Montrose Environmental Group (MEG) AI Stock Analysis

• Market Cap: $775.68M
• Dividend Yield: N/A
• Average Volume (3M): 361.06K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.37
• Revenue Growth: 10.92%
• EPS Growth: -57.13%
• Country: US
• Employees: 3,400
• Sector: Industrials
• Sector Strength: 94
• Industry: Waste Management
• EPS (TTM): -0.64
• Shares Outstanding: 34,216,240
• 10 Day Avg. Volume: 280,567
• 30 Day Avg. Volume: 361,056
• PEG Ratio: 1.13
• Price to Book (P/B): 1.77
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 25.88
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 0.38
• Enterprise Value/Gross Profit: 3.79
• Enterprise Value/Ebitda: 9.23
• 1Y Price Target: $30.60
• Price Target Upside: 34.98% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 68 Neutral
• Price Target: $26.00 ▲(14.69%Upside)

Montrose Environmental Group's overall stock score reflects robust revenue growth and strong cash flow improvements, bolstered by positive earnings call sentiment and strategic initiatives like the stock repurchase program. However, persistent profitability challenges and valuation concerns due to negative earnings impact the score. Technical indicators suggest current bullish momentum, but caution is warranted due to overbought conditions.

Positive Factors

Balance Sheet Simplification

Montrose fully redeemed all remaining issued and outstanding shares of the series A-2 preferred stock, simplifying the balance sheet as investors desired.

Earnings Performance

The decrease in preferred dividend payment and diluted shares outstanding more than offset the increase in interest expense, leading to an increase in adjusted EPS estimates for 2025 and 2026.

Regulatory Opportunities

PFAS funnel widening following EPA announcement increases client interest in Montrose's consulting services.

Negative Factors

Environmental Regulation Challenges

Shares traded up more than 30% following fourth-quarter results, only to give those gains back in the intervening weeks on negative headlines regarding environmental deregulation and funding cuts/restructuring at the EPA.

Stock Volatility

Shares traded up more than 30% following fourth-quarter results, only to give those gains back in the intervening weeks on negative headlines regarding environmental deregulation and funding cuts/restructuring at the EPA.

Montrose Environmental Group Business Overview & Revenue Model

Company Description

Montrose Environmental Group (MEG) is a leading environmental services company that operates across various sectors, including air quality, environmental laboratory services, regulatory compliance, and environmental consulting. The company provides a broad range of services aimed at supporting clients in navigating environmental regulations, mitigating environmental risks, and managing their environmental impact. MEG's offerings include air quality testing, emissions measurement, environmental laboratory analysis, and remediation consulting, among others.

How the Company Makes Money

Montrose Environmental Group generates revenue through a diverse set of environmental services tailored to meet the needs of industrial, governmental, and commercial clients. Key revenue streams include consulting fees for environmental compliance and strategy, laboratory testing and analysis fees, and project management fees for remediation and mitigation projects. The company also benefits from long-term contracts and partnerships with various federal and state agencies, as well as private sector clients, which provide a steady stream of income. Significant factors contributing to MEG's earnings include its expertise in air quality management and regulatory compliance, as well as its ability to provide comprehensive solutions that integrate technology and innovation to address complex environmental challenges.

Montrose Environmental Group Financial Statement Overview

Summary

Montrose Environmental Group demonstrates revenue growth and strong cash flow improvements. However, persistent profitability issues with negative net and EBIT margins continue to impact overall financial stability. Enhancements in operational efficiency are needed to improve financial outcomes.

Income Statement

Montrose Environmental Group's revenue has shown consistent growth, with a TTM (Trailing-Twelve-Months) increase of 3.2% compared to the previous year. Gross profit margin stands at 38.4%, reflecting strong cost management. However, persistent negative net and EBIT margins indicate ongoing profitability challenges, with the TTM net profit margin at -9.9% and EBIT margin at -5.0%. The company needs to address its operational inefficiencies to improve bottom-line results.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.68, indicating a balanced approach to leveraging. However, the return on equity is negative due to sustained net losses, and the equity ratio stands at 44.8%, showing a reasonable level of financial stability. Improving profitability could enhance overall financial health.

