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Mistras Group Inc (MG)
NYSE:MG
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Mistras Group
(NYSE:MG)
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Rating:61Neutral
Price Target:
$16.50
▲(7.98% Upside)
Action:ReiteratedDate:03/05/26
The score reflects improving earnings and constructive 2026 guidance, but is held back by weak cash conversion/working-capital pressure and limited top-line growth. Technicals are supportive (price above major averages), while valuation looks only fair given a ~23.6 P/E and no dividend yield support.
Positive Factors
Recurring Data & Labs growth
Significant growth in Data Solutions and a surge in laboratory work indicate a structural shift toward recurring, higher‑margin software/analytics and in‑lab services. That diversifies revenue away from purely time‑and‑materials field work, improving margin sustainability and reducing cyclical exposure over the medium term.
Record EBITDA & margin expansion
Consistent margin improvement and record adjusted EBITDA reflect operational leverage and better pricing/mix from higher‑value services. Durable margin expansion supports cash generation potential and provides buffer against revenue flatness, making earnings more resilient over the next several quarters.
Clear guidance & debt reduction plan
Management's explicit multi‑point guidance, targeted CapEx to remove capacity constraints, and a stated $20M debt paydown demonstrate disciplined capital allocation. This roadmap, if executed, should strengthen liquidity, lower leverage risk, and enable sustained investment in growth areas over 2–6 months and beyond.
Negative Factors
Elevated accounts receivable
A materially higher AR balance lengthens the cash conversion cycle and directly pressures near‑term liquidity. Unless AR is reduced, working‑capital strain can impede targeted debt reduction and limit free‑cash‑flow availability for strategic investments, making balance‑sheet repair harder over coming quarters.
Volatile and weakened free cash flow
Sharp FCF deterioration signals fragile cash conversion driven by ERP stabilization, restructuring charges, and higher CapEx. Persistent volatility reduces financial flexibility, raises refinancing risk, and can delay deleveraging or ROI on growth initiatives until working‑capital and ERP issues are resolved.
Concentration risk: oil & gas exposure
Heavy exposure to oil & gas projects keeps revenue tied to a cyclical sector and project timing. Even with gains in aerospace, power, and data, continued dependence on oil & gas undermines revenue predictability and leaves topline vulnerable to sector‑specific slowdowns over the medium term.
Mistras Group (MG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$446.13M
Dividend YieldN/A
Average Volume (3M)165.04K
Price to Earnings (P/E)23.6
Beta (1Y)0.96
Revenue Growth-3.20%
EPS Growth60.03%
CountryUS
Employees4,800
SectorIndustrials
Sector Strength72
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)0.25
Shares Outstanding31,595,562
10 Day Avg. Volume131,747
30 Day Avg. Volume165,043
Financial Highlights & Ratios
PEG Ratio-2.06
Price to Book (P/B)1.69
Price to Sales (P/S)0.55
P/FCF Ratio47.83
Enterprise Value/Market Cap1.48
Enterprise Value/Revenue0.91
Enterprise Value/Gross Profit3.41
Enterprise Value/Ebitda7.70
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1
Revenue Forecast (FY)$741.31M
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 generates revenue primarily through the provision of its core services, which include non-destructive testing, inspection services, and engineering solutions. The company's revenue model is largely based on service contracts, project-based work, and long-term agreements with clients in various industries. Key revenue streams include inspections for infrastructure integrity, maintenance services, and consulting on asset reliability. Additionally, Mistras Group benefits from strategic partnerships with major corporations and government entities, which enhance its market reach and service offerings. The company also invests in technology development and innovation, allowing it to offer advanced solutions that meet evolving industry standards and client needs, further contributing to its earnings.
Mistras Group Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Shows operating profit or loss for each of the company’s business segments, highlighting which lines actually generate earnings after costs. Reveals margin strength, operational efficiency, and where management should focus investment or cost control to sustain profitability and reduce business risk.
Shows operating profit or loss for each of the company’s business segments, highlighting which lines actually generate earnings after costs. Reveals margin strength, operational efficiency, and where management should focus investment or cost control to sustain profitability and reduce business risk.
