Montrose Environmental Group (MEG)
NYSE:MEG
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Montrose Environmental Group
(NYSE:MEG)
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Rating:74Outperform
Price Target:
$25.00
▲(10.86% Upside)
Action:ReiteratedDate:02/27/26
The score is driven primarily by improving financial performance (strong cash generation, deleveraging, and operating profit inflection) and a bullish technical trend. This is tempered by weaker valuation optics (negative P/E, no dividend) and execution/cadence risks highlighted on the earnings call (segment margin pressure and lumpy emergency response revenue).
Positive Factors
Cash generation
Sustained, high cash conversion in 2025 delivers durable liquidity to fund organic investments, bolt‑on M&A, and the $40M repurchase program without heavy external financing. Strong FCF supports capital allocation flexibility and reduces short‑term refinancing risk over the next 2–6 months.
Negative Factors
Net income remains negative
Despite EBIT turning positive and EBITDA growth, a lingering net loss keeps ROE negative and constrains full normalization of profitability metrics. Persistent bottom‑line weakness could limit investor confidence and means management must sustain improvements to translate operating gains into lasting net profits.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Sustained, high cash conversion in 2025 delivers durable liquidity to fund organic investments, bolt‑on M&A, and the $40M repurchase program without heavy external financing. Strong FCF supports capital allocation flexibility and reduces short‑term refinancing risk over the next 2–6 months.
Read all positive factors
Montrose Environmental Group (MEG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$811.36M
Dividend YieldN/A
Average Volume (3M)375.19K
Price to Earnings (P/E)―
Beta (1Y)1.42
Revenue Growth22.77%
EPS Growth44.73%
CountryUS
Employees3,400
SectorIndustrials
Sector Strength72
IndustryWaste Management
Share Statistics
EPS (TTM)-0.23
Shares Outstanding35,980,650
10 Day Avg. Volume215,584
30 Day Avg. Volume375,193
Financial Highlights & Ratios
PEG Ratio11.04
Price to Book (P/B)1.93
Price to Sales (P/S)1.05
P/FCF Ratio9.57
Enterprise Value/Market Cap1.43
Enterprise Value/Revenue1.40
Enterprise Value/Gross Profit3.59
Enterprise Value/Ebitda14.19
Forecast
1Y Price Target
$35.20Price Target Upside56.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.13
Revenue Forecast (FY)$871.75M
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...
How the Company Makes Money
MEG primarily makes money by delivering fee-based environmental services under contracts with commercial and government clients. Revenue is generally generated through (1) professional services fees for consulting, engineering, and regulatory comp...
Montrose Environmental Group Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks revenue down by service line (for example remediation, monitoring, or consulting), showing which parts of the business drive growth and which rely on cyclical end-markets. Helps investors see whether Montrose’s revenue mix is diversifying or concentrated in higher-risk areas.
Breaks revenue down by service line (for example remediation, monitoring, or consulting), showing which parts of the business drive growth and which rely on cyclical end-markets. Helps investors see whether Montrose’s revenue mix is diversifying or concentrated in higher-risk areas.
Data provided by:
The Fly
The FlyMontrose Environmental Group Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call conveyed strong, broad-based operational and financial momentum: record 2025 revenue, EBITDA, margins, and exceptional cash generation, plus a simplified balance sheet and clear 2026 guidance targeting further margin improvement. Management emphasized durable private-sector demand, cross-selling gains, and multiple growth tailwinds (PFAS, water technology, data centers, mining, pharma, semiconductors). Near-term caveats include Q4 quarter-to-quarter margin softness, a strategic wind-down of renewables that weighed on Remediation & Reuse margins, lumpy emergency response revenue that creates cadence variability, and modestly higher interest expense from financing the preferred redemption. Overall, the positive drivers and materially improved metrics outweigh the operational and timing headwinds.Positive Updates
Record Full-Year Revenue
Full-year 2025 revenue of $830.5 million, up 19.3% versus 2024 and well above initial guidance.
Negative Updates
Q4 Margin and EBITDA Compression versus Prior Year Quarter
Q4 consolidated adjusted EBITDA was $23.9 million (12.4% of revenue) versus $27.2 million (14.4%) in prior-year quarter — margin decline partly due to lower margins in Measurement & Analysis and Remediation & Reuse, and renewables wind-down expenses.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Full-Year Revenue
Full-year 2025 revenue of $830.5 million, up 19.3% versus 2024 and well above initial guidance.
