Montrose Environmental Group (MEG) AI Stock Analysis

• Market Cap: $962.97M
• Dividend Yield: N/A
• Average Volume (3M): 351.15K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.52
• Revenue Growth: 17.78%
• EPS Growth: 2.57%
• Country: US
• Employees: 3,400
• Sector: Industrials
• Sector Strength: 84
• Industry: Waste Management
• EPS (TTM): 0.42
• Shares Outstanding: 35,286,490
• 10 Day Avg. Volume: 544,263
• 30 Day Avg. Volume: 351,151
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 1.67
• Enterprise Value/Gross Profit: 4.06
• Enterprise Value/Ebitda: 53.65
• 1Y Price Target: $31.00
• Price Target Upside: 11.15% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 71 Outperform
• Price Target: $31.00 ▲(11.15% Upside)

Montrose Environmental Group's strong revenue growth and improved cash flow are significant positives, supported by a positive earnings call with increased guidance. However, challenges with profitability and a negative P/E ratio weigh on the valuation, and technical indicators suggest the stock may be overbought.

Positive Factors

Financial Performance

Q2 revenues increased 36%, well above Street expectations of +9%.

Regulatory Impact

Regulatory changes have caused more tailwinds than headwinds, as clients seek Montrose's expertise for compliance strategy.

Stock Valuation

The intrinsic value of the company significantly exceeds the current stock price, suggesting it is undervalued.

Negative Factors

Financial Strategy

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.

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 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 shows consistent revenue growth and strong cash flow improvements. However, persistent profitability issues and negative earnings impact overall financial stability. Strategic improvements in operational efficiency and cost management could lead to better 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	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	24.34M	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: 27.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 27.89 is above the 20-day moving average (MA) of 23.29, above the 50-day MA of 22.70, and above the 200-day MA of 19.55, indicating a bullish trend. The MACD of 1.12 indicates Negative momentum. The RSI at 70.59 is Negative, neither overbought nor oversold. The STOCH value of 55.66 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
MEG	71 Outperform	$962.97M	―	-7.61%	―	17.78%	2.57%
Sector *	59 Neutral	AU$1.63B	11.15	-5.90%	3.59%	9.81%	6.78%
CWST	57 Neutral	$6.33B	550.39	0.85%	―	20.35%	-45.38%
PESI	52 Neutral	$216.66M	―	-34.16%	―	-16.87%	-124.96%
NVRI	49 Neutral	$714.54M	―	-35.66%	―	-0.83%	-61.90%
QRHC	44 Neutral	$36.87M	―	-46.57%	―	-5.20%	-275.34%
AMBI	―	$291.01M	―		―	―	―

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.

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 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.