Data provided by:
The Fly
The FlyMistras Group Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call highlights a strong operational turnaround and margin recovery: record adjusted EBITDA, substantial Q4 margin expansion, double-digit growth in strategic end markets (notably aerospace & defense and power generation), and substantial growth in labs and data solutions. These positive operational outcomes are tempered by tangible near-term cash conversion and working capital challenges (sharp drop in full‑year free cash flow, rising accounts receivable), elevated restructuring and CapEx investments, and continued dependence on oil & gas demand for revenue upside. Management provided a clear 2026 plan and guidance, emphasizing targeted, ROI-focused investments while aiming to reduce leverage, which supports a constructive outlook despite the near-term liquidity headwinds.Q4-2025 Updates
Positive Updates
Quarterly Revenue Growth and Market Wins
Consolidated revenue grew 5.1% in Q4 2025 vs prior year, driven by double-digit growth in key end markets and new contract wins (e.g., Bechtel/Woodside LNG project and data center engagements). Aerospace & defense grew $4.5M (+21.9% Q/QY), power generation grew $3.3M (+33.2% Q/QY), industrials +6.7% and infrastructure +26.8% in the quarter.
Record Q4 Adjusted EBITDA and Margin Expansion
Q4 adjusted EBITDA was $24.8M, up 18.2% year-over-year, with an adjusted EBITDA margin of 13.7%, a 160 basis point improvement versus prior-year quarter — the highest Q4 adjusted EBITDA and margin in company history.
Significant Laboratory and Data Solutions Performance
Laboratories business delivered a record performance in Q4 with a 661% increase vs prior year. Data Solutions / PCMS offerings grew 20.7% in 2025 and 25.2% year-over-year for the full year, highlighting growing recurring revenue from software/analytics.
Gross Profit and Full-Year EBITDA Record
Full year gross profit increased to nearly $205.0M (+6.4% YoY) with a 190 basis point improvement in gross margin to 28.4%. Full-year adjusted EBITDA was a company record at $91.1M with an EBITDA margin of 12.6%, exceeding prior outlook.
Returned to Positive Free Cash Flow and Strengthened Liquidity Position
Management delivered positive free cash flow in 2025 and generated cash from operations in the year. Net debt improved slightly to $150.0M (down $1.3M YoY) and bank-defined leverage remained well within covenant at ~2.5x (below 3.75x), with a stated plan to reduce leverage to ~2.0x in 2026 via targeted $20M paydown.
Clear 2026 Guidance and Strategic Roadmap
Management provided a 2026 outlook: revenue $730M–$750M and adjusted EBITDA $91M–$93M, clarified a targeted CapEx increase to ~4.5% of revenue to remove capacity constraints (particularly in in-lab aerospace & defense) and reiterated longer-term goals of ~5% CAGR to 2030 and a ~15% target EBITDA margin.
Negative Updates
Full-Year Free Cash Flow Decline
Full-year free cash flow declined materially to $3.8M in 2025 from $27.1M in 2024, driven by elevated DSO during ERP stabilization, higher restructuring activity, and growth-related CapEx — a significant deterioration in cash conversion vs prior year.
Elevated Accounts Receivable and Working Capital Pressure
Total accounts receivable at 12/31/2025 were $154.7M, up $27.4M versus $127.3M at 12/31/2024, attributed to timing of working capital and ERP stabilization; management flagged AR reduction as a priority for 2026.
Increased Restructuring and One-Time Costs
Recorded $12.6M of reorganization and other costs for full year 2025 (including $4.8M in Q4) and referenced $7.0M of increased restructuring charges that negatively impacted cash flow and earnings comparability in 2025.
Higher Capital Spending and Near-Term Cash Impact
CapEx rose to $29.2M in 2025 (vs $23.0M prior year, +$6.2M) and management will maintain elevated CapEx (~4.5% of revenue) in 2026–2027 to expand in‑lab capacity and invest in Data Solutions (AI) — a near-term drag on free cash flow though positioned as targeted, ROI-driven investment.
Dependence on Oil & Gas and Revenue Uncertainty
Oil & gas remains a large portion of revenue and management noted anticipated declines in oil & gas revenue due to project timing and lab closures; 2026 guidance explicitly depends on oil & gas market activity and assumes no macro acceleration or acquisitions, leaving revenue upside contingent on that market.
GAAP Net Income and Some Profitability Nuances
Full-year GAAP net income decreased to $16.8M ($0.53/sh) from $19.0M ($0.60/sh) in the prior year. Management also noted reclassifications between SG&A and cost of revenue and foreign translation impacts that complicate direct comparability of certain margins and expense lines.
