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Summit Midstream (SMC)
NYSE:SMC
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Summit Midstream
(NYSE:SMC)
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Rating:47Neutral
Price Target:
$25.00
▼(-5.45% Downside)
Overall score is constrained primarily by weak profitability and high leverage despite improving revenue and free cash flow trends. Technicals are neutral (no strong momentum), and valuation is not supportive given the negative P/E and no dividend yield data.
Positive Factors
Long-term Contracts
The extension of gathering agreements increases contract life, providing stable revenue and enhancing long-term cash flow predictability.
Revenue Growth
Consistent revenue growth indicates expanding operations and demand for services, supporting long-term business sustainability.
Cash Flow Generation
Improved cash generation capabilities enhance financial flexibility, enabling investment in growth opportunities and debt reduction.
Negative Factors
High Leverage
Significant leverage poses financial risk, potentially limiting the company's ability to invest in growth or weather economic downturns.
Profitability Challenges
Ongoing profitability issues highlight the need for cost control and efficiency improvements to achieve sustainable financial health.
Deferred Customer Development
Deferrals in development can impact future revenue streams and delay expected growth, affecting long-term business planning.
Summit Midstream (SMC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$539.36M
Dividend YieldN/A
Average Volume (3M)68.17K
Price to Earnings (P/E)―
Beta (1Y)0.74
Revenue Growth17.09%
EPS Growth72.64%
CountryUS
Employees272
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)-0.13
Shares Outstanding12,261,954
10 Day Avg. Volume79,063
30 Day Avg. Volume68,165
Financial Highlights & Ratios
PEG Ratio-0.03
Price to Book (P/B)0.86
Price to Sales (P/S)0.93
P/FCF Ratio49.08
Enterprise Value/Market Cap2.61
Enterprise Value/Revenue2.67
Enterprise Value/Gross Profit6.89
Enterprise Value/Ebitda7.40
Forecast
1Y Price Target
$47.00Price Target Upside77.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)8
Revenue Forecast (FY)N/A
Summit Midstream Business Overview & Revenue Model
Company DescriptionSummit Midstream Corporation focuses on owning, developing, and operating midstream energy infrastructure assets primarily shale formations in the continental United States. It operates natural gas, crude oil, and produced water gathering systems in four unconventional resource basins, including the Williston Basin in North Dakota, which includes the Bakken and Three Forks shale formations; the Denver-Julesburg Basin that consists of the Niobrara and Codell shale formations in Colorado and Wyoming; the Fort Worth Basin in Texas, which comprises the Barnett Shale formation; and the Piceance Basin in Colorado, which includes the Mesaverde formation, as well as the emerging Mancos and Niobrara Shale formations. It serves natural gas and crude oil producers. Summit Midstream Corporation was founded in 2012 and is based in Houston, Texas.
How the Company Makes MoneySummit Midstream generates revenue through a combination of fee-based contracts and service agreements with natural gas producers. The primary revenue streams include gathering and processing fees charged for the transportation and processing of natural gas, as well as long-term contracts that provide stable cash flows. Additionally, SMC benefits from strategic partnerships with various exploration and production companies, which enhance its service offerings and market presence. The company may also engage in asset optimization initiatives, such as expanding its infrastructure to meet growing demand, further contributing to its earnings.
Summit Midstream Earnings Call Summary
Earnings Call Date:Aug 12, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Mar 18, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment. While there were notable achievements such as the extension of gathering agreements and inclusion in major indices, there were significant challenges like the below-expectation adjusted EBITDA and deferred development by customers. The financial outlook remains cautiously optimistic despite current setbacks.Q2-2025 Updates
Positive Updates
10-Year Extension of Gathering Agreements
Summit executed a new 10-year extension of certain gathering agreements with a key customer in the Williston, increasing the weighted average contract life from 4 to 8 years.
Addition to Russell Indices
Summit was added to the Russell 3000, Russell 2000, and Russell Microcap indices, enhancing visibility among institutional investors and broadening the shareholder base.
New 10-Year Precedent Agreement in Permian
A new 10-year precedent agreement for 100 million a day of firm capacity on Double E was signed, contingent on the customer's final investment decision to build a new plant.
Volume Growth in Rockies Segment
The Rockies segment saw a 5.4% increase in liquids volume throughput and a 14% increase in natural gas volume throughput following the Moonrise Midstream business acquisition.
Incremental Development in Arkoma
An anchor customer is preparing a 20-well development program in the Arkoma, expected to begin in the fourth quarter and continue through mid-2026.
Negative Updates
Adjusted EBITDA Below Expectations
Second-quarter adjusted EBITDA was $61 million, below expectations due to underperformance of some wells in the DJ, delays in well completions, and lower realized commodity prices.
Deferral of Development by Customers
Some customers deferred development due to a drop in crude prices earlier this year, impacting the year's financial outlook.
Higher Operating and G&A Expenses in Rockies
Operating and general and administrative expenses increased by approximately $4.5 million in the Rockies segment, partly due to the Moonrise Midstream acquisition and onetime costs.
Decrease in Piceance Segment EBITDA
The Piceance segment recorded a decrease in adjusted EBITDA of $1.3 million relative to the first quarter, primarily due to higher operating expenses and a 1.1% decrease in volume throughput.
