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Tuesday, Natural Gas Services Group (NYSE:NGS) received a reaffirmed Buy rating from Stifel analysts, alongside a steady price target of $32.00. According to InvestingPro data, the company maintains a healthy financial position with a "GOOD" overall score and strong liquidity metrics. The endorsement follows the company’s fourth-quarter financial performance, which surpassed both Stifel’s and the consensus estimates for Adjusted EBITDA.
On Tuesday, the firm reported its fourth-quarter results for the fiscal year 2024. Natural Gas Services Group announced an Adjusted EBITDA of $18.0 million, which exceeded Stifel’s projection of $17.5 million and the consensus estimate of $16.7 million. The company has shown impressive momentum, with InvestingPro data showing a 41.7% revenue growth over the last twelve months and a notable 8.5% return just last week.
The financial figures represented by the Adjusted EBITDA are considered a key indicator of the company’s operational profitability. The results suggest that Natural Gas Services Group has managed to outperform expectations regarding its earnings before interest, taxes, depreciation, and amortization, once adjusted for non-recurring items. The company maintains a healthy gross profit margin of 56% and is expected to grow its net income this year, according to InvestingPro analysis, which offers 7 additional key insights about the company’s performance and prospects.
Stifel’s reiteration of the Buy rating indicates their continued confidence in the stock’s potential. The $32.00 price target suggests that the analysts see room for significant appreciation from the stock’s closing price on Monday, which stood at $23.63.
Investors and market watchers often look to analyst ratings and price targets as indicators of a stock’s future performance, although such projections are not guarantees. The latest report from Stifel could potentially influence investor sentiment and the stock’s performance in the market.
In other recent news, Natural Gas Services Group reported mixed fourth quarter results, with revenue surpassing expectations while earnings fell short. The company announced adjusted earnings per share of $0.23, missing the analyst estimates of $0.26. However, revenue exceeded forecasts, reaching $40.66 million compared to the anticipated $39.62 million. Rental revenue, a significant part of the company’s business, grew by 21% year-over-year to $38.2 million, and total utilized horsepower increased 17% from the previous year. For the full year 2024, the company reported a net income of $17.2 million, marking a 263% increase from 2023, and adjusted EBITDA rose by 52% to a record $69.5 million. Looking forward, Natural Gas Services Group expects 2025 adjusted EBITDA to range between $74 million and $78 million. Growth capital expenditures for 2025 are projected to be between $95 million and $120 million. Despite the earnings miss, the company remains optimistic about future growth, with expectations for rented horsepower to rise by approximately 18% by early 2026.
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