Natural Gas Services Q4 core profit beats estimates, helped by better fleet utilization

Overview

• US natural gas compression provider's Q4 rental revenue rose 16% yr/yr

• Q4 adjusted EBITDA grew 17.6% and beat analyst expectations

• Company attributes results to record rented horsepower and higher fleet utilization

Outlook

• Company sees 2026 adjusted EBITDA of $90.5 mln to $95.5 mln

• NGS expects 2026 growth capital expenditures of $55 mln to $70 mln

• Maintenance capital expenditures for 2026 expected at $15 mln to $18 mln

Result Drivers

• FLEET EXPANSION - Q4 benefited from a 14.4% yr/yr increase in rented horsepower, reaching 563,000, with record fleet utilization at 84.9%

• PRICING IMPROVEMENT - Co cited continued pricing strength across its compression fleet as supporting higher rental revenue in Q4

• COST PRESSURES - Higher selling, general and administrative expenses and increased depreciation partially offset gains from revenue growth

Company press release: ID:nGNX48rt2l

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• Wall Street's median 12-month price target for Natural Gas Services Group Inc is $40.00, about 12.4% above its March 13 closing price of $35.59

• The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 16 three months ago

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