Natural Gas Services Group (NGS) AI Stock Analysis

• Market Cap: $463.35M
• Dividend Yield: 0.63%
• Average Volume (3M): 105.40K
• Price to Earnings (P/E): 21.2
• Beta (1Y): 1.43
• Revenue Growth: 9.53%
• EPS Growth: 15.48%
• Country: US
• Employees: 245
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.32
• Shares Outstanding: 12,568,917
• 10 Day Avg. Volume: 121,705
• 30 Day Avg. Volume: 105,404
• PEG Ratio: 1.47
• Price to Book (P/B): 1.54
• Price to Sales (P/S): 2.45
• P/FCF Ratio: 6.50
• Enterprise Value/Market Cap: 1.51
• Enterprise Value/Revenue: 4.06
• Enterprise Value/Gross Profit: 6.96
• Enterprise Value/Ebitda: 10.64
• 1Y Price Target: $42.00
• Price Target Upside: 14.10% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 1.94
• Revenue Forecast (FY): $195.13M

• Rating: 70 Outperform
• Price Target: $40.00 ▲(8.67% Upside)
• Action: Reiterated Date: 03/19/26
• Date: Action: Reiterated 03/19/26

The score is primarily supported by improving fundamentals (growth, profitability, and stronger cash generation) and a constructive earnings outlook with upbeat 2026 guidance. The main constraints are increased balance-sheet leverage and mixed near-term technical momentum, while valuation appears only moderately attractive given the P/E and modest dividend yield.

Positive Factors

Revenue and Profitability Recovery

Multi-year revenue growth and a return to sustained profitability indicate the business has scaled its rental and services model. Higher revenue base with positive margins improves resilience, funds reinvestment, and supports durable operating leverage versus pre-profit years.

Contracted Fleet & High Utilization

A large, highly utilized contract-compression fleet creates recurring rental revenue and strong cash predictability. Contracted deployments and high utilization limit revenue volatility, support pricing leverage, and underpin long-term growth visibility for equipment investments.

Strong Operating Cash Flow & FCF Improvement

Consistent, material operating cash generation and a return to positive free cash flow strengthen funding for growth capex, maintenance needs, and shareholder returns. Durable cash conversion reduces financing dependence and supports strategic flexibility over the next several years.

Negative Factors

Rising Leverage

Material increase in debt-to-equity reduces financial flexibility and raises refinancing and interest-rate sensitivity. Higher leverage limits ability to absorb commodity cycles or fund opportunistic M&A without adding capital, increasing long-term balance-sheet risk.

Higher Maintenance Capital Needs

An aging, larger fleet implies rising recurring maintenance cycles and capital outlays. Elevated maintenance CapEx compresses free cash flow and operating margins over time, forcing tougher trade-offs between growth spending, deleveraging, and shareholder returns.

Supply-Chain / Lead-Time Risk

Extremely long component lead times constrain the pace of capacity additions and delay contracted deployments, risking timing of revenue and squeezing margins via higher replacement costs. This structural supply constraint limits agile scaling in response to 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

NGS generates revenue primarily by providing compression-related products and services to oil and gas producers and midstream operators. A key revenue stream is contract compression, where NGS supplies, operates, and maintains natural gas compression units for customers under service agreements and earns recurring fees tied to making the equipment available and/or operating it. Another major revenue stream is the sale and/or fabrication of compression equipment and related packages, where NGS earns revenue from delivering equipment to customers. NGS also earns aftermarket and service revenue from supporting installed equipment through maintenance, parts sales, repair, and other field services; this work can apply both to NGS-owned fleet units and customer-owned equipment. Factors that commonly influence NGS’s earnings include customer activity levels in upstream and midstream natural gas markets, utilization of its contract compression fleet, and demand for new equipment and aftermarket services. Specific significant partnerships: null.

Natural Gas Services Group Financial Statement Overview

Summary

Strong multi-year revenue growth and a clear return to profitability with robust operating cash flow and improved free cash flow in 2025. Offsetting factors are materially higher leverage versus prior years and notable margin/free-cash-flow volatility.

Income Statement

Revenue has expanded strongly from 2020 to 2025 (from ~$68M to ~$172M), with especially strong growth in 2023 and continued gains into 2025. Profitability has improved meaningfully versus earlier losses (2021–2022), with 2025 showing solid net profitability (~11.6% of revenue) and a much higher gross profit level than prior years. A key watch-out is margin volatility—earnings quality appears less consistent year-to-year (e.g., 2025 EBITDA margin notably lower than 2024), suggesting results can swing with pricing, utilization, or cost structure.

Balance Sheet

The company has built a larger asset base while maintaining positive equity, and returns on equity have improved versus the loss years, reaching ~7.3% in 2025. However, leverage has risen materially: total debt increased to ~$230M in 2025 and debt relative to equity moved higher (from ~0.11 in 2022 to ~0.84 in 2025). This higher leverage reduces financial flexibility and increases sensitivity to industry downturns or refinancing conditions.

Cash Flow

Operating cash generation is a clear strength, with operating cash flow remaining positive and robust in 2024–2025 (~$65M and ~$63M). Free cash flow improved dramatically, swinging from deeply negative in 2023 to strongly positive in 2025 (~$65M), and in 2025 free cash flow slightly exceeded net income, which is a healthy sign for earnings cash conversion. The main weakness is volatility—free cash flow was negative in 2022–2024 (except 2020–2021), indicating periods of heavy investment or working-capital swings that can pressure liquidity in weaker cycles.

