Natural Gas Services Group (NGS) AI Stock Analysis

• Market Cap: $353.82M
• Dividend Yield: 0.35%
• Average Volume (3M): 58.10K
• Price to Earnings (P/E): 19.8
• Beta (1Y): 1.33
• Revenue Growth: 14.77%
• EPS Growth: 34.74%
• Country: US
• Employees: 245
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.41
• Shares Outstanding: 12,542,314
• 10 Day Avg. Volume: 67,389
• 30 Day Avg. Volume: 58,101
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.43
• Enterprise Value/Revenue: 3.09
• Enterprise Value/Gross Profit: 6.49
• Enterprise Value/Ebitda: 7.33
• 1Y Price Target: $34.00
• Price Target Upside: 18.14% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 78 Outperform
• Price Target: $32.00 ▲(11.19% Upside)

Natural Gas Services Group receives a strong overall score driven by solid financial performance and a positive earnings call that highlighted record metrics and increased guidance. Technical analysis supports the bullish outlook with positive momentum indicators. The valuation is fair, supporting the potential for future growth. Despite some operational challenges, the company's strategic initiatives and strong cash generation underpin a favorable outlook.

Positive Factors

Revenue Growth

The consistent increase in rental revenue indicates strong demand for NGS's services, reflecting its solid market position and potential for sustained growth.

Cash Generation

The initiation of dividends and share repurchase program highlights robust cash flow, signaling financial strength and confidence in future earnings.

Fleet Utilization

High fleet utilization rates suggest effective asset management and operational efficiency, supporting long-term profitability and market competitiveness.

Negative Factors

Operational Efficiency

Decreased gross margin due to idle facility costs indicates challenges in operational efficiency, which could impact profitability if not addressed.

Leadership Transition

Leadership changes can disrupt strategic continuity and operational stability, posing risks during the transition period.

Profitability Margins

Stable net profit margins suggest limited improvement in profitability, indicating potential pressure on cost management and operational efficiency.

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 through the rental and sale of natural gas compression equipment and services. The company has a diversified revenue model that includes long-term rentals, short-term rentals, and outright sales of equipment. Key revenue streams come from contracts with oil and gas producers and midstream companies that require compression services to move natural gas through pipelines. Additionally, NGS may engage in maintenance and support services for its equipment, which can provide recurring revenue. Strategic partnerships with energy companies and involvement in large-scale natural gas projects further enhance its earnings potential, as these collaborations can lead to long-term contracts and increased market share.

Natural Gas Services Group Financial Statement Overview

Summary

Natural Gas Services Group demonstrates solid financial health with strong revenue growth and improved profitability margins. The balance sheet is stable with moderate leverage, and the company shows strong cash flow generation. While there are areas for improvement in profitability and operational efficiency, the overall financial position is positive, with a strong trajectory for future growth.

Income Statement

Natural Gas Services Group shows strong revenue growth with a TTM increase of 1.79%. The gross profit margin has improved significantly to 53.14% in TTM, reflecting better cost management. However, the net profit margin remains relatively stable at around 10.92%, indicating room for improvement in profitability. The EBIT and EBITDA margins have decreased slightly in TTM, suggesting potential pressure on operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is moderate at 0.68, indicating a balanced approach to leveraging. Return on equity has improved to 6.94% in TTM, showing better utilization of equity. The equity ratio stands at 50.65%, reflecting a solid equity base. Overall, the balance sheet is stable with manageable leverage.

Cash Flow

The cash flow statement reveals a robust free cash flow growth of 50.15% in TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy at 2.73, suggesting efficient cash conversion. However, the free cash flow to net income ratio has decreased to 0.46, which could indicate increased capital expenditures or other investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	164.11M	156.74M	121.17M	84.83M	72.42M	68.06M
Gross Profit	78.24M	56.64M	32.16M	14.35M	1.66M	7.43M
EBITDA	69.30M	64.94M	37.25M	24.44M	13.68M	22.23M
Net Income	17.92M	17.23M	4.75M	-569.00K	-9.18M	1.81M
Balance Sheet
Total Assets	525.53M	492.53M	478.73M	328.25M	298.51M	306.80M
Cash, Cash Equivalents and Short-Term Investments	325.00K	2.14M	2.75M	3.37M	22.94M	28.93M
Total Debt	182.16M	170.15M	164.00M	25.35M	285.00K	900.00K
Total Liabilities	259.31M	237.47M	242.84M	98.17M	62.60M	55.26M
Stockholders Equity	266.21M	255.06M	235.89M	230.08M	235.91M	251.54M
Cash Flow
Free Cash Flow	-1.31M	69.15M	-135.91M	-37.36M	2.82M	17.39M
Operating Cash Flow	67.61M	66.46M	18.03M	27.76M	28.53M	32.65M
Investing Cash Flow	-88.52M	-71.44M	-153.89M	-65.08M	-25.66M	-15.16M
Financing Cash Flow	17.62M	4.37M	135.23M	17.82M	-8.85M	-157.00K

Natural Gas Services Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 28.78
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 28.78 is above the 20-day moving average (MA) of 27.06, above the 50-day MA of 25.67, and above the 200-day MA of 24.45, indicating a bullish trend. The MACD of 0.74 indicates Negative momentum. The RSI at 69.13 is Neutral, neither overbought nor oversold. The STOCH value of 92.41 is Negative, 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
TTI	82 Outperform	785.02M	6.80	39.56%	―	-3.23%	1031.00%
NGS	78 Outperform	$353.82M	19.81	7.00%	0.35%	14.77%	34.74%
RNGR	74 Outperform	316.29M	14.44	8.09%	1.59%	-3.22%	55.46%
FTK	65 Neutral	437.42M	33.21	19.64%	―	21.72%	98.73%
FET	60 Neutral	342.46M	-3.23	-32.77%	―	3.86%	-294.41%
OIS	53 Neutral	375.67M	55.21	-1.65%	―	-12.15%	―
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

Natural Gas Services Group Corporate Events

Natural Gas Services Group Initiates Dividend, Share Buyback

Natural Gas Services Group reported a record second quarter in 2025, driven by exceptional field service and the performance of its smart-enabled large horsepower fleet. The company achieved an all-time high in rented horsepower, with strong rental revenue and gross margin. Adjusted EBITDA for the second quarter was $19.7 million, contributing to a first-half adjusted EBITDA of $39 million. The company increased its 2025 adjusted EBITDA guidance to $76 to $80 million, supported by new large horsepower unit deployments. In July, NGS initiated its inaugural quarterly dividend and authorized a share repurchase program, highlighting its cash generation durability and confidence in its outlook. Despite ongoing market volatility, NGS remains optimistic about its growth prospects, driven by increasing demand for natural gas compression and a strong foundation for 2026.

Natural Gas Services Group Declares First Quarterly Dividend

On July 30, 2025, Natural Gas Services Group, Inc. announced its Board of Directors declared the company’s first-ever quarterly cash dividend of $0.10 per share, amounting to $0.40 annually. This dividend, payable on August 22, 2025, signifies a milestone reflecting the company’s strong financial performance and commitment to shareholder value. The announcement also included the release schedule for the company’s second quarter 2025 financial results, set for August 11, 2025, with a conference call to follow on August 12, 2025.

Natural Gas Services Group Appoints New Chairman

On June 16, 2025, Natural Gas Services Group announced the transition of Stephen C. Taylor from Chairman of the Board to Chairman Emeritus, with Donald J. Tringali appointed as the new Chairman. Taylor, who has been instrumental in the company’s growth and transformation over the past two decades, will continue to serve as a director. His leadership saw the expansion of NGS into a national compression platform with significant growth in EBITDA. The transition marks a significant milestone, positioning NGS for continued success with Tringali bringing valuable corporate governance experience to his new role.

Natural Gas Services Group Holds Key Shareholder Meeting

On June 5, 2025, Natural Gas Services Group held a shareholder meeting where several key proposals were voted on. The shareholders elected three directors for varying terms, approved executive compensation, amended the 2019 Equity Incentive Plan to increase shares and extend its term, and ratified the appointment of Ham, Langston & Brezina LLP as the independent registered public accounting firm for 2025.