One-glance verdict
Within fair range
$15.97 our estimate vs market $32.40
Wall Street consensus: $56.00 (250.7% higher than our fair-value estimate)
103% above our estimate
Fundamentals snapshot
Natural Gas Services Group, Inc.
NGS · NYQ · Energy · Oil & Gas Equipment & Services
Current price
$32.40
52-week range
$27.22 - $44.61
Market cap
$417.90M
Balance sheet
Stretched
3.26x Stretched
Net debt $329.20M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 9.9% last year.
- Reward Returns 7.3% on equity, ahead of 40% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Net debt grew 965.6% over 3 years.
What this company does
Natural Gas Services Group, Inc.
Natural Gas Services Group (NGS) provides natural gas compression equipment, which is like renting out big machines that help move natural gas around for energy companies. Most of their money (revenue) comes from renting these machines and then fixing them up (aftermarket services), which means they get paid regularly even when a machine is just sitting there waiting to be used. This rental and service model is important because it can provide a steady income stream for the company.
How the company got here
Natural Gas Services Group, Inc. (NGS) was founded in 1998 and has grown to become a significant provider of natural gas compression equipment and services to the energy industry in the United States. The company went public in 2002 and has since expanded its operations and fleet. A key turning point was the acquisition of Screw Compression Systems (SCS) in 2005, which broadened its capabilities in designing and fabricating engineered compressor packages. NGS has strategically focused on the nonconventional oil and gas production business, particularly in regions like the Permian Basin, and has seen its revenue and market capitalization grow substantially over the years.
What it actually does
NGS provides essential equipment and services that help oil and gas companies extract and process natural gas. Think of them as providing the "muscle" for moving gas. Their main offering is renting out natural gas compressors, which are machines that increase the pressure of natural gas. This is crucial for getting gas out of the ground and to processing facilities or pipelines. They also design, build, and maintain these compressors, as well as offer services for equipment owned by other companies.
Rental Services
This is the core of NGS's business, making up the majority of its revenue. The company rents out natural gas compressors of various sizes (horsepower) to oil and gas producers. These compressors are used at well sites to help increase the flow of natural gas, especially in unconventional wells like those found in shale formations. Rental contracts are typically for several months to a few years, providing a steady stream of income for NGS. The company focuses heavily on the Permian Basin, a major oil and gas producing region in the U.S., where demand for these services is high.
Sales
While renting out compressors is their main focus, NGS also sells new and used compression equipment. This segment involves designing and assembling compressor units that customers can purchase for their own operations. They also sell compressor components. This business line complements their rental services by offering customers an alternative to renting and allows NGS to leverage its manufacturing and design capabilities.
Aftermarket Services
This part of the business involves providing ongoing support and maintenance for compressors, both those they rent out and those owned by their customers. This includes services like installation, start-up, repairs, and general maintenance. Aftermarket services help ensure that the compression equipment is running efficiently and reliably, which is critical for oil and gas production. It also creates a recurring revenue stream for NGS as customers rely on their expertise for upkeep.
What management is betting on now
NGS's management is focused on growing the company by deploying larger horsepower compressors, which tend to generate more revenue and higher profits. They are strategically placing these larger units under long-term contracts, particularly to support oil production through artificial lift applications. The company is also looking for opportunities to grow through acquisitions of other compression equipment and services companies. Additionally, NGS is investing in technology, such as their proprietary SMART system, to improve equipment performance and reduce downtime, aiming to be a leader in providing efficient and reliable compression solutions.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-3.17M
FY2024 Q4
$-5.12M
FY2025 Q1
$2.01M
FY2025 Q2
$-14.81M
FY2025 Q3
$-25.06M
FY2025 Q4
$-20.70M
FY2026 Q1
$7.79M
FY2026 Q2
$6.65M
Revenue
$51.40M
Net income
$3.83M
Diluted EPS
0.30
Operating cash flow
$25.43M
Free cash flow
$6.65M
Fetching…
Sources
Revenue
$48.47M
Net income
$6.76M
Diluted EPS
0.53
Operating cash flow
$23.04M
Free cash flow
$7.79M
Fetching…
Sources
Revenue
$46.15M
Net income
$4.10M
Diluted EPS
0.32
Operating cash flow
$13.87M
Free cash flow
$-20.70M
Fetching…
Sources
Revenue
$43.40M
Net income
$5.78M
Diluted EPS
0.46
Operating cash flow
$16.80M
Free cash flow
$-25.06M
Fetching…
Sources
Revenue
$41.38M
Net income
$5.19M
Diluted EPS
0.41
Operating cash flow
$11.00M
Free cash flow
$-14.81M
Fetching…
Sources
Revenue
$41.38M
Net income
$4.85M
Diluted EPS
0.38
Operating cash flow
$21.27M
Free cash flow
$2.01M
Fetching…
Sources
Revenue
$40.66M
Net income
$2.87M
Diluted EPS
0.22
Operating cash flow
$9.43M
Free cash flow
$-5.12M
Fetching…
Sources
Revenue
$40.69M
Net income
$5.01M
Diluted EPS
0.40
Operating cash flow
$25.92M
Free cash flow
$-3.17M
Fetching…
Sources
Is it cheap or expensive?
Fair value $15.97 vs current price $32.40
Wall Street consensus is the average analyst price target: $56.00 (250.7% higher than our fair-value estimate).
Our most-likely fair value is $15.97 a share — about 50.7% away from today's price of $32.40, so the stock currently looks fairly priced.
Is it drowning in debt?
Stretched
Net debt $329.2M. Interest coverage 3.3x.
Net debt
$329.20M
Interest coverage
3.26x
Natural Gas Services Group, Inc.'s profit covers its interest bill about 3.3 times over. which is stronger than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
NGS
BASELINE
Natural Gas Services Group, Inc.
Total debt $329.28M Interest coverage 3.26x This is the baseline the peer rows are being compared against.
Total debt $2.36B Interest coverage 3.48x +7% vs NGS Has roughly the same debt cushion as NGS.
Total debt $2.96B Interest coverage 1.70x -48% vs NGS Carries about 1.9x less debt cushion than NGS.
Total debt $2.82B Interest coverage 2.06x -37% vs NGS Carries about 1.6x less debt cushion than NGS.
Total debt $607.00M Interest coverage 3.80x +17% vs NGS Carries about 1.2x more debt cushion than NGS.
What you should know
The case for and against NGS
3 Rewards
1 Risk
Rewards
-
Revenue grew 9.9% last year.
-
Returns 7.3% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Net debt grew 965.6% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
20.12x
Forward P/E
12.41x
P/B
1.42x
P/S
2.21x
EV/EBITDA
8.89x
PEG ratio
0.82x
Profitability
How much profit each dollar creates
Gross margin
59.2%
Operating margin
19.3%
Net margin
10.8%
ROE
7.3%
ROA
4.4%
Health
Liquidity and balance-sheet strength
Debt / equity
1.12x
Current ratio
2.01x
Quick ratio
0.69x
Total debt
$329.28M
Total cash
$84.00K
Growth
How the business has been compounding
Revenue TTM
$189.42M
Revenue 5Y CAGR
24.2%
EPS TTM
1.61
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$79.13M
Free CF TTM
$-58.56M
FCF margin
-30.9%
Dividend
Shareholder payout
Yield
1.8%
Payout ratio
22.4%
Last ex-div date
2026-08-19