Kodiak Gas Services repurchases $50 million of common stock

THE WOODLANDS, Texas - Kodiak Gas Services, Inc. (NYSE:KGS), a $2.85 billion market cap company with robust financial health according to InvestingPro, announced Monday it has repurchased $50 million of its common stock from Frontier TopCo Partnership, L.P., an affiliate of EQT Infrastructure III and EQT Infrastructure IV funds.

The transaction involves 1,508,750 shares at $33.14 per share, matching Kodiak’s closing stock price on August 11. The repurchase was unanimously approved by a special committee of independent directors and is expected to close on August 12. The company maintains a healthy 5.43% dividend yield and has demonstrated strong revenue growth of 31% over the last twelve months.

"Share repurchases are an integral part of our capital allocation policy and shareholder return framework," said Mickey McKee, Kodiak’s President and Chief Executive Officer, according to the company’s press release.

Following the transaction, the selling stockholder’s ownership will fall below 35%, triggering changes under the July 2023 Stockholders’ Agreement. These changes reduce the selling stockholder’s board representation to one director and eliminate their approval requirements for certain corporate actions.

The repurchase was conducted under Kodiak’s existing share repurchase program, which will have approximately $65 million remaining available for future repurchases after this transaction completes.

Kodiak Gas Services provides contract compression services in the United States, supporting natural gas and oil production and transportation infrastructure. The company is headquartered in The Woodlands, Texas. According to InvestingPro analysis, the stock appears slightly undervalued, with analyst price targets ranging from $36 to $48. Get access to the full Pro Research Report and 6 additional ProTips for KGS with an InvestingPro subscription.

In other recent news, Kodiak Gas Services reported strong financial results for the second quarter of 2025. The company posted earnings per share of $0.43, surpassing analyst forecasts of $0.40. Revenue also exceeded expectations, reaching $322.84 million compared to the projected $230.46 million. Despite these positive results, Raymond James adjusted its price target for Kodiak Gas Services, lowering it to $48 from $51, while maintaining an Outperform rating. The firm acknowledged improvements in Kodiak’s core Contract Compression business, citing better fleet utilization and increased average revenue per horsepower per month. However, they noted a weaker outlook for Other Services in the latter half of 2025 and the divestiture of smaller horsepower units. These developments reflect a mixed sentiment among investors and analysts, with strong earnings counterbalanced by concerns over future challenges.

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