Montrose Environmental Group (MEG) AI Stock Analysis

• Market Cap: $978.49M
• Dividend Yield: N/A
• Average Volume (3M): 450.42K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.49
• Revenue Growth: 17.78%
• EPS Growth: 2.57%
• Country: US
• Employees: 3,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Waste Management
• EPS (TTM): 0.42
• Shares Outstanding: 35,286,490
• 10 Day Avg. Volume: 476,293
• 30 Day Avg. Volume: 450,420
• PEG Ratio: -0.24
• Price to Book (P/B): 1.14
• Price to Sales (P/S): 0.88
• P/FCF Ratio: 679.91
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 1.67
• Enterprise Value/Gross Profit: 4.06
• Enterprise Value/Ebitda: 27.12
• 1Y Price Target: $33.00
• Price Target Upside: 19.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 70 Outperform
• Price Target: $31.00 ▲(11.79% Upside)

Montrose Environmental Group's strong revenue growth, improving cash flow, and positive earnings call sentiment are significant strengths. However, profitability challenges and valuation concerns due to negative net income and lack of dividends weigh on the overall score.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust market demand and effective business strategies, enhancing long-term financial health and market position.

Cash Flow Improvement

Improved cash flow enhances financial flexibility, supporting future investments and debt reduction, crucial for sustainable growth.

Balance Sheet Simplification

Simplifying the balance sheet by reducing leverage improves financial stability and reduces risk, supporting long-term strategic initiatives.

Negative Factors

Profitability Challenges

Ongoing profitability issues can hinder reinvestment in growth and innovation, affecting competitive positioning and long-term viability.

Regulatory Uncertainty

Regulatory changes can impact operational costs and strategic planning, posing risks to business continuity and market operations.

Increased Share Dilution

Share dilution can reduce earnings per share and shareholder value, potentially impacting investor sentiment and capital raising capabilities.

Montrose Environmental Group Business Overview & Revenue Model

Company Description

Montrose Environmental Group, Inc. operates as an environmental services company in the United States. The company operates in three segments: Assessment, Permitting and Response; Measurement and Analysis; and Remediation and Reuse. The Assessment, Permitting and Response segment provides scientific advisory and consulting services to support environmental assessments, environmental emergency response and recovery, toxicology consulting and environmental audits and permits for current operations, facility upgrades, new projects, decommissioning projects, and development projects. Its technical advisory and consulting services include regulatory compliance support and planning, environmental, and ecosystem and toxicological assessments and support during responses to environmental disruptions. The Measurement and Analysis segment tests and analyzes air, water, and soil to determine concentrations of contaminants, as well as the toxicological impact of contaminants on flora, fauna, and human health. Its services include source and ambient air testing and monitoring, leak detection, and advanced analytical laboratory services, such as air, storm water, wastewater, and drinking water analysis. The Remediation and Reuse segment provides engineering, design, implementation, and operations and maintenance services primarily to treat contaminated water, remove contaminants from soil, or create biogas from waste. It serves technology, media, chemical, energy, power and utility, industrial and manufacturing, financial, and engineering industries, as well as local, state, provincial, and federal government entities. The company was founded in 2012 and is headquartered in North Little Rock, Arkansas.

How the Company Makes Money

Montrose Environmental Group generates revenue primarily through its diversified service offerings. Key revenue streams include consulting fees for environmental assessments, contracts for remediation projects, and ongoing monitoring services for compliance with environmental regulations. The company also earns income through partnerships with government agencies and private sector clients, which often result in multi-year contracts. Additionally, MEG leverages its expertise to provide specialized training and educational services, contributing further to its earnings. Overall, the company's ability to adapt to regulatory changes and invest in technological advancements plays a significant role in its financial success.

Montrose Environmental Group Financial Statement Overview

Summary

Montrose Environmental Group shows solid revenue growth and improving cash flow, indicating future potential. However, challenges with profitability and leverage, as reflected in negative net income and increasing debt levels, require attention.

