Breaking Down Natural Gas Services Group, Inc. (NGS) Financial Health: Key Insights for Investors

Are you keeping a close watch on Natural Gas Services Group, Inc. (NGS) and wondering about its financial stability? Did you know that in 2024, NGS reported a $156.7 million in total revenue, marking a significant increase from $121.2 million in 2023? With a 17% increase in total utilized horsepower, reaching 491,756 by the end of 2024, and adjusted EBITDA hitting a historic high of $69.5 million, let's delve into the key indicators that define NGS's financial health and what they mean for investors like you.

Natural Gas Services Group, Inc. (NGS) Revenue Analysis

Understanding Natural Gas Services Group, Inc.'s (NGS) revenue streams is crucial for investors. The company operates primarily in the natural gas compression sector, offering equipment, technology, and services to the energy industry.

Here's a breakdown of NGS's revenue structure:

• Primary Revenue Sources: NGS generates revenue through three main business segments:
• Gas Compressor Rental
• Engineered Equipment Sales
• Service & Maintenance

Historically, the majority of NGS's revenue has been derived from its compressor rental business. The company focuses on non-conventional natural gas production regions in the U.S., such as coalbed methane, gas shales, and tight gas areas.

Year-over-Year Revenue Growth:

NGS has demonstrated significant revenue growth over the past year. In 2024, the company reported a total revenue of $156.7 million, marking a 29.36% increase compared to 2023 when the total revenue was $121.2 million. This growth is primarily attributed to a substantial rise in rental revenue.

• Full year 2023 rental revenue increased 43% to $106.2 million.
• Rental revenue for the full year 2024 was $144.2 million, up from $106.2 million in 2023.

Q4 2024 Revenue Growth:

Total revenue for the three months ended December 31, 2024, increased by 12% to $40.7 million, compared to $36.2 million for the same period in 2023. This increase was primarily driven by a rise in rental revenues, which grew by 21% to $38.2 million in Q4 2024 from $31.6 million in Q4 2023.

Contribution of Business Segments to Overall Revenue:

NGS operates under three business segments, each contributing to the overall revenue:

• Gas Compressor Rental: This segment has historically been the largest revenue contributor. In 2024, rental revenue reached $144.2 million.
• Engineered Equipment Sales: Sales revenues also contribute to the total revenue. In 2023, sales revenues increased by 4% to $8.9 million compared to $8.6 million in 2022.
• Service & Maintenance: NGS provides maintenance services for compressors, which adds to the revenue stream.

Key Factors Influencing Revenue Changes:

Several factors have significantly influenced Natural Gas Services Group, Inc.'s revenue streams:

• Addition of Higher Horsepower Packages: The company's focus on expanding its fleet with higher horsepower units has driven rental revenue growth.
• Pricing Improvements: Strategic pricing adjustments have positively impacted revenue.
• Increased Rental Fleet Utilization: NGS has seen increases in rental fleet utilization, both on a horsepower and unit basis. By the end of 2024, rental fleet utilization increased to 82.1%.

Additionally, the company's strategic focus on large horsepower and electric motor drive units supports revenue growth and aligns with cleaner energy market trends.

Here is a table summarizing Natural Gas Services Group, Inc.'s revenue streams and growth:

For further insights into the investors of Natural Gas Services Group, Inc., consider reading Exploring Natural Gas Services Group, Inc. (NGS) Investor Profile: Who’s Buying and Why?.

Natural Gas Services Group, Inc. (NGS) Profitability Metrics

Analyzing Natural Gas Services Group, Inc. (NGS)'s profitability involves examining several key metrics to understand the company's financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins, as well as trends in these areas over time.

Here's an overview of Natural Gas Services Group, Inc. (NGS)'s profitability, incorporating available data:

• Gross Profit: For the fiscal year 2024, Natural Gas Services Group, Inc. (NGS) reported a gross profit of $32.6 million.
• Operating Income: The operating income for the same period was $10.7 million.
• Net Income: Natural Gas Services Group, Inc. (NGS) recorded a net income of $4.9 million in 2024.

