Star Gas Partners (SGU) AI Stock Analysis

• Market Cap: $422.50M
• Dividend Yield: 6.14%
• Average Volume (3M): 26.27K
• Price to Earnings (P/E): 7.3
• Beta (1Y): 0.35
• Revenue Growth: 1.04%
• EPS Growth: 111.69%
• Country: US
• Employees: 3,039
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 0.89
• Shares Outstanding: 32,879,055
• 10 Day Avg. Volume: 22,371
• 30 Day Avg. Volume: 26,273
• PEG Ratio: 0.05
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 0.23
• P/FCF Ratio: 7.24
• Enterprise Value/Market Cap: 1.80
• Enterprise Value/Revenue: 0.41
• Enterprise Value/Gross Profit: 1.36
• Enterprise Value/Ebitda: 4.76
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $14.00 ▲(16.18% Upside)
• Action: Downgraded Date: 02/14/26
• Date: Action: Downgraded 02/14/26

SGU scores as a solid, value-leaning setup: the biggest positives are attractive valuation (low P/E and high yield) and improving operating/cash performance, supported by a constructive technical trend. The main constraints are mid-tier financial strength due to thin margins and only moderate cash-flow coverage versus debt, plus earnings-call headwinds from higher costs and weaker service profitability.

Positive Factors

Cash generation & conversion

Sustained positive free cash flow (~$69M, +14.5%) with FCF roughly 86% of net income indicates durable internal funding. This level of cash conversion supports ongoing distributions, bolt-on M&A funding and reinvestment in delivery/service assets, improving long-term financial flexibility.

Operational improvement & M&A contribution

Material EBITDA and volume gains (adjusted EBITDA +32%, volumes +14%) with recent acquisitions contributing to EBITDA show structurally improving operations. Consistent base-business margin management plus selective acquisitions can sustainably increase scale, route density and cost absorption over coming months.

Capital return and allocation

An expanded repurchase authorization alongside regular quarterly distributions signals management discipline on capital allocation. Retiring units and maintaining distributions support unit-level cash returns and indicate a long-term commitment to balancing investor payouts with balance-sheet optimization.

Negative Factors

Thin net margins

Net margins near 3.7% leave limited room for adverse swings in procurement or delivery costs. The retail propane model is commodity-linked and seasonal, so thin margins make earnings sensitive to weather, supply volatility and upkeep of service economics over multiple quarters.

Modest cash-flow coverage vs. debt

While leverage (debt/equity ~0.84x) is manageable, operating cash flow covers only ~18% of total debt, implying a long paydown horizon. This modest coverage reduces flexibility for large reinvestments or aggressive M&A if volumes or margins weaken, raising cyclical balance-sheet risk.

Service profitability pressure & rising operating costs

Deteriorating service gross profit and higher delivery/branch/G&A (+$11M, delivery +13%) signal structural cost pressure in labor, logistics and peak demand handling. Persistent service losses and rising fixed costs can erode unit economics and require sustained operational fixes to protect long-term margins.

Star Gas Partners Business Overview & Revenue Model

Company Description

Star Group, L.P. sells home heating and air conditioning products and services to residential and commercial home heating oil and propane customers in the United States. It also sells diesel fuel, gasoline, and home heating oil on a delivery only basis, as well as provide plumbing services; and installs maintains, and repairs heating and air conditioning equipment. As of September 30, 2021, the company served approximately 422,200 full service residential and commercial home heating oil and propane customers and 71,100 customers on a delivery only basis. It also sells gasoline and diesel fuel to approximately 26,700 customers. Kestrel Heat, LLC operates as the general partner of the company. The company was formerly known as Star Gas Partners, L.P. and changed its name to Star Group, L.P. in October 2017. Star Group, L.P. was incorporated in 1995 and is based in Stamford, Connecticut.

How the Company Makes Money

Star Gas Partners generates revenue primarily through the sale of propane and heating oil to its customers. The company employs a revenue model that includes both retail and wholesale distribution, allowing it to cater to a diverse customer base. Key revenue streams include the sale of propane for residential heating, commercial applications, and industrial uses. Additionally, SGU earns income from service-related activities, such as the installation and maintenance of propane tanks and heating systems. The company may also benefit from strategic partnerships with suppliers and distributors, enhancing its supply chain and allowing for competitive pricing. Seasonal demand fluctuations, especially during winter months, significantly impact the company’s earnings, as propane is a critical heating source in many regions.

Star Gas Partners Financial Statement Overview

Summary

Income statement and cash flow are improving but not standout: modest TTM revenue growth (+2.9%), moderate net margin (~3.7%), and positive free cash flow (~$69M, +14.5%) with decent earnings-to-FCF conversion (~86%). Offsetting this are thin operating profitability, uneven multi-year revenue trend, and only modest cash-flow coverage versus debt (operating cash flow ~18% of total debt). Balance-sheet risk is tempered by recovered equity and manageable leverage (~0.84x debt/equity TTM), but prior negative equity (2021–2022) and meaningful debt keep the profile mid-tier.

