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Star Gas Partners (SGU)
NYSE:SGU
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Star Gas Partners
(NYSE:SGU)
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Rating:73Outperform
Price Target:
$13.50
▲(12.03% Upside)
The score is driven primarily by attractive valuation (low P/E and high dividend yield) and supportive technical momentum (trading above key moving averages with positive MACD). Financial performance is improving, but is tempered by historical balance-sheet weakness and recent cash flow softness. Earnings call tone was constructive on growth and EBITDA, with some cost and cash flow headwinds.
Positive Factors
Successful Acquisitions
Successful acquisitions have bolstered Star Gas Partners' market position, contributing positively to adjusted EBITDA and supporting long-term growth.
Improved Service and Installation Business
Enhancements in service and installation have increased gross profit, indicating effective operational improvements and potential for sustained profitability.
Increased Adjusted EBITDA
The rise in adjusted EBITDA reflects improved operational efficiency and successful integration of acquisitions, supporting financial stability.
Negative Factors
Negative Revenue Growth
Negative revenue growth highlights challenges in expanding sales, which could impact long-term financial performance if not addressed.
Increased Net Loss in Q3
The increased net loss in Q3 indicates financial strain, potentially affecting future profitability and necessitating cost management improvements.
Cash Flow Challenges
Negative cash flow growth suggests difficulties in generating cash, which could limit investment capacity and operational flexibility over time.
Star Gas Partners (SGU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$434.63M
Dividend Yield6.14%
Average Volume (3M)25.18K
Price to Earnings (P/E)7.1
Beta (1Y)0.34
Revenue Growth1.04%
EPS Growth111.69%
CountryUS
Employees3,039
SectorEnergy
Sector Strength52
IndustryOil & Gas Refining & Marketing
Share Statistics
EPS (TTM)0.89
Shares Outstanding32,976,517
10 Day Avg. Volume29,734
30 Day Avg. Volume25,185
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)1.30
Price to Sales (P/S)0.23
P/FCF Ratio7.24
Enterprise Value/Market Cap1.60
Enterprise Value/Revenue0.39
Enterprise Value/Gross Profit1.45
Enterprise Value/Ebitda4.73
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Star Gas Partners Business Overview & Revenue Model
Company DescriptionStar 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 MoneyStar 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 Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive operational and financial performance led by a 32% increase in adjusted EBITDA, 14% volume growth, and a $29 million increase in product gross profit. Those gains were partially offset by weather-driven costs, a $5 million derivative fair-value charge (a $10 million YoY swing), higher delivery and G&A expenses (+$11 million), and declines in service gross profit. Operational execution and acquisition contributions were cited as key drivers, while weather and related hedging and service costs were the main headwinds.Q1-2026 Updates
Positive Updates
Adjusted EBITDA Growth
Adjusted EBITDA increased by $16.5 million, or 32% year-over-year, to $68 million for the quarter, driven by improvements in the base business and contributions from recent acquisitions.
Net Income Increase
Net income rose by $3 million to $36 million despite noncash derivative headwinds, reflecting stronger operating performance.
Volume Growth
Home heating oil and propane volumes increased by 11.5 million gallons, or 14%, to approximately 94 million gallons, supported by colder weather and acquisitions.
Product Gross Profit Expansion
Product gross profit increased by $29 million, or 19%, to approximately $179 million (transcript references '179 million gallons' but context indicates gross profit growth of ~$179 million).
Acquisition Contribution and M&A Activity
Recent acquisitions contributed $4.8 million to adjusted EBITDA; company also completed a small heating oil business purchase shortly after quarter-end and has several acquisition opportunities in review.
Base Business Operational Improvements
Adjusted EBITDA in the base business rose by $16.8 million, reflecting operational execution, margin management, and service/installation profitability focus.
Strong Employee Response to Weather
Management highlighted strong operational execution and employee performance during unusually cold and stormy conditions, enabling fulfillment of increased demand and maintaining customer service levels.
Negative Updates
Service Gross Profit Deterioration
Combined service and installation gross profit decreased to $5.6 million from $6.9 million year-over-year; while installation gross profit rose by $1.4 million, service gross profit loss increased by $2.7 million due to high demand and related costs.
Weather Hedge and Derivative Impact
The company recorded a $5 million noncash charge from changes in the fair value of derivative instruments (vs. a $5 million credit in the prior-year quarter), representing a $10 million year-over-year swing and increasing reported expense.
Higher Operating and Delivery Costs
Delivery, branch and G&A expenses rose by $11 million; delivery expenses increased by $3.8 million, or 13%, largely driven by the 14% volume increase.
Weather-Related Cost Pressure
Colder-than-normal weather drove higher service demand and costs (temperatures ~19% colder YoY for the quarter and ~6% colder than normal), contributing to both increased operating expenses and weather hedge losses.
Increased Depreciation, Interest and Taxes
Higher depreciation & amortization and net interest expense related to acquisitions totaled $1.7 million, and income tax expense increased by $1.3 million, modestly reducing net income gains.
Modest Customer Attrition
Management noted net customer attrition was modest during the period, which offsets some of the volume gains from weather and acquisitions.
Nonrecurring/Timing Risk from M&A Activity
No significant acquisitions closed during the quarter (only a small purchase shortly after quarter-end); management noted a typical lull in M&A activity during peak heating season, indicating timing uncertainty for future acquisition-driven growth.
