Mistras Group (MG) AI Stock Analysis

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Mistras Group

(NYSE:MG)

67Neutral

Mistras Group demonstrates a solid financial performance with improved profitability and effective cost management, coupled with positive technical indicators and fair valuation. The company has made strategic leadership appointments and demonstrated optimism in its earnings call, despite facing challenges in specific markets. Overall, the stock shows a promising outlook with balanced growth potential and manageable risks.

Mistras Group (MG) vs. S&P 500 (SPY)

Market Cap

$289.22M

Dividend YieldN/A

Average Volume (3M)192.69K

Price to Earnings (P/E)15.4

Beta (1Y)1.19

Revenue Growth3.43%

EPS GrowthN/A

CountryUS

Employees4,800

SectorIndustrials

Sector Strength63

IndustrySecurity & Protection Services

Share Statistics

EPS (TTM)0.60

Shares Outstanding31,032,045

10 Day Avg. Volume229,407

30 Day Avg. Volume192,690

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.45

Price to Cash Flow (P/CF)3.20

P/FCF Ratio3.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Mistras Group Business Overview & Revenue Model

Company DescriptionMistras Group, Inc. provides technology-enabled asset protection solutions worldwide. The company operates through three segments: Services, International, and Products and Systems. It offers non-destructive testing services; predictive maintenance assessments of fixed and rotating assets; inline inspection for pipelines; and develops enterprise inspection database management software and plant condition management software. The company also provides maintenance and light mechanical services, such as corrosion removal, mitigation and prevention, insulation installation and removal, electrical, heat tracing, industrial cleaning, pipefitting, and welding; engineering consulting services primarily for process equipment, technologies, and facilities; and utilizes scaffolding and rope access to access at-height and confined assets. In addition, it offers certified divers for subsea inspection and maintenance; unmanned aerial, land-based, and subsea systems for inspection applications; online condition-monitoring solutions; quality assurance and quality control solutions for new and existing metal and alloy components, materials, and composites. Further, the company designs and installs monitoring systems, as well as provides commissioning, training, reporting, technical support, and annual maintenance services; Web-based solutions; and custom-developed software. Additionally, it designs, manufactures, and sells acoustic emission sensors, instruments, and turnkey systems for monitoring and testing materials, pressure components, processes, and structures, as well as automated ultrasonic systems and scanners. The company serves oil and gas, commercial aerospace and defense, fossil and nuclear power, alternative and renewable energy, industrial, public infrastructure, petrochemical, transportation, and process industries, as well as research and engineering institutions. Mistras Group, Inc. was founded in 1978 and is headquartered in Princeton Junction, New Jersey.

How the Company Makes MoneyMistras Group makes money through a diversified revenue model primarily driven by service contracts and equipment sales. Key revenue streams include fees for non-destructive testing services, which help clients maintain the safety and performance of their infrastructure, and sales of proprietary equipment and software that facilitate asset monitoring and data management. The company also establishes significant partnerships with industry leaders in energy and industrial sectors, which help in expanding its market reach and generating additional revenue. Mistras Group's focus on innovation and development of advanced technologies further enhances its ability to attract and retain clients in a competitive marketplace.

Mistras Group Financial Statement Overview

Summary

Mistras Group has shown substantial improvements in profitability and operational efficiency in the TTM period ending 2024, with notable progress in net income and EBIT margin. The balance sheet indicates better leverage management with a lower debt-to-equity ratio, but the equity ratio suggests some reliance on liabilities. Cash flow has improved, but historical volatility remains a concern. Overall, the company displays a positive financial trajectory with areas for caution.

Income Statement

Positive

The company shows a strong recovery with a significant improvement in net income from a loss of $17.45 million in 2023 to a profit of $19.04 million in TTM 2024. Gross profit margin remains stable at around 28.5%, and net profit margin improved to 2.61% in TTM 2024. Revenue growth rate from 2023 to TTM 2024 is 3.43%, indicating moderate growth. However, EBIT margin improved to 5.76% in TTM 2024 from negative in 2023, showing operational efficiency improvements.

Balance Sheet

Neutral

The balance sheet reflects a manageable debt-to-equity ratio of 0.16 in TTM 2024, down from previous years, indicating reduced leverage. Return on equity improved significantly to 9.59% in TTM 2024, highlighting better profitability. However, the equity ratio of 37.95% suggests that a higher portion of assets is funded by liabilities, which could pose some financial risks.

Cash Flow

Neutral

Operating cash flow remains positive, albeit slightly reduced to $24.47 million in TTM 2024 from $26.75 million in 2023. Free cash flow has increased to $6.32 million in TTM 2024, showing an improvement in cash generation. The free cash flow to net income ratio is healthy, but the overall cash flow situation shows some volatility in recent years.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
729.64M	705.47M	687.37M	677.13M	592.57M
	Gross Profit
213.11M	203.81M	198.17M	197.15M	178.53M
	EBIT
39.83M	-1.90M	19.80M	18.17M	5.18M
	EBITDA
50.71M	32.20M	53.09M	53.09M	-65.51M
	Net Income Common Stockholders
18.96M	-17.45M	6.50M	3.86M	-99.47M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
18.32M	17.65M	20.49M	24.11M	25.76M
	Total Assets
523.04M	534.78M	534.90M	562.20M	583.31M
	Total Debt
32.07M	245.72M	205.50M	216.08M	235.10M
	Net Debt
13.75M	228.08M	185.01M	191.97M	209.34M
	Total Liabilities
324.14M	344.27M	336.15M	361.28M	386.09M
	Stockholders Equity
198.57M	190.19M	198.45M	200.68M	197.02M
Cash Flow		Free Cash Flow
27.14M	3.10M	12.99M	22.98M	52.03M
	Operating Cash Flow
50.13M	26.75M	26.41M	42.26M	67.80M
	Investing Cash Flow
-21.37M	-22.13M	-12.24M	-18.55M	-14.97M
	Financing Cash Flow
-27.40M	-7.71M	-16.32M	-23.25M	-44.17M