Breakdown	Dec 2025	Dec 2024	Mar 2024	Mar 2023	Dec 2021
Income Statement
Total Revenue	172.31M	156.74M	121.17M	84.83M	72.42M
Gross Profit	100.54M	56.64M	32.16M	14.35M	1.66M
EBITDA	36.42M	64.94M	37.25M	24.44M	13.68M
Net Income	19.93M	17.23M	4.75M	-569.00K	-9.18M
Balance Sheet
Total Assets	586.79M	492.53M	478.73M	328.25M	306.49M
Cash, Cash Equivalents and Short-Term Investments	0.00	2.14M	2.75M	3.37M	22.94M
Total Debt	230.00M	170.15M	165.26M	25.35M	285.00K
Total Liabilities	312.07M	237.47M	242.84M	98.17M	70.58M
Stockholders Equity	274.72M	255.06M	235.89M	230.08M	235.91M
Cash Flow
Free Cash Flow	64.90M	-6.39M	-135.91M	-37.36M	2.58M
Operating Cash Flow	62.93M	65.50M	18.03M	27.76M	28.29M
Investing Cash Flow	-121.30M	-71.44M	-153.89M	-65.08M	-25.66M
Financing Cash Flow	56.23M	5.33M	135.23M	17.75M	-8.61M

Natural Gas Services Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 36.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NGS, the sentiment is Positive. The current price of 36.81 is below the 20-day moving average (MA) of 37.77, above the 50-day MA of 36.06, and above the 200-day MA of 29.48, indicating a neutral trend. The MACD of 0.19 indicates Positive momentum. The RSI at 48.58 is Neutral, neither overbought nor oversold. The STOCH value of 33.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NGS.

Natural Gas Services Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTK	71 Outperform	$615.29M	19.13	29.42%	―	23.56%	242.78%
NGS	70 Outperform	$463.35M	21.17	7.43%	0.63%	9.53%	15.48%
FET	68 Neutral	$653.42M	-45.45	-3.11%	―	-1.29%	-123.25%
RNGR	68 Neutral	$404.59M	24.42	5.54%	1.71%	-5.47%	2.24%
OIS	66 Neutral	$738.13M	-3.63	-16.46%	―	-11.02%	―
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
GEOS	47 Neutral	$166.51M	-5.56	-21.91%	―	-18.29%	-43.05%

Natural Gas Services Group Corporate Events

Natural Gas Services Highlights Record Growth and Dividend Expansion

Natural Gas Services Group Inc., a leading U.S. provider of rental natural gas compression equipment and services for oil and gas production and processing facilities, operates from its Southlake, Texas headquarters with engineering and service locations across major domestic basins and focuses on large-horsepower and electric compression units to support long-term, higher-return contracts. The company has reported that in 2025 it achieved record rented horsepower, record utilization and record rental revenue and adjusted EBITDA, initiated and raised its dividend as part of a broader return-of-capital program, added roughly 70,000 horsepower weighted to large electric units, and entered 2026 with strong contracted growth, continued market share gains and favorable industry tailwinds from robust compression demand, LNG export expansion and rising power needs from data centers, while maintaining low leverage and actively monetizing non-operating assets such as tax refunds and real estate.

NGS also highlighted that extended lead times for large-horsepower equipment are supporting pricing strength and high utilization, and the firm is investing in data-driven fleet optimization to enhance uptime and predictive maintenance. Management indicated that for 2026 the company is contracted to deploy about 50,000 horsepower of new large units, expects continued momentum in rental revenue per horsepower and structural industry growth, and continues to evaluate strategic, accretive M&A opportunities, positioning the business for sustained expansion and shareholder value creation despite macro, regulatory and geopolitical risks to oil and gas markets.

The most recent analyst rating on (NGS) stock is a Hold with a $40.00 price target. To see the full list of analyst forecasts on Natural Gas Services Group stock, see the NGS Stock Forecast page.

Natural Gas Services Maintains Quarterly Dividend, Signals Confidence

On February 9, 2026, Natural Gas Services Group announced that its board declared a quarterly cash dividend of $0.11 per share, equivalent to $0.44 per share on an annualized basis. The dividend will be paid on March 4, 2026, to shareholders of record as of the close of business on February 18, 2026.

The first-quarter 2026 dividend matches the fourth-quarter 2025 level and represents a 10% increase over the inaugural dividend paid in the third quarter of 2025, signaling a continuation of the company’s shareholder return program. The decision underlines the board’s confidence in the company’s financial position while maintaining flexibility, as future dividends remain subject to board approval based on business and financial conditions.

The most recent analyst rating on (NGS) stock is a Buy with a $39.00 price target. To see the full list of analyst forecasts on Natural Gas Services Group stock, see the NGS Stock Forecast page.

Natural Gas Services Group Announces Chairman Emeritus Retirement

On January 27, 2026, Natural Gas Services Group, Inc. announced that Stephen Taylor, its Chairman Emeritus and long-serving director, will retire from the Board at the 2026 Annual Meeting of Shareholders, concluding more than two decades of leadership that saw the company grow from a small compression fabricator into a large-scale rental compression platform and recognized industry leader. Taylor previously transitioned the CEO role to Justin Jacobs in February 2024 and moved from Chairman of the Board to Chairman Emeritus in June 2025, and his retirement marks the final step in a multi-year succession process; the Board is continuing its regular governance and succession planning, while Taylor, who retains a significant equity stake, and company leadership emphasize continuity, strong fundamentals, and confidence in NGS’s future direction for employees, customers, and shareholders.

The most recent analyst rating on (NGS) stock is a Buy with a $39.00 price target. To see the full list of analyst forecasts on Natural Gas Services Group stock, see the NGS Stock Forecast page.