Read all positive updates
Company Guidance
Montrose guided 2026 revenue of $840M–$900M and consolidated adjusted EBITDA of $125M–$130M (midpoint implying ≈10% EBITDA growth vs. 2025), targeting a ~15% consolidated adjusted EBITDA margin, with organic revenue growth expected at the high end of its 7%–9% long‑term range (≈9% for 2026); the company assumes $50M–$70M of environmental emergency response revenue (midpoint $60M, roughly $15M/quarter if evenly distributed), expects revenue roughly 50/50 H1/H2 (H1 split ~40% Q1 / 60% Q2) and EBITDA ~40% H1 / 60% H2 (H1 ≈1/3 Q1, 2/3 Q2), targets 60% operating cash conversion in 2026 (versus 93% in 2025), expects to generate ~ $180M cumulative operating cash flow across 2025–2026, will allocate 1%–2% of revenue to organic investments, assumes no acquisition impact in guidance, and has a $40M share repurchase authorization with bolt‑on M&A pursued prudently (likely back half if at all).Montrose Environmental Group Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
74
Positive
Cash Flow
84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 830.54M | 696.39M | 624.21M | 544.42M | 546.41M |
| Gross Profit | 283.43M | 278.20M | 240.31M | 192.53M | 177.38M |
| EBITDA | 81.70M | 25.88M | 31.93M | 32.44M | 40.96M |
| Net Income | -843.00K | -62.31M | -30.86M | -31.82M | -25.32M |
Balance Sheet | |||||
| Total Assets | 981.30M | 990.35M | 816.79M | 791.91M | 833.09M |
| Cash, Cash Equivalents and Short-Term Investments | 11.22M | 12.94M | 23.24M | 89.83M | 146.74M |
| Total Debt | 359.03M | 281.00M | 210.34M | 202.12M | 205.77M |
| Total Liabilities | 530.12M | 544.09M | 495.53M | 478.73M | 516.59M |
| Stockholders Equity | 451.18M | 446.26M | 321.25M | 313.19M | 316.50M |
Cash Flow | |||||
| Free Cash Flow | 91.16M | 902.00K | 23.09M | 10.65M | 30.00M |
| Operating Cash Flow | 107.48M | 22.23M | 56.02M | 20.65M | 37.58M |
| Investing Cash Flow | -15.84M | -138.04M | -101.62M | -38.69M | -71.64M |
| Financing Cash Flow | -93.12M | 106.00M | -20.11M | -38.76M | 146.10M |
Montrose Environmental Group Technical Analysis
Negative
22.55
Price Trends
23.81
Negative
24.50
Negative
25.36
Negative
Market Momentum
-0.60
Negative
44.96
Neutral
70.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MEG, the sentiment is Negative. The current price of 22.55 is below the 20-day moving average (MA) of 22.88, below the 50-day MA of 23.81, and below the 200-day MA of 25.36, indicating a bearish trend. The MACD of -0.60 indicates Negative momentum. The RSI at 44.96 is Neutral, neither overbought nor oversold. The STOCH value of 70.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MEG.
Montrose Environmental Group Risk Analysis
Montrose Environmental Group disclosed 48 risk factors in its most recent earnings report. Montrose Environmental Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Montrose Environmental Group Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $811.36M | -1,034.44 | -0.17% | ― | 22.77% | 44.73% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
54 Neutral | $262.72M | -0.65 | -696.09% | ― | -31.28% | 42.94% | |
45 Neutral | $1.61B | -8.63 | -48.78% | ― | -2.91% | -67.18% | |
45 Neutral | $226.84M | -16.86 | -19.87% | ― | -9.64% | 40.01% | |
44 Neutral | $23.89M | -2.54 | -44.35% | ― | -9.25% | -189.37% |
* Industrials Sector Average
MEG
Montrose Environmental Group
22.55
9.77
76.45%
NVRI
Enviri
19.73
14.30
263.35%
PESI
Perma-Fix
12.23
4.89
66.62%
QRHC
Quest Resource
1.14
-1.37
-54.58%
LNZA
LanzaTech Global
26.04
4.04
18.36%
Montrose Environmental Group Corporate Events
Business Operations and StrategyStock BuybackFinancial Disclosures
Montrose Environmental Posts Record 2025 Results, Issues 2026 Outlook
Positive
Feb 25, 2026
Montrose Environmental Group reported that for the full year 2025, ended December 31, it achieved record revenue of $830.5 million, up 19.3% from 2024, driven by 12.7% organic growth, stronger environmental emergency response work, and prior-year ...
Business Operations and StrategyExecutive/Board Changes
Montrose Environmental Group Appoints New Chief Operating Officer
Positive
Jan 20, 2026
On January 20, 2026, Montrose Environmental Group announced that it had appointed industry veteran James Laws as Chief Operating Officer, effective January 19, 2026, bringing in a leader with 25 years of environmental sector experience and a track...
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.