Mistras Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price9.32

Price Trends

50DMA

10.05

Negative

100DMA

9.60

Negative

200DMA

9.92

Negative

Market Momentum

MACD

0.21

Negative

RSI

55.96

Neutral

STOCH

67.45

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MG, the sentiment is Negative. The current price of 9.32 is below the 20-day moving average (MA) of 10.24, below the 50-day MA of 10.05, and below the 200-day MA of 9.92, indicating a bearish trend. The MACD of 0.21 indicates Negative momentum. The RSI at 55.96 is Neutral, neither overbought nor oversold. The STOCH value of 67.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MG.

Mistras Group Risk Analysis

Mistras Group disclosed 28 risk factors in its most recent earnings report. Mistras 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

Mistras Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EME	77 Outperform	$15.55B	15.90	37.25%	0.29%	15.76%	61.64%
PRIM	75 Outperform	$2.84B	15.89	13.67%	0.53%	11.40%	42.51%
FLR	72 Outperform	$5.21B	2.54	72.85%	―	5.43%	2094.12%
MG	67 Neutral	$289.22M	15.43	9.80%	―	3.43%	―
APG	67 Neutral	$9.07B	―	8.59%	―	1.30%	-36.24%
Sector *	62 Neutral	$7.25B	12.39	3.08%	3.39%	3.63%	-14.32%
TISI	52 Neutral	$85.91M	―	-161.69%	―	-1.20%	50.12%

* Industrials Sector Average

Performance Comparison

Mistras Group

9.32

-0.10

-1.06%

EME

EMCOR Group

342.02

-18.22

-5.06%

FLR

Fluor

31.02

-11.16

-26.46%

PRIM

Primoris Services

52.66

6.27

13.52%

TISI

Team

19.12

11.04

136.63%

APG

APi Group

32.37

-7.20

-18.20%

Mistras Group Earnings Call Summary

Earnings Call Date: Mar 5, 2025 | % Change Since: 1.41% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant achievements in adjusted EBITDA growth, cost management, and aerospace and defense performance, alongside effective debt reduction. However, challenges remain in the North American market, data analytics solutions, and the oil and gas industry. Overall, the company is optimistic about its future prospects with strategic initiatives in place.

Highlights

Record Adjusted EBITDA Growth

Adjusted EBITDA increased by over 25% year-over-year, with a margin expansion of 200 basis points, marking the highest margin since 2016.

Strong Performance in Aerospace and Defense

Revenue in the aerospace and defense industry increased by 13% on a full-year basis to $87 million, contributing to overall profitability.

Effective Cost Management

SG&A expenses decreased by 6.2% year-over-year, reaching the lowest level in over five years, contributing to significant operating leverage.

Successful Debt Reduction

The company reduced its bank debt by $20.1 million in Q4, lowering the leverage ratio to below 2.5x, the lowest since Q3 2018.

Positive Net Income and EPS

The company reported a net income of $19 million for 2024, with EPS reaching the highest level since 2016.

Lowlights

Decline in North America Revenue

North America segment revenue decreased by 7.5% in Q4 2024 due to a decline in the midstream industry and a weaker fall turnaround season.

Challenges in Data Analytics Solutions

The data analytics solutions business experienced delays, resulting in a revenue decline for 2024, despite expectations of growth.

Impact of Oil and Gas Industry Conditions

The midstream subcategory faced project delays in 2024, impacting overall performance in the oil and gas sector.

Company Guidance

During the MISTRAS Group's fourth quarter and full-year 2024 earnings call, the company provided several key financial metrics and guidance for the year ahead. The consolidated revenue for 2024 was reported at $729.6 million, marking a 3.4% increase over the previous year. Notably, the adjusted EBITDA saw a substantial rise of over 25% from the prior year, reaching $82.5 million, while the adjusted EBITDA margin expanded by 200 basis points, achieving the highest level since 2016. Operating income was $39.8 million, the highest since 2016, and the company generated $25.7 million in operating cash flow during the fourth quarter alone. The bank-defined leverage level dropped to below 2.5x, the lowest since 2018, as the company paid down $20.1 million in bank debt. For 2025, MISTRAS anticipates continued revenue growth across all segments and industries, with particular focus on expanding its data analytics solutions and increasing market share in the aerospace and defense industries, despite some uncertainty regarding tariffs and foreign exchange impacts. The company is also committed to maintaining disciplined spending, as evidenced by the 6.2% reduction in SG&A expenses.

Mistras Group Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Mistras Group Announces Passing of Founder

Neutral

Feb 7, 2025

On February 6, 2025, MISTRAS Group announced the passing of its founder and Chairman Emeritus, Dr. Sotirios J. Vahaviolos. Dr. Vahaviolos was a visionary leader in non-destructive testing and acoustic emission, dedicating over four decades to building MISTRAS into a global leader in testing and asset protection solutions. The company honors his legacy and assures stakeholders of a seamless transition with no changes to its management or strategic direction.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.