Gold prices edge higher on raised Fed rate cut hopes
On Tuesday, Raymond (NSE:RYMD) James analyst James Rollyson revised the price target for Natural Gas Services (NYSE:NGS) to $32.00 from the previous $33.00, while reaffirming a Strong Buy rating on the company’s stock. Currently trading at $21.83, NGS has shown impressive momentum with a 39.57% return over the past year. According to InvestingPro data, analyst targets range from $32 to $45, suggesting significant upside potential.
The adjustment was made following the company’s solid performance at the end of the year, propelled by its core contract compression rental business. With revenue growth of 41.72% in the last twelve months and an EBITDA of $66.27 million, NGS demonstrates strong operational execution. The 2025 guidance provided by NGS includes an updated growth capital expenditure (capex) forecast, which suggests some of the capex initially planned for the fourth quarter of 2024 has been deferred to 2025.
Despite the midpoint of the fiscal year 2025 EBITDA guidance being slightly below the Street’s expectations, by less than 2%, Rollyson attributes this to timing rather than operational issues. The company maintains strong financial health with a current ratio of 1.76 and manageable debt levels, as revealed by InvestingPro analysis. He notes that approximately 90,000 incremental horsepower (HP (NYSE:HPQ)) currently on order is expected to be fully operational by the first quarter of 2026, which should drive the anticipated growth.
Rollyson expressed some uncertainty regarding the recent drop in NGS’s stock price, suggesting that the market should have anticipated the timing shift and recognizing the current lower price as an appealing opportunity to invest. He believes that NGS is successfully executing its growth strategy while maintaining lower leverage compared to its peers.
Looking ahead, Rollyson anticipates that NGS will generate additional cash value in 2025 and 2026 through the collection of income tax receivables and the monetization of real estate assets, which are estimated to contribute over $1.50 per share in value. With a P/E ratio of 16.82 and expected earnings growth, InvestingPro analysis suggests the stock is currently undervalued. The reiteration of the Strong Buy rating reflects confidence in the company’s prospects, notwithstanding the minor adjustment to the 2025 forecast and excluding any potential benefits from the aforementioned cash collections. Investors can access the comprehensive Pro Research Report for NGS, along with detailed analysis of 1,400+ other US stocks, through InvestingPro’s premium service.
In other recent news, Natural Gas Services Group Inc . reported its financial results for the fourth quarter of 2024, showcasing a mixed performance. The company missed earnings per share (EPS) expectations, posting an EPS of $0.23 compared to the forecasted $0.26. However, revenue exceeded projections, reaching $40.66 million against the anticipated $39.62 million. Notably, the company experienced a 12% year-over-year increase in Q4 revenue and a significant 68% rise in net income compared to the previous year. Rental revenue surged by 212% year-on-year, reflecting strong demand in this segment. The company also announced a strategic shift toward electric drive units, with most 2026 orders being electric. Analyst firms have not yet adjusted their ratings on the stock following these announcements. Investors continue to monitor Natural Gas Services Group’s operational strategies and market positioning amidst these developments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.