Natural Gas Services Group (NGS) AI Stock Analysis

• Market Cap: $227.74M
• Dividend Yield: N/A
• Average Volume (3M): 89.59K
• Price to Earnings (P/E): 13.4
• Beta (1Y): 1.07
• Revenue Growth: 29.36%
• EPS Growth: 261.48%
• Country: US
• Employees: 245
• Sector: Energy
• Sector Strength: 44
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 1.38
• Shares Outstanding: 12,506,522
• 10 Day Avg. Volume: 109,941
• 30 Day Avg. Volume: 89,588
• PEG Ratio: 0.05
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.73
• Price to Cash Flow (P/CF): 7.20
• P/FCF Ratio: 7.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $36.00
• Price Target Upside: 94.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Natural Gas Services Group shows strong financial performance with robust growth and efficient cash management. While the technical indicators suggest caution, the valuation is reasonable, and recent corporate developments, including positive earnings guidance, enhance the company's prospects. The combination of financial health, strategic management, and promising growth outlook makes the stock a strong contender in its industry.

Positive Factors

Financial Performance

NGS introduced 2025 EBITDA guidance of $74M-$78M, which is higher than the previous year, indicating positive growth expectations.

Market Demand

There is a strong demand for larger natural gas compressors, which is expected to drive higher rental prices.

Operational Performance

The higher adjusted gross margin led to 4Q24 EBITDA exceeding estimates, showing strong operational performance.

Negative Factors

Capital Expenditure

Natural Gas Services Group plans to increase capital expenditures in 2025 by at least 20% due to rising demand.

Natural Gas Services Group Business Overview & Revenue Model

Company Description

Natural Gas Services Group, Inc. provides natural gas compression services and equipment to the energy industry in the United States. It fabricates, manufactures, rents, and sells natural gas compressors and related equipment. The company primarily engages in the rental of compression units that provide small, medium, and large horsepower applications for unconventional oil and natural gas production. As of December 31, 2021, the company had 2,023 natural gas compression units in its rental fleet with 418,041 horsepower. The company also engages in the design, fabrication, and assembly of compressor components into compressor units for rental or sale; engineers and fabricates natural gas compressors; and designs and manufactures a line of reciprocating compressor frames, cylinders, and parts. In addition, it is involved in the design, fabrication, sale, installation, and service of flare stacks and related ignition and control devices for the onshore and offshore incineration of gas compounds, such as hydrogen sulfide, carbon dioxide, natural gas, and liquefied petroleum gases. Further, the company offers customer support services for its compressor and flare sales business; and exchange and rebuild program for small horsepower screw compressors. Its primary customers are exploration and production(E&P) companies that utilize compressor units for artificial lift applications; E&P companies that focuses on natural gas-weighted production; and midstream companies. Natural Gas Services Group, Inc. was incorporated in 1998 and is headquartered in Midland, Texas.

How the Company Makes Money

Natural Gas Services Group primarily makes money through the rental and sales of natural gas compression equipment. The company's revenue model is based on long-term rental agreements with clients, providing a stable and recurring revenue stream. Additionally, NGS earns revenue from the sales of its compression units and related aftermarket services, such as maintenance and repair. Key factors contributing to its earnings include the demand for natural gas, advancements in extraction technologies, and its ability to maintain strong relationships with key players in the energy sector.

Natural Gas Services Group Financial Statement Overview

Summary

Natural Gas Services Group exhibits strong financial health across all statements. The income statement highlights robust revenue and profit growth, the balance sheet shows excellent leverage management, and cash flow demonstrates strong cash generation capabilities. The company's strategic financial management positions it well for future growth and stability.

Income Statement

The company's income statement shows strong growth and profitability. Gross profit margin increased significantly to 56.13%, and net profit margin improved to 10.99% in 2024. Revenue growth is robust, with a 29.35% increase from 2023 to 2024. The EBIT and EBITDA margins are healthy, indicating efficient operations.

Balance Sheet

The balance sheet reflects a solid financial position. The company has eliminated its total debt, resulting in a debt-to-equity ratio of 0, enhancing financial stability. Return on Equity (ROE) improved to 6.75%, and the equity ratio is strong at 51.79%, indicating good leverage management and a solid equity base.

