NATURAL GAS SERVICES GROUP (NGS) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NGS - US63886Q1094 - Common Stock
35.23 USD
+0.51 (+1.47%)
NGS gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 61 industry peers in the Energy Equipment & Services industry. NGS has an excellent profitability rating, but there are concerns on its financial health. NGS is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year NGS was profitable.
- NGS had a positive operating cash flow in the past year.
- In multiple years NGS reported negative net income over the last 5 years.
- NGS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- NGS has a Return On Assets (3.32%) which is comparable to the rest of the industry.
- NGS has a Return On Equity of 6.89%. This is in the better half of the industry: NGS outperforms 60.66% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 5.51%, NGS is in line with its industry, outperforming 54.10% of the companies in the same industry.
- NGS had an Average Return On Invested Capital over the past 3 years of 2.84%. This is significantly below the industry average of 12.90%.
- The last Return On Invested Capital (5.51%) for NGS is above the 3 year average (2.84%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.32% | ||
| ROE | 6.89% | ||
| ROIC | 5.51% |
ROA(3y)1.44%
ROA(5y)0.37%
ROE(3y)2.84%
ROE(5y)1.07%
ROIC(3y)2.84%
ROIC(5y)N/A
1.3 Margins
- The Profit Margin of NGS (11.20%) is better than 90.16% of its industry peers.
- The Operating Margin of NGS (23.35%) is better than 90.16% of its industry peers.
- In the last couple of years the Operating Margin of NGS has grown nicely.
- The Gross Margin of NGS (58.32%) is better than 93.44% of its industry peers.
- In the last couple of years the Gross Margin of NGS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.35% | ||
| PM (TTM) | 11.2% | ||
| GM | 58.32% |
OM growth 3YN/A
OM growth 5Y156.69%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y14.53%
GM growth 5Y5.23%
2. Health
2.1 Basic Checks
- NGS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- NGS has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for NGS has been reduced compared to 5 years ago.
- The debt/assets ratio for NGS has remained at the same level compared to a year ago.
2.2 Solvency
- An Altman-Z score of 1.89 indicates that NGS is not a great score, but indicates only limited risk for bankruptcy at the moment.
- NGS's Altman-Z score of 1.89 is in line compared to the rest of the industry. NGS outperforms 44.26% of its industry peers.
- NGS has a Debt/Equity ratio of 0.77. This is a neutral value indicating NGS is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.77, NGS is doing worse than 70.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.89 |
ROIC/WACC0.58
WACC9.47%
2.3 Liquidity
- A Current Ratio of 1.83 indicates that NGS should not have too much problems paying its short term obligations.
- The Current ratio of NGS (1.83) is comparable to the rest of the industry.
- A Quick Ratio of 1.06 indicates that NGS should not have too much problems paying its short term obligations.
- NGS has a worse Quick ratio (1.06) than 67.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.83 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
- NGS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.95%, which is quite good.
- Measured over the past years, NGS shows a very strong growth in Earnings Per Share. The EPS has been growing by 87.22% on average per year.
- The Revenue has grown by 9.53% in the past year. This is quite good.
- NGS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.85% yearly.
EPS 1Y (TTM)13.95%
EPS 3YN/A
EPS 5Y87.22%
EPS Q2Q%12.5%
Revenue 1Y (TTM)9.53%
Revenue growth 3Y29.35%
Revenue growth 5Y14.85%
Sales Q2Q%6.67%
3.2 Future
- Based on estimates for the next years, NGS will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.84% on average per year.
- The Revenue is expected to grow by 8.06% on average over the next years. This is quite good.
EPS Next Y18.81%
EPS Next 2Y19.26%
EPS Next 3Y15.59%
EPS Next 5Y15.84%
Revenue Next Year8.61%
Revenue Next 2Y11.51%
Revenue Next 3Y10.36%
Revenue Next 5Y8.06%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 23.97, the valuation of NGS can be described as rather expensive.
- NGS's Price/Earnings ratio is a bit cheaper when compared to the industry. NGS is cheaper than 63.93% of the companies in the same industry.
- NGS's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.25.
- With a Price/Forward Earnings ratio of 17.95, NGS is valued on the expensive side.
- 62.30% of the companies in the same industry are more expensive than NGS, based on the Price/Forward Earnings ratio.
- NGS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.97 | ||
| Fwd PE | 17.95 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NGS indicates a slightly more expensive valuation: NGS is more expensive than 60.66% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 8.68 |
4.3 Compensation for Growth
- NGS's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- NGS has a very decent profitability rating, which may justify a higher PE ratio.
- NGS's earnings are expected to grow with 15.59% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.27
PEG (5Y)0.27
EPS Next 2Y19.26%
EPS Next 3Y15.59%
5. Dividend
5.1 Amount
- NGS has a Yearly Dividend Yield of 1.27%. Purely for dividend investing, there may be better candidates out there.
- NGS's Dividend Yield is a higher than the industry average which is at 1.14.
- NGS's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.27% |
5.2 History
- NGS is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DPN/A
EPS Next 2Y19.26%
EPS Next 3Y15.59%
NATURAL GAS SERVICES GROUP / NGS FAQ
Can you provide the ChartMill fundamental rating for NATURAL GAS SERVICES GROUP?
ChartMill assigns a fundamental rating of 5 / 10 to NGS.
What is the valuation status of NATURAL GAS SERVICES GROUP (NGS) stock?
ChartMill assigns a valuation rating of 4 / 10 to NATURAL GAS SERVICES GROUP (NGS). This can be considered as Fairly Valued.
How profitable is NATURAL GAS SERVICES GROUP (NGS) stock?
NATURAL GAS SERVICES GROUP (NGS) has a profitability rating of 7 / 10.
What is the valuation of NATURAL GAS SERVICES GROUP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for NATURAL GAS SERVICES GROUP (NGS) is 23.97 and the Price/Book (PB) ratio is 1.63.