Company Guidance
In the second quarter of 2025, Summit Midstream Corporation reported an adjusted EBITDA of $61 million, which was slightly below expectations due to underperformance in certain wells and lower commodity prices. Capital expenditures totaled $26.4 million, including $5.5 million for maintenance. Despite challenges, the company executed a 10-year extension of gathering agreements in the Williston, improving contract life from 4 to 8 years. Summit's Rockies segment generated $25.2 million in adjusted EBITDA, with volume increases offset by lower commodity prices and increased expenses. The Permian Basin segment saw a slight EBITDA increase to $8.3 million due to higher throughput. The Piceance segment's EBITDA decreased to $10.5 million, while the Mid-Con segment increased to $24.9 million, driven by increased throughput and new well connections. The company remains optimistic about future volume recovery and development opportunities in 2026, particularly with a significant program in the Arkoma and new agreements in the Permian.Summit Midstream Financial Statement Overview
Summary
Mixed fundamentals: revenue is growing (TTM +9.22%) and free cash flow growth is strong (TTM +53.63%), but profitability remains weak with a negative net margin (-4.52%) and the balance sheet is highly leveraged (debt-to-equity 1.56, negative ROE -2.62%).Income Statement
Summit Midstream's income statement shows a mixed performance. The TTM data indicates a gross profit margin of 25.52%, which is a slight decrease from previous years, suggesting some pressure on cost management. The net profit margin remains negative at -4.52%, indicating ongoing profitability challenges. However, there is a positive revenue growth rate of 9.22% in the TTM, showing some recovery in sales. The EBIT and EBITDA margins are relatively stable, but the negative net income highlights the need for improved cost control and revenue enhancement.45
Neutral
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio of 1.56 in the TTM, indicating significant leverage and potential financial risk. The return on equity is negative at -2.62%, pointing to inefficiencies in generating returns for shareholders. The equity ratio stands at 22.86%, suggesting a moderate level of equity financing. Overall, the balance sheet shows a need for better capital management and reduction of debt levels to improve financial stability.40
Negative
Cash Flow
Cash flow analysis reveals a strong free cash flow growth rate of 53.63% in the TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.53, suggesting that operating activities are generating sufficient cash relative to net income. However, the free cash flow to net income ratio is relatively low at 0.12, indicating that a significant portion of cash is being reinvested or used for debt servicing. Overall, cash flow management shows positive trends but requires careful monitoring to sustain growth.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 526.82M | 429.62M | 458.90M | 369.59M | 401.56M | 383.47M |
| Gross Profit | 204.02M | 113.01M | 122.94M | 89.56M | 245.41M | 142.66M |
| EBITDA | 189.97M | 250.53M | 225.86M | 81.17M | 187.22M | 375.63M |
| Net Income | -14.85M | -113.17M | -38.95M | -123.46M | -19.95M | 192.35M |
Balance Sheet | ||||||
| Total Assets | 2.41B | 2.36B | 2.49B | 2.56B | 2.52B | 2.50B |
| Cash, Cash Equivalents and Short-Term Investments | 28.45M | 22.82M | 14.04M | 11.81M | 7.35M | 15.54M |
| Total Debt | 1.08B | 993.58M | 1.48B | 1.50B | 1.36B | 1.35B |
| Total Liabilities | 1.32B | 1.39B | 1.65B | 1.68B | 1.51B | 1.49B |
| Stockholders Equity | 690.97M | 467.79M | 718.56M | 764.82M | 904.36M | 1.01B |
Cash Flow | ||||||
| Free Cash Flow | 15.91M | 8.16M | 58.00M | 68.27M | 140.07M | 155.46M |
| Operating Cash Flow | 101.57M | 61.77M | 126.91M | 98.74M | 165.10M | 198.59M |
| Investing Cash Flow | -316.08M | 487.06M | -74.76M | -226.56M | -165.73M | -140.57M |
| Financing Cash Flow | 98.59M | -540.28M | -49.04M | 121.77M | 4.66M | -79.40M |
Summit Midstream Technical Analysis
Positive
26.44
Price Trends
26.50
Positive
24.25
Positive
24.80
Positive
Market Momentum
0.60
Negative
64.81
Neutral
70.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMC, the sentiment is Positive. The current price of 26.44 is below the 20-day moving average (MA) of 27.12, below the 50-day MA of 26.50, and above the 200-day MA of 24.80, indicating a bullish trend. The MACD of 0.60 indicates Negative momentum. The RSI at 64.81 is Neutral, neither overbought nor oversold. The STOCH value of 70.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SMC.
Summit Midstream Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $2.66B | 16.09 | ― | 9.78% | -1.78% | 9.32% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
64 Neutral | $1.46B | ― | 12.40% | ― | -38.82% | 92.56% | |
49 Neutral | $2.03B | -12.92 | -11.88% | 4.14% | -36.47% | -75.37% | |
47 Neutral | $539.36M | -8.59 | -1.23% | ― | 17.09% | 72.64% | |
47 Neutral | $109.35M | -5.37 | ― | 0.77% | -0.58% | -587.83% |
* Energy Sector Average
SMC
Summit Midstream
28.71
-12.56
-30.43%
GEL
Genesis Energy
16.61
6.52
64.62%
MMLP
Martin Midstream
2.80
-0.77
-21.57%
NGL
NGL Energy Partners
11.75
6.34
117.19%
DKL
Delek Logistics
49.69
10.18
25.77%
PBT
Permian Basin
18.25
7.49
69.56%
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.