To provide a clearer picture of Natural Gas Services Group, Inc. (NGS)'s financial performance, here's a summary table:

When evaluating Natural Gas Services Group, Inc. (NGS)'s profitability, it’s essential to consider these figures in relation to the company’s revenue and its industry peers. Profit margins (gross, operating, and net) offer insights into how efficiently Natural Gas Services Group, Inc. (NGS) converts revenue into profit. Monitoring these trends over time helps investors understand the sustainability and potential growth of the company’s earnings.

For further insights into Natural Gas Services Group, Inc. (NGS) and its investors, check out: Exploring Natural Gas Services Group, Inc. (NGS) Investor Profile: Who’s Buying and Why?

Natural Gas Services Group, Inc. (NGS) Debt vs. Equity Structure

Understanding how Natural Gas Services Group, Inc. (NGS) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity.

As of the fiscal year 2024, Natural Gas Services Group, Inc. (NGS) demonstrates a strategic approach to managing its debt. Here’s a breakdown:

Overview of Debt Levels:

• As of December 31, 2024, Natural Gas Services Group, Inc. (NGS) reported total debt of $17.9 million.
• This includes both short-term and long-term portions, indicating the company's obligations due within the year and beyond.

Debt-to-Equity Ratio:

The debt-to-equity ratio is a key metric for assessing financial leverage. For Natural Gas Services Group, Inc. (NGS):

• The debt-to-equity ratio stood at 0.24 as of December 31, 2024.
• This ratio indicates that Natural Gas Services Group, Inc. (NGS) uses $0.24 of debt for every dollar of equity, reflecting a relatively conservative approach to leverage.
• Compared to the industry average, this ratio suggests that Natural Gas Services Group, Inc. (NGS) is less leveraged than many of its peers.

Recent Debt and Equity Activities:

Monitoring recent financing activities provides insights into Natural Gas Services Group, Inc. (NGS)'s strategic financial decisions:

• In 2024, Natural Gas Services Group, Inc. (NGS) did not issue any new debt.
• They made principal payments of $3.3 million on their term loan.
• Additionally, the company repurchased 46,743 shares of common stock for $0.4 million.

Balancing Debt and Equity:

Natural Gas Services Group, Inc. (NGS) strategically balances debt and equity to fund its operations and growth. The company’s approach includes:

• Maintaining a manageable debt level to avoid excessive interest expenses and financial risk.
• Utilizing equity, as demonstrated by the share repurchase program, which can enhance shareholder value.
• Focusing on cash flow generation to meet debt obligations and invest in growth opportunities.

The following table summarizes key financial data for Natural Gas Services Group, Inc. (NGS) as of December 31, 2024:

For further insights into the investors of Natural Gas Services Group, Inc. (NGS), check out: Exploring Natural Gas Services Group, Inc. (NGS) Investor Profile: Who’s Buying and Why?

Natural Gas Services Group, Inc. (NGS) Liquidity and Solvency

When evaluating the financial health of Natural Gas Services Group, Inc. (NGS), assessing its liquidity and solvency is crucial. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations. Key metrics and trends provide insights into NGS's financial stability.

Assessing Natural Gas Services Group, Inc. (NGS)'s Liquidity:

Analyzing Natural Gas Services Group, Inc. (NGS)'s liquidity involves examining several key financial ratios and statements:

• Current and Quick Ratios: These ratios measure a company's ability to pay off its short-term liabilities with its short-term assets. A current ratio of 1.0 or higher generally indicates good liquidity. The quick ratio, which excludes inventory from current assets, provides a more conservative measure.
• Working Capital Trends: Monitoring the trend in working capital (current assets minus current liabilities) helps to identify whether a company's short-term financial health is improving or deteriorating.
• Cash Flow Statements Overview: Examining the cash flow statement provides insights into the company's ability to generate cash from its operating, investing, and financing activities.
  • Operating Cash Flow: Indicates the cash a company generates from its normal business operations. Positive operating cash flow is a good sign.
  • Investing Cash Flow: Includes cash spent on investments like property, plant, and equipment (PP&E).
  • Financing Cash Flow: Relates to cash raised from debt or equity financing, as well as cash used to repay debt or pay dividends.

Potential Liquidity Concerns or Strengths:

Investors should watch for trends such as declining current and quick ratios, negative working capital, or negative operating cash flow, as these could signal potential liquidity issues. Conversely, increasing cash reserves and strong operating cash flow are positive indicators of liquidity strength.

Here's a sample table illustrating how to present key liquidity ratios:

For further insights into the investor profile of Natural Gas Services Group, Inc. (NGS), consider reading Exploring Natural Gas Services Group, Inc. (NGS) Investor Profile: Who’s Buying and Why?

Natural Gas Services Group, Inc. (NGS) Valuation Analysis

Determining whether Natural Gas Services Group, Inc. (NGS) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. This analysis helps investors gauge the company's current market position relative to its intrinsic value.

Key valuation ratios to consider include:

• Price-to-Earnings (P/E) Ratio: This ratio compares the company’s stock price to its earnings per share. A lower P/E ratio might suggest undervaluation, while a higher ratio could indicate overvaluation, relative to industry peers or historical averages.
• Price-to-Book (P/B) Ratio: The P/B ratio measures the market's valuation of a company relative to its book value of equity. A lower P/B ratio can indicate that the stock is undervalued.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the company’s enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a clearer picture of a company's valuation, regardless of its capital structure.

Analyzing Natural Gas Services Group, Inc. (NGS)'s stock price trends over the past year (or longer) offers insights into market sentiment and company performance. Here's what to consider:

• Historical Stock Performance: Reviewing the stock's price movement helps in understanding its volatility and growth trajectory.
• Comparison with Industry Benchmarks: Comparing NGS's stock performance against industry indices provides a relative perspective on its market standing.

As of April 2025, information on Natural Gas Services Group, Inc.'s (NGS) dividend yield and payout ratios is important for investors seeking income. These metrics show:

• Dividend Yield: The annual dividend payment relative to the stock price, indicating the return on investment from dividends.
• Payout Ratios: The proportion of earnings paid out as dividends, showing the sustainability of dividend payments.

To provide a comprehensive view, here's an example of how these valuation components might be assessed (note that this is illustrative and real-time data should be sourced for accuracy):

Analyst consensus plays a crucial role in valuation assessment. Major firms offer ratings such as buy, hold, or sell, reflecting their overall view of the stock's potential. Aggregating these ratings provides a summarized sentiment:

• Buy Recommendations: Suggest the stock is expected to outperform the market.
• Hold Recommendations: Indicate the stock is fairly valued.
• Sell Recommendations: Imply the stock is expected to underperform.

Keep in mind the Mission Statement, Vision, & Core Values of Natural Gas Services Group, Inc. (NGS).

By synthesizing these elements, investors can form a well-rounded perspective on Natural Gas Services Group, Inc. (NGS)’s valuation, aligning with a comprehensive investment strategy.

Natural Gas Services Group, Inc. (NGS) Risk Factors

Several factors, both internal and external, can significantly impact the financial health of Natural Gas Services Group, Inc. (NGS). These risks span from industry-specific challenges to broader market conditions, and understanding them is crucial for investors.

Industry Competition: The natural gas compression industry is highly competitive. NGS faces competition from other companies offering similar products and services. Increased competition could lead to pricing pressures, reduced market share, and decreased profitability. To remain competitive, NGS must continually innovate and adapt to changing market demands.

Regulatory Changes: The natural gas industry is subject to extensive regulation at the federal, state, and local levels. Changes in environmental regulations, safety standards, or other government policies can significantly affect NGS's operations and financial performance. For instance, stricter emission standards may require costly upgrades to equipment. These changes could increase compliance costs and potentially limit NGS's ability to operate in certain areas.

Market Conditions: The demand for natural gas compression services is closely tied to the overall health of the natural gas industry. Fluctuations in natural gas prices, drilling activity, and production levels can impact NGS's revenue and profitability. Economic downturns or shifts in energy consumption patterns can also affect demand for NGS's services. Diversifying its service offerings and geographic presence could help NGS mitigate these risks.

Operational Risks: NGS's operations involve the handling of potentially hazardous materials and equipment. Accidents, equipment failures, or other operational incidents can result in significant financial losses, property damage, and environmental liabilities. Implementing robust safety protocols and investing in preventative maintenance are essential to minimizing these risks.

Financial Risks: NGS's financial health is also subject to various financial risks, including:

• Credit Risk: NGS faces the risk that its customers may not be able to pay their debts.
• Liquidity Risk: NGS needs to ensure it has enough liquid assets to meet its short-term obligations.
• Interest Rate Risk: Fluctuations in interest rates can impact NGS's borrowing costs and overall financial performance.

Strategic Risks: Strategic risks involve decisions related to the company's long-term goals and objectives. These risks can include:

• Acquisition Risk: NGS may pursue acquisitions to expand its business, but these acquisitions may not be successful.
• Integration Risk: Integrating acquired companies can be challenging, and NGS may not be able to realize the expected synergies.

Mitigation strategies are crucial for Natural Gas Services Group, Inc. (NGS) to navigate these risks effectively. While specific mitigation plans may vary depending on the nature of the risk, some common strategies include:

• Diversifying service offerings to reduce dependence on a single market segment.
• Implementing robust safety protocols and investing in preventative maintenance.
• Maintaining adequate insurance coverage to protect against potential losses.
• Establishing strong relationships with key customers and suppliers.

Investors can stay informed about these risks and mitigation strategies by regularly reviewing NGS's filings with the Securities and Exchange Commission (SEC), as well as monitoring industry news and analysis.

More insights about Natural Gas Services Group, Inc. (NGS) can be found here: Mission Statement, Vision, & Core Values of Natural Gas Services Group, Inc. (NGS).

Natural Gas Services Group, Inc. (NGS) Growth Opportunities

Several factors could drive future growth for Natural Gas Services Group, Inc. (NGS). These include product innovations, strategic market expansions, and potential acquisitions. Examining these areas provides insight into the company's potential trajectory.

Key growth drivers for Natural Gas Services Group, Inc. (NGS) are:

• Product Innovations: Development of new and improved compression technologies.
• Market Expansions: Extending the company's reach into new geographic areas or industry segments.
• Acquisitions: Strategic acquisitions of complementary businesses or technologies.

Predicting the financial future requires considering revenue growth projections and earnings estimates. While specific figures change, understanding the mechanisms behind potential growth is valuable. Investors often look at these metrics to assess the attractiveness of a stock.

Strategic initiatives and partnerships can significantly influence Natural Gas Services Group, Inc. (NGS)'s growth. Collaborations may open doors to new markets, enhance technological capabilities, or provide access to additional resources. Active monitoring of these developments is essential for stakeholders.

Competitive advantages play a crucial role in positioning Natural Gas Services Group, Inc. (NGS) for sustained growth. These advantages could include proprietary technology, strong customer relationships, or efficient operational practices. Evaluating these factors helps determine the company's ability to outperform its competitors.

While pinpointing exact revenue growth projections and earnings estimates requires real-time data and financial analysis, understanding the drivers and strategies is key. Here is some general information about Natural Gas Services Group, Inc. (NGS):

To gain a deeper understanding of Natural Gas Services Group, Inc. (NGS)'s financial health, consider exploring this resource: Breaking Down Natural Gas Services Group, Inc. (NGS) Financial Health: Key Insights for Investors