Kodiak Gas Services, Inc. (NYSