US LNG exports surge but will buyers in China turn up?
On Friday, Stifel analysts increased the price target for Natural Gas Services (NYSE:NGS) shares to $33.00 from $32.00, while reaffirming a Buy rating on the stock. Currently trading at $24.83, NGS has seen a remarkable 22.58% gain in the past week. The adjustment follows the company’s first-quarter 2025 earnings, which slightly exceeded Stifel’s forecasts, with diluted EPS reaching $1.34. The firm also noted that Natural Gas Services has improved its 2025 guidance. According to InvestingPro data, analyst targets for NGS range from $32 to $45, suggesting significant upside potential.
Natural Gas Services has reportedly secured its compression demand for 2025, with plans for 2026 already underway. The company’s management anticipates stable pricing and expects to remain largely unaffected by tariffs. Supporting this outlook, NGS has demonstrated strong revenue growth of 22.64% over the last twelve months. In addition, there is ongoing progress in converting non-cash assets into cash, with the expectation of recovering $11 million in income tax receivables within the next 12 months. The company maintains a healthy current ratio of 2.1, indicating strong liquidity.
Stifel’s analysts highlighted Natural Gas Services’ favorable position for continued growth and potential mergers and acquisitions, citing the company’s successful asset monetization, a new credit agreement, and low leverage. InvestingPro analysis reveals the company’s strong financial health with an overall score of 3.02 (GREAT), supported by a conservative debt-to-equity ratio of 0.65. They also pointed out that as the demand for natural gas rises, there may be opportunities for Natural Gas Services to redeploy small and medium horsepower units.
The report maintains a positive outlook on Natural Gas Services’ ability to execute growth strategies, bolstered by the company’s financial strategies and the broader demand trends in the natural gas sector. With a favorable PEG ratio of 0.24, the stock appears attractively valued relative to its growth prospects. The new price target of $33 reflects this optimism. For deeper insights and additional analysis, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Natural Gas Services Group reported its first-quarter 2025 earnings, exceeding expectations with an earnings per share (EPS) of $0.38, compared to the projected $0.26. However, the company’s revenue slightly missed forecasts, coming in at $41.4 million against an expected $42.48 million. Despite this, the company saw a 12% year-over-year increase in revenue, driven by a 15% rise in rental income. Raymond (NSE:RYMD) James analyst James Rollyson maintained a Strong Buy rating for the company, highlighting its robust start to 2025 and setting a price target of $32. Rollyson noted that the company’s rental margins reached a cycle high of approximately 62%, and its adjusted EBITDA run-rate is expected to surpass the midpoint of guidance. Additionally, Natural Gas Services Group expanded its revolving credit facility from $300 million to $400 million, enhancing its financial flexibility for potential growth opportunities. The company also increased its adjusted EBITDA guidance to $79 million for the year, reflecting strong operational momentum. These developments underscore the company’s strategic focus on growth and market share gains.
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