Income Statement

Montrose Environmental Group shows a positive revenue growth trend with an 8.5% increase in TTM, indicating strong market demand. However, the company struggles with profitability, as evidenced by negative net profit and EBIT margins. The gross profit margin is healthy at 41.2%, but the net profit margin remains negative at -5.1%, reflecting ongoing challenges in cost management and operational efficiency.

Balance Sheet

The company's debt-to-equity ratio of 0.66 in TTM suggests moderate leverage, which is manageable but has increased over time. The return on equity is negative, indicating that the company is not generating sufficient returns on shareholders' investments. The equity ratio is stable, showing that a significant portion of assets is financed by equity.

Cash Flow

Montrose Environmental Group demonstrates strong cash flow improvements, with a significant 104.6% growth in free cash flow in TTM. The operating cash flow to net income ratio is 0.48, indicating decent cash generation relative to net income. The free cash flow to net income ratio is high at 0.87, showing effective cash conversion despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	780.12M	696.39M	624.21M	544.42M	546.41M	328.24M
Gross Profit	321.36M	278.20M	240.31M	192.53M	177.38M	112.75M
EBITDA	48.16M	25.88M	31.93M	32.44M	36.91M	-7.41M
Net Income	-39.79M	-62.31M	-30.86M	-31.82M	-25.32M	-57.95M
Balance Sheet
Total Assets	998.08M	990.35M	816.79M	791.91M	833.09M	602.73M
Cash, Cash Equivalents and Short-Term Investments	10.48M	12.94M	23.24M	89.83M	146.25M	34.39M
Total Debt	331.42M	281.00M	210.34M	202.12M	205.77M	175.90M
Total Liabilities	494.02M	544.09M	342.61M	325.80M	363.67M	312.65M
Stockholders Equity	504.06M	539.19M	474.18M	466.12M	469.43M	290.07M
Cash Flow
Free Cash Flow	61.47M	902.00K	23.09M	10.65M	30.00M	-5.93M
Operating Cash Flow	70.76M	22.23M	56.02M	20.65M	37.58M	1.85M
Investing Cash Flow	-58.04M	-138.04M	-101.62M	-38.69M	-71.64M	-179.74M
Financing Cash Flow	-18.09M	106.00M	-20.11M	-38.76M	146.10M	205.90M

Montrose Environmental Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MEG, the sentiment is Positive. The current price of 27.73 is below the 20-day moving average (MA) of 29.28, above the 50-day MA of 26.90, and above the 200-day MA of 20.73, indicating a neutral trend. The MACD of 0.16 indicates Positive momentum. The RSI at 45.49 is Neutral, neither overbought nor oversold. The STOCH value of 13.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MEG.

Montrose Environmental Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MEG	70 Outperform	$978.49M	―	-7.61%	―	17.78%	2.57%
CWST	57 Neutral	$5.69B	495.46	0.71%	―	20.35%	-45.38%
NVRI	56 Neutral	$988.74M	-6.26	-41.84%	―	-0.83%	-61.90%
PESI	51 Neutral	$183.41M	-8.83	-32.02%	―	-16.87%	-124.96%
QRHC	46 Neutral	$33.55M	-1.34	-58.85%	―	-5.20%	-275.34%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Montrose Environmental Group Corporate Events

Montrose Environmental Group Reports Record-Breaking Q2 2025

Montrose Environmental Group reported a record-breaking second quarter and first half of 2025, with significant revenue growth and improved financial metrics compared to the previous year. The company increased its full-year 2025 financial guidance, driven by strong organic growth, contributions from acquisitions, and improved margins, while also simplifying its capital structure by redeeming Series A-2 Preferred Stock earlier than planned.

Montrose Environmental Redeems Series A-2 Preferred Stock

On July 1, 2025, Montrose Environmental Group, Inc. redeemed all outstanding shares of its Series A-2 Preferred Stock from OCM Montrose II Holdings, L.P., valued at $62.2 million, using cash and borrowings. This redemption eliminates the Holder’s rights to appoint a board member, potentially impacting the company’s governance structure.