Cash Flow

Free cash flow has grown significantly, from $902,000 in 2024 to $30.05 million TTM, representing a robust growth trajectory. The operating cash flow to net income ratio of -0.70 suggests that cash flows are less volatile than reported earnings, indicating good cash management. Enhanced free cash flow to net income ratio also supports liquidity improvement.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	696.39M	624.21M	544.42M	546.41M	328.24M
Gross Profit	278.20M	240.31M	192.53M	177.38M	112.75M
EBITDA	25.88M	31.93M	32.44M	36.91M	-7.41M
Net Income	-62.31M	-30.86M	-31.82M	-25.32M	-57.95M
Balance Sheet
Total Assets	990.35M	816.79M	791.91M	833.09M	602.73M
Cash, Cash Equivalents and Short-Term Investments	12.94M	23.24M	89.83M	146.25M	34.39M
Total Debt	281.00M	210.34M	202.12M	205.77M	175.90M
Total Liabilities	544.09M	342.61M	325.80M	363.67M	312.65M
Stockholders Equity	446.26M	474.18M	466.12M	469.43M	290.07M
Cash Flow
Free Cash Flow	902.00K	23.09M	10.65M	30.00M	-5.93M
Operating Cash Flow	22.23M	56.02M	20.65M	37.58M	1.85M
Investing Cash Flow	-138.04M	-101.62M	-38.69M	-71.64M	-179.74M
Financing Cash Flow	106.00M	-20.11M	-38.76M	146.10M	205.90M

Montrose Environmental Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 22.67 is above the 20-day moving average (MA) of 22.42, above the 50-day MA of 21.46, and above the 200-day MA of 19.58, indicating a bullish trend. The MACD of 0.26 indicates Positive momentum. The RSI at 55.32 is Neutral, neither overbought nor oversold. The STOCH value of 37.62 is Neutral, 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
CWST	72 Outperform	$6.85B	491.93	1.00%	―	21.63%	-30.27%
MEG	68 Neutral	$775.68M	―	-14.32%	―	10.92%	-57.13%
Sector *	65 Neutral	$11.08B	15.70	5.19%	2.15%	3.13%	-24.94%
PESI	60 Neutral	$225.58M	―	-41.10%	―	-28.62%	-543.45%
NVRI	56 Neutral	$764.72M	―	-26.25%	―	5.42%	-29.97%
QRHC	46 Neutral	$43.43M	―	-44.84%	―	-0.91%	-305.99%

Montrose Environmental Group Corporate Events

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.

The most recent analyst rating on (MEG) stock is a Hold with a $30.00 price target. To see the full list of analyst forecasts on Montrose Environmental Group stock, see the MEG Stock Forecast page.

Montrose Environmental Group Holds Annual Stockholders Meeting

On May 6, 2025, Montrose Environmental Group, Inc. held its Annual Meeting of Stockholders where several key decisions were made. The stockholders approved an amendment to declassify the Board of Directors, phasing in annual elections by 2028, and ratified Deloitte & Touche LLP as the independent auditor for 2025. Additionally, the compensation of executive officers was approved on a non-binding basis. These changes aim to enhance governance and accountability within the company.

Montrose Environmental Group Reports Record Q1 Results

On May 7, 2025, Montrose Environmental Group reported record first-quarter results with revenue reaching $177.8 million, a 14.5% increase from the previous year. The company announced an inaugural stock repurchase program of up to $40 million and increased its 2025 guidance for Consolidated Adjusted EBITDA. Despite a net loss of $19.4 million, Montrose achieved its highest-ever first-quarter operating cash flow and maintained significant liquidity. The company’s strategic focus on organic growth and capital allocation priorities, including the redemption of preferred equity, underpins its strengthened financial outlook for 2025.