Company Guidance
Management’s guidance was essentially cautious and operational — stay vigilant on customer service, cost control and growing service & installation profitability, pursue acquisition opportunities into spring, and be prepared for continued cold weather — supported by Q1 metrics: volumes ~94 million gallons, up 11.5 million gallons (+14%); product gross profit +$29 million (+19%) to approximately $179 million; combined service & installation gross profit $5.6 million (vs $6.9 million prior), with installation profit +$1.4 million and service losses up $2.7 million; adjusted EBITDA +$16.5 million (+32%) to $68 million (base business +$16.8 million; acquisitions +$4.8 million); net income +$3 million to $36 million; a $5 million noncash derivative charge this quarter (vs $5 million credit prior year, a $10 million YoY swing); delivery/branch/G&A +$11 million (including $5 million from weather hedges and delivery expense +$3.8 million or +13%); other operating costs +$2.2 million (~+2%); higher D&A and net interest +$1.7 million; higher income tax expense +$1.3 million; and weather headwinds of ~19% colder than last year and 6% colder than normal for the quarter (January +2% vs last year and +9% vs normal).Star Gas Partners Financial Statement Overview
Summary
Profitability improved meaningfully in 2025 (higher net income and better margins), but the balance sheet remains mixed due to a history of negative equity and ongoing moderate leverage. Cash generation is positive with solid free cash flow, though operating cash flow and free cash flow declined versus 2024, reflecting some volatility.Income Statement
Annual results show a meaningful rebound in profitability in 2025, with net income rising to about $73.5M from ~$32.1M in 2024 and net margin improving to ~4.1% (from ~1.8%). Revenue has been volatile—down in 2023–2024, then up sharply in 2025 (+41.4%). Profitability is positive and improving recently, but margins remain relatively modest and prior-year performance was uneven.71
Positive
Balance Sheet
Leverage is moderate with debt-to-equity around ~0.9–1.1 in 2023–2025 and total debt roughly stable (~$244M–$285M). Equity has improved materially versus 2020–2022, when equity was negative (a key historical risk signal). Return on equity strengthened to ~23.5% in 2025 (from ~11.9% in 2024), but the balance sheet’s history of negative equity and ongoing reliance on debt keep the profile more mixed than strong.56
Neutral
Cash Flow
Cash generation is generally positive, with free cash flow remaining solid in 2025 (~$56.0M) and covering net income at ~0.79x. However, cash flow weakened in 2025 versus 2024 (operating cash flow ~$71.0M vs ~$111.0M; free cash flow down ~31%), indicating less cash conversion year over year. Overall, the business produces cash, but recent momentum has softened and cash flow has been somewhat variable across years.63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.78B | 1.78B | 1.77B | 1.95B | 2.01B | 1.50B |
| Gross Profit | 479.72M | 0.00 | 470.33M | 438.40M | 451.63M | 444.17M |
| EBITDA | 146.96M | 123.93M | 92.60M | 94.89M | 93.05M | 163.69M |
| Net Income | 52.80M | 73.50M | 32.10M | 29.34M | 35.29M | 87.74M |
Balance Sheet | ||||||
| Total Assets | 937.33M | 937.33M | 939.61M | 875.48M | 912.48M | 853.86M |
| Cash, Cash Equivalents and Short-Term Investments | 24.68M | 24.68M | 117.33M | 45.19M | 14.62M | 4.77M |
| Total Debt | 285.26M | 285.26M | 283.56M | 243.75M | 351.97M | 285.49M |
| Total Liabilities | 624.38M | 624.38M | 675.72M | 611.75M | 654.56M | 575.66M |
| Stockholders Equity | 312.95M | 312.95M | 269.61M | 268.34M | -15.61M | -14.04M |
Cash Flow | ||||||
| Free Cash Flow | 60.60M | 56.03M | 100.33M | 114.65M | 15.21M | 53.79M |
| Operating Cash Flow | 70.95M | 70.95M | 110.98M | 123.66M | 33.91M | 68.88M |
| Investing Cash Flow | -99.85M | -99.85M | -61.19M | -28.20M | -32.63M | -50.33M |
| Financing Cash Flow | -63.75M | -63.75M | 22.35M | -64.89M | 8.57M | -70.69M |
Star Gas Partners Technical Analysis
Positive
12.05
Price Trends
12.00
Positive
11.73
Positive
11.58
Positive
Market Momentum
0.29
Negative
80.79
Negative
66.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGU, the sentiment is Positive. The current price of 12.05 is below the 20-day moving average (MA) of 12.42, above the 50-day MA of 12.00, and above the 200-day MA of 11.58, indicating a bullish trend. The MACD of 0.29 indicates Negative momentum. The RSI at 80.79 is Negative, neither overbought nor oversold. The STOCH value of 66.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SGU.
Star Gas Partners Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $434.63M | 7.13 | 20.37% | 6.14% | 1.04% | 111.69% | |
71 Outperform | $8.84B | 19.66 | 8.27% | 6.88% | -5.18% | -33.14% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
51 Neutral | $1.53B | -3.55 | -23.84% | 3.30% | -15.32% | -442.37% | |
50 Neutral | $846.66M | 18.79 | ― | 10.09% | -10.27% | 131.17% | |
49 Neutral | $115.19M | -1.09 | ― | ― | -30.91% | 29.09% | |
43 Neutral | $519.74M | -2.52 | -31.94% | ― | 2.59% | -192.73% |
* Energy Sector Average
SGU
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Star Gas Partners Corporate Events
Dividends
Star Gas Partners Announces Quarterly Cash Distribution
Positive
Jan 15, 2026
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.
Dividends
Star Gas Partners Announces Quarterly Distribution
Positive
Oct 16, 2025
On October 16, 2025, Star Group, L.P. announced a quarterly distribution of $0.1850 per common unit for the fiscal fourth quarter ending September 30, 2025. The record date is set for October 27, 2025, with payment scheduled for November 5, 2025. This announcement reflects the company’s ongoing commitment to providing value to its stakeholders and maintaining its position as a leading energy distributor in the U.S.
The most recent analyst rating on (SGU) stock is a Hold 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.
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.