Income Statement

TTM (Trailing-Twelve-Months) revenue is modestly higher (about +2.9%), and profitability is solid with positive gross profit and operating income. Net margin is moderate (~3.7%) and improved versus 2023–2024 levels, showing better earnings power. However, revenue growth has been uneven over the last several years (declines in 2023–2024), and operating profitability remains relatively thin for the sector, which leaves results more sensitive to cost and demand swings.

Balance Sheet

Leverage is manageable in the latest periods with debt running at roughly 0.8–0.9x equity (TTM (Trailing-Twelve-Months) ~0.84x), and returns on equity are strong (~20% TTM (Trailing-Twelve-Months)). The key concern is historical balance-sheet fragility: equity was negative in 2021–2022, and leverage metrics were distorted in those years, highlighting higher financial risk through the cycle. While equity has since recovered, debt remains meaningful and keeps the balance sheet from scoring higher.

Cash Flow

Cash generation is positive with TTM (Trailing-Twelve-Months) free cash flow of ~$69M and healthy growth (about +14.5%). Free cash flow tracks earnings reasonably well (about 86% of net income TTM (Trailing-Twelve-Months)), supporting earnings quality. Offsetting this, cash flow coverage relative to debt is modest (TTM (Trailing-Twelve-Months) operating cash flow is about 18% of total debt), implying a longer paydown runway and less flexibility if conditions weaken.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	1.84B	1.78B	1.77B	1.95B	2.01B	1.50B
Gross Profit	559.26M	545.37M	470.33M	438.40M	451.63M	444.17M
EBITDA	159.52M	150.31M	92.60M	94.89M	93.05M	163.69M
Net Income	67.39M	72.82M	32.10M	29.34M	35.29M	87.74M
Balance Sheet
Total Assets	1.05B	937.33M	939.61M	875.48M	912.48M	853.86M
Cash, Cash Equivalents and Short-Term Investments	19.86M	24.68M	117.33M	45.19M	14.62M	4.77M
Total Debt	356.42M	285.26M	283.56M	243.75M	351.97M	285.49M
Total Liabilities	732.18M	640.55M	675.72M	611.75M	654.56M	575.66M
Stockholders Equity	328.51M	303.38M	269.61M	268.34M	-15.61M	-14.04M
Cash Flow
Free Cash Flow	64.85M	56.03M	100.33M	114.65M	15.21M	53.79M
Operating Cash Flow	80.33M	70.95M	110.98M	123.66M	33.91M	68.88M
Investing Cash Flow	-100.16M	-99.85M	-61.19M	-28.20M	-32.63M	-50.33M
Financing Cash Flow	-9.11M	-63.75M	22.35M	-64.89M	8.57M	-70.69M

Star Gas Partners Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 12.05
• 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 SGU, the sentiment is Neutral. The current price of 12.05 is below the 20-day moving average (MA) of 12.95, below the 50-day MA of 12.38, and above the 200-day MA of 11.67, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 53.52 is Neutral, neither overbought nor oversold. The STOCH value of 41.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SGU.

Star Gas Partners Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SUN	69 Neutral	$9.78B	27.96	5.60%	6.88%	-5.18%	-33.14%
SGU	67 Neutral	$422.50M	7.25	19.41%	6.14%	1.04%	111.69%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
CLNE	55 Neutral	$495.91M	―	-34.89%	―	2.59%	-192.73%
WKC	53 Neutral	$1.28B	-2.25	-23.84%	3.30%	-15.32%	-442.37%
CAPL	49 Neutral	$769.57M	19.73	―	10.09%	-10.27%	131.17%
AMTX	49 Neutral	$94.00M	-0.89	―	―	-30.91%	29.09%

Star Gas Partners Corporate Events

Star Gas Partners Expands Common Unit Repurchase Authorization

On February 10, 2026, the board of directors of the general partner of Star Group, L.P. authorized an increase in the number of common units the company may repurchase in open-market transactions to a total of 2.0 million units, effective February 24, 2026. All units acquired under this expanded repurchase authorization, which has no stated end date and may be discontinued at any time, will be retired, signaling a potential commitment to capital return and balance sheet optimization that could affect existing unitholders and the partnership’s unit supply in the market.

The most recent analyst rating on (SGU) stock is a Buy with a $14.50 price target. To see the full list of analyst forecasts on Star Gas Partners stock, see the SGU Stock Forecast page.

Star Gas Partners Announces Quarterly Cash Distribution

On January 15, 2026, Star Group, L.P. declared a quarterly distribution of $0.1850 per common unit for its fiscal first quarter, which ended on December 31, 2025, with a record date of January 26, 2026 and a payment date set for February 4, 2026. The distribution announcement underscored the partnership’s continued cash returns to unit holders following the end of its first fiscal quarter, providing income visibility for investors in a sector exposed to fuel price volatility, weather-driven demand and evolving energy and environmental regulations.

The most recent analyst rating on (SGU) stock is a Buy with a $13.00 price target. To see the full list of analyst forecasts on Star Gas Partners stock, see the SGU Stock Forecast page.