Company Guidance
Management guided 2026 full‑year revenue of $730–$750 million and adjusted EBITDA of $91–$93 million (with adjusted EBITDA margins expected to remain resilient versus 2025’s $91.1M and 12.6% margin), while increasing CapEx to ~4.5% of revenue (up from a ~3% five‑year average) through 2027, targeting net income and EPS above 2025 levels (2025 GAAP NI $16.8M / $0.53; non‑GAAP NI $28.1M / $0.88), an effective tax rate in the mid‑20% range, no assumed contribution from acquisitions or a macro oil & gas rebound, a planned ~$20M debt paydown in 2026 to target a bank leverage ratio of ~2.0x (from ~2.5x at 12/31/25), and operational priorities to improve cash‑flow conversion and lower accounts receivable (AR was $154.7M at 12/31/25).Mistras Group Financial Statement Overview
Summary
Profitability has improved versus the 2023 loss, with steady gross margins (~28–30%), but revenue is broadly flat and net margins remain thin (~2–3%). Balance sheet leverage appears moderate-to-elevated, and the latest-period reporting anomalies (2025 equity and cash flow fields showing as zero in the statements dataset) reduce confidence despite management citing positive 2025 free cash flow and a plan to pay down debt.Income Statement
Revenue has been broadly flat in recent years (2025: $724M vs. 2024: $730M; modest growth in 2021–2024), suggesting limited top-line momentum. Profitability improved materially from the 2023 loss to positive net income in 2024 ($19.0M) and 2025 ($16.8M), and gross margin has remained fairly steady (~28–30%). However, net margins are still thin (~2–3% in 2024–2025) and earnings have been volatile historically (large loss in 2020 and another loss in 2023), which keeps the score mid-range.58
Neutral
Balance Sheet
Leverage looks moderate-to-elevated in the years where equity is reported, with debt running around $200M+ and debt relative to equity around ~1.0–1.25x (2020–2024), which can constrain flexibility if profitability softens. Total assets have been relatively stable (~$523M–$583M). A key concern is the 2025 report showing stockholders’ equity as $0 (and related leverage/return measures as 0), which is inconsistent with prior years and creates uncertainty around the true capital position, weighing on the score.52
Neutral
Cash Flow
Cash generation was solid in 2020–2024, with operating cash flow positive each year (e.g., $50.1M in 2024) and free cash flow generally positive (e.g., $27.1M in 2024). That said, free cash flow has been uneven (very low in 2023) and the 2025 figures show operating cash flow and free cash flow at $0 with a -100% free-cash-flow growth rate, indicating either a sharp deterioration or missing/uncaptured cash-flow data for that period—either way it increases risk and lowers confidence.46
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 724.02M | 729.64M | 705.47M | 687.37M | 677.13M |
| Gross Profit | 194.13M | 213.11M | 203.81M | 198.17M | 197.15M |
| EBITDA | 85.98M | 74.32M | 32.20M | 53.09M | 53.09M |
| Net Income | 16.84M | 18.96M | -17.45M | 6.50M | 3.86M |
Balance Sheet | |||||
| Total Assets | 578.78M | 523.04M | 534.78M | 534.90M | 562.20M |
| Cash, Cash Equivalents and Short-Term Investments | 28.01M | 18.32M | 17.65M | 20.49M | 24.11M |
| Total Debt | 242.62M | 201.50M | 217.50M | 215.87M | 226.12M |
| Total Liabilities | 343.14M | 324.14M | 344.27M | 336.15M | 361.28M |
| Stockholders Equity | 235.65M | 198.57M | 190.19M | 198.45M | 200.68M |
Cash Flow | |||||
| Free Cash Flow | 8.31M | 27.14M | 3.10M | 12.99M | 22.98M |
| Operating Cash Flow | 32.98M | 50.13M | 26.75M | 26.41M | 42.26M |
| Investing Cash Flow | -25.12M | -21.37M | -22.13M | -12.24M | -18.55M |
| Financing Cash Flow | -595.00K | -27.40M | -7.71M | -16.32M | -23.25M |
Mistras Group Technical Analysis
Negative
15.28
Price Trends
14.45
Negative
13.16
Positive
10.97
Positive
Market Momentum
-0.03
Positive
43.37
Neutral
47.08
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 15.28 is above the 20-day moving average (MA) of 14.82, above the 50-day MA of 14.45, and above the 200-day MA of 10.97, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 43.37 is Neutral, neither overbought nor oversold. The STOCH value of 47.08 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 29 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.52B | 27.53 | 27.45% | 1.29% | -2.28% | -9.94% | |
72 Outperform | $6.73B | 22.52 | 21.82% | 1.30% | 3.31% | 2.58% | |
70 Outperform | $5.36B | 10.53 | 16.19% | 2.73% | 4.77% | -22.78% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $446.13M | 23.60 | 7.67% | ― | -3.20% | 60.03% | |
56 Neutral | $5.08B | 9.68 | -18.10% | ― | 15.45% | -488.24% | |
52 Neutral | $955.94M | -36.39 | -30.45% | ― | 41.61% | -1.76% |
* Industrials Sector Average
MG
Mistras Group
14.17
4.16
41.56%
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REZI
Resideo Technologies
33.60
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85.64%
EVLV
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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.