Cash Flow

Cash flow metrics are excellent, with significant improvement in free cash flow from negative in 2023 to $69.15 million in 2024. Operating cash flow to net income ratio is robust at 3.86, indicating strong cash generation relative to net income. The free cash flow growth rate is impressive, showcasing efficient cash management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
156.74M	121.17M	84.83M	72.42M	68.06M
	Gross Profit
87.99M	32.16M	14.35M	1.66M	7.43M
	EBIT
33.33M	10.46M	431.00K	-8.63M	-2.68M
	EBITDA
64.94M	37.25M	24.44M	13.68M	22.23M
	Net Income Common Stockholders
17.23M	4.75M	-569.00K	-9.18M	1.81M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.14M	2.75M	3.37M	22.94M	28.93M
	Total Assets
492.53M	478.73M	328.25M	298.51M	306.80M
	Total Debt
170.15M	164.00M	25.35M	285.00K	900.00K
	Net Debt
168.01M	161.25M	21.98M	-22.66M	-28.02M
	Total Liabilities
237.47M	242.84M	98.17M	62.60M	55.26M
	Stockholders Equity
255.06M	235.89M	230.08M	235.91M	251.54M
Cash Flow		Free Cash Flow
69.15M	-135.91M	-37.36M	2.82M	17.39M
	Operating Cash Flow
66.46M	18.03M	27.76M	28.53M	32.65M
	Investing Cash Flow
-71.44M	-153.89M	-65.08M	-25.66M	-15.16M
	Financing Cash Flow
4.37M	135.23M	17.82M	-8.85M	-157.00K

Natural Gas Services Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18.52
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NGS, the sentiment is Negative. The current price of 18.52 is below the 20-day moving average (MA) of 20.93, below the 50-day MA of 23.43, and below the 200-day MA of 22.66, indicating a bearish trend. The MACD of -0.75 indicates Negative momentum. The RSI at 42.95 is Neutral, neither overbought nor oversold. The STOCH value of 39.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NGS.

Natural Gas Services Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NGS	79 Outperform	$227.74M	13.45	7.02%	―	29.36%	261.48%
FTK	71 Outperform	$191.49M	18.95	9.73%	―	-0.55%	-74.83%
RNGR	70 Outperform	$281.45M	15.21	6.74%	1.71%	-10.29%	-14.30%
TTI	64 Neutral	$304.51M	2.82	56.37%	―	-4.34%	312.14%
FET	57 Neutral	$175.15M	―	-36.95%	―	10.50%	-493.15%
Sector *	57 Neutral	$7.56B	4.34	-4.83%	6.50%	-0.19%	-64.60%
OIS	53 Neutral	$210.24M	―	-1.62%	―	-11.47%	-187.17%

Natural Gas Services Group Corporate Events

Natural Gas Services Group Appoints New Board Member

On April 1, 2025, Natural Gas Services Group appointed J. Anthony Gallegos, Jr. to its Board of Directors, filling the vacancy left by David Bradshaw’s retirement in December 2024. Mr. Gallegos, with over 30 years of experience in the drilling industry, brings significant expertise to the Board, serving on the Audit and Safety & Sustainability Committees. His appointment is expected to enhance the company’s strategic direction and shareholder value as NGS continues to focus on growth and innovation in the natural gas compression sector.

Natural Gas Services Group Reports Strong 2024 Financials

Natural Gas Services Group reported strong financial performance for the fourth quarter and full year 2024, with significant growth in revenue, net cash from operations, and adjusted EBITDA. The company achieved a 17% increase in rented horsepower compared to the previous year and a 55% increase over two years, reflecting a strategic focus on large horsepower compression. Rental revenue rose by 36% from 2023 and 94% from 2022, driven by an upgraded fleet and higher pricing. The company also improved its asset utilization, reducing accounts receivable and increasing cash flow to fund growth. Looking ahead, Natural Gas Services Group anticipates continued growth in 2025 and 2026, with plans to expand its large horsepower rented fleet and capitalize on market opportunities.