss, with net margins reaching ~30% in 2023 and 2025. However, earnings were volatile (notably lower margin in 2024), and 2025 shows unusual gross profit/margin data (reported as zero), which reduces confidence in the quality/consistency of the income statement trend.74
Positive
Balance Sheet
Leverage is high for the business profile, with total debt rising overall (about $2.45B in 2020 to about $3.98B in 2025). A major concern is negative shareholders’ equity in most years (2022–2025), which makes leverage metrics distorted and signals a weak equity cushion. While total assets have grown steadily, the combination of heavy debt load and negative equity meaningfully increases financial risk.28
Negative
Cash Flow
Cash generation is a clear strength: operating cash flow is consistently positive and has scaled up versus 2020, while free cash flow is positive from 2021 through 2025 (after being negative in 2020). Cash flow has generally compared favorably to accounting earnings (including 2025 where free cash flow matches net income), and operating cash flow relative to interest burden appears strong in recent years. The main weakness is year-to-year volatility in free cash flow (down in 2023, then rebounding sharply in 2024–2025).79
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.76B | 1.48B | 1.26B | 1.21B | 662.04M |
| Gross Profit | 324.39M | 538.11M | 459.70M | 411.63M | 184.87M |
| EBITDA | 1.19B | 801.26M | 634.19M | 653.37M | 350.90M |
| Net Income | 178.26M | 244.23M | 386.45M | 135.52M | 1.48M |
Balance Sheet | |||||
| Total Assets | 7.10B | 6.81B | 6.50B | 5.92B | 3.55B |
| Cash, Cash Equivalents and Short-Term Investments | 3.95M | 3.61M | 4.51M | 6.39M | 18.73M |
| Total Debt | 3.98B | 3.53B | 3.60B | 3.40B | 2.37B |
| Total Liabilities | 3.98B | 3.84B | 3.87B | 3.65B | 2.55B |
| Stockholders Equity | -565.38M | -2.98B | -530.82M | -839.77M | 10.00K |
Cash Flow | |||||
| Free Cash Flow | 604.12M | 361.47M | 254.93M | 391.43M | 152.86M |
| Operating Cash Flow | 604.12M | 637.35M | 584.48M | 613.01M | 235.57M |
| Investing Cash Flow | -199.09M | -176.89M | -686.32M | -286.13M | -99.62M |
| Financing Cash Flow | -404.68M | -461.36M | 99.96M | -339.21M | -136.81M |
Kinetik Technical Analysis
Positive
45.49
Price Trends
38.71
Positive
36.97
Positive
38.90
Positive
Market Momentum
1.92
Negative
63.76
Neutral
65.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KNTK, the sentiment is Positive. The current price of 45.49 is above the 20-day moving average (MA) of 42.53, above the 50-day MA of 38.71, and above the 200-day MA of 38.90, indicating a bullish trend. The MACD of 1.92 indicates Negative momentum. The RSI at 63.76 is Neutral, neither overbought nor oversold. The STOCH value of 65.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KNTK.
Kinetik Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $14.12B | 32.27 | 9.42% | 2.70% | 20.39% | -3.85% | |
74 Outperform | $10.63B | 26.27 | 20.22% | 4.98% | 8.70% | 21.42% | |
73 Outperform | $8.03B | 13.49 | 64.22% | 8.45% | 10.78% | 19.10% | |
70 Outperform | $2.78B | 15.76 | 847.51% | 9.78% | -1.78% | 9.32% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
64 Neutral | $7.35B | 17.27 | ― | 8.77% | 15.00% | -84.96% | |
60 Neutral | $2.21B | -27.23 | -2.48% | 4.14% | -36.47% | -75.37% |
* Energy Sector Average
KNTK
Kinetik
45.49
-7.25
-13.75%
GEL
Genesis Energy
18.06
5.40
42.68%
DKL
Delek Logistics
51.93
13.61
35.51%
AM
Antero Midstream
22.48
6.52
40.84%
HESM
Hess Midstream Partners
38.68
0.72
1.89%
DTM
DT Midstream
138.84
47.12
51.37%
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.