Natural Gas Services Group (NGS)
NYSE:NGS
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Natural Gas Services Group
(NYSE:NGS)
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Rating:70Outperform
Price Target:
$40.00
▲(4.99% Upside)
Action:ReiteratedDate: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
Recurring contract rental model and high utilization
High and rising rented horsepower with record utilization indicates a durable, recurring revenue base from contract compression. Sustained utilization supports pricing power, predictable cash flows, and higher operating leverage, which underpin long-term margin and earnings stability across business cycles.
Negative Factors
Elevated leverage after recent debt buildup
Material increase in leverage reduces financial flexibility and raises refinancing and interest-rate sensitivity. In cyclical energy markets this higher indebtedness heightens downside risk for margins and cash flow, constraining optionality for opportunistic M&A or large capex without deleveraging.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring contract rental model and high utilization
High and rising rented horsepower with record utilization indicates a durable, recurring revenue base from contract compression. Sustained utilization supports pricing power, predictable cash flows, and higher operating leverage, which underpin long-term margin and earnings stability across business cycles.
Read all positive factors
Natural Gas Services Group (NGS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$519.85M
Dividend Yield0.63%
Average Volume (3M)104.22K
Price to Earnings (P/E)21.2
Beta (1Y)1.29
Revenue Growth9.94%
EPS Growth14.68%
CountryUS
Employees245
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)1.60
Shares Outstanding12,590,213
10 Day Avg. Volume74,888
30 Day Avg. Volume104,219
Financial Highlights & Ratios
PEG Ratio1.47
Price to Book (P/B)1.54
Price to Sales (P/S)2.45
P/FCF Ratio6.50
Enterprise Value/Market Cap1.43
Enterprise Value/Revenue4.32
Enterprise Value/Gross Profit9.10
Enterprise Value/Ebitda9.65
Forecast
1Y Price Target
$46.33Price Target Upside21.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)1.94
Revenue Forecast (FY)$196.20M
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 primaril...
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 compress...
Natural Gas Services Group Earnings Call Summary
Earnings Call Date:Mar 16, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Positive
Overall the call emphasized strong operational execution and record financial results (rented horsepower +14%, record utilization 84.9%, record adjusted EBITDA and net income), continued fleet expansion and contracted deployments, return of capital to shareholders, and balance sheet flexibility. The principal negatives were a one-time physical inventory adjustment that depressed Q4 margin percentages (~300 bps), a $2.6M non-cash impairment on a property, an increased effective tax rate (~+4.4 percentage points YoY), higher maintenance capital needs as the fleet ages, and supply-chain lead-time challenges for certain high-end engines (>100 weeks). Management characterized the inventory issue as addressed and reiterated guidance and confidence for 2026 (adjusted EBITDA $90.5M–$95.5M), leaving the overall tone optimistic.Positive Updates
Record Rented Horsepower and High Utilization
Rented horsepower reached ~563,000 at year-end 2025, a 14% increase year-over-year, with fleet utilization at a record 84.9%.
Negative Updates
Q4 Adjusted Rental Gross Margin Percentage Decline
Fourth-quarter adjusted rental gross margin percentage was 58.5%, down roughly 300 basis points versus Q3 and below expectations; decline attributed to a physical inventory adjustment recorded in Q4 (described as a one-time, non-operational item).
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Q4-2025 Updates
Positive
Negative
Record Rented Horsepower and High Utilization
Rented horsepower reached ~563,000 at year-end 2025, a 14% increase year-over-year, with fleet utilization at a record 84.9%.
Read all positive updates
Company Guidance
For 2026 the company guided adjusted EBITDA of $90.5 million to $95.5 million, growth capital expenditures of $55 million to $70 million (about $5 million higher at the low end versus prior expectations), maintenance CapEx of $15 million to $18 million (after 2025 maintenance CapEx came in at the low end), and an effective tax rate of approximately 25%; management also said it is contracted to deploy ~50,000 horsepower of new large‑horsepower units (distributed relatively evenly through the year) with electric motor‑drive units expected to represent a similar percentage of additions as in 2025 (large‑horsepower electric additions were ~30% of 2025 additions), expects adjusted rental gross margin to expand above the 2025 level of 60.6% toward the low‑sixties, and will remain committed to a low‑leverage balance sheet and returning capital to shareholders (after returning ~$2.6 million in H2 2025); the company enters 2026 with 563,000 rented horsepower and 84.9% fleet utilization.Natural Gas Services Group Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
63
Positive
Cash Flow
70
Positive
| 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 | 63.88M | 56.64M | 32.16M | 14.35M | 1.66M |
| EBITDA | 77.10M | 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
Neutral
38.10
Price Trends
37.93
Positive
35.59
Positive
30.94
Positive
Market Momentum
0.18
Positive
48.73
Neutral
66.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NGS, the sentiment is Neutral. The current price of 38.1 is below the 20-day moving average (MA) of 38.66, above the 50-day MA of 37.93, and above the 200-day MA of 30.94, indicating a neutral trend. The MACD of 0.18 indicates Positive momentum. The RSI at 48.73 is Neutral, neither overbought nor oversold. The STOCH value of 66.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NGS.
Natural Gas Services Group Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $610.62M | 19.13 | 29.42% | ― | 26.86% | 149.24% | |
70 Outperform | $407.51M | 33.71 | 5.12% | 1.71% | 0.25% | -27.15% | |
70 Outperform | $519.85M | 21.17 | 7.43% | 0.63% | 9.94% | 14.68% | |
68 Neutral | $665.45M | 36.61 | -3.11% | ― | -0.05% | 94.53% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
60 Neutral | $676.04M | -3.63 | -16.46% | ― | -3.41% | -982.67% | |
52 Neutral | $119.99M | -5.56 | -21.91% | ― | -19.24% | -162.16% |
* Energy Sector Average
NGS
Natural Gas Services Group
40.80
21.78
114.57%
FTK
Flotek
16.65
9.37
128.71%
FET
Forum Energy Tech
59.53
45.71
330.75%
OIS
Oil States International
11.20
7.03
168.59%
GEOS
Geospace Technologies
9.16
2.53
38.16%
RNGR
Ranger Energy Services
17.06
5.39
46.16%
Natural Gas Services Group Corporate Events
Business Operations and StrategyDividendsFinancial Disclosures
Natural Gas Services Highlights Record Growth and Dividend Expansion
Positive
Mar 18, 2026
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 lo...
Dividends
Natural Gas Services Maintains Quarterly Dividend, Signals Confidence
Positive
Feb 9, 2026
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 re...
Executive/Board ChangesShareholder Meetings
Natural Gas Services Group Announces Chairman Emeritus Retirement
Neutral
Jan 27, 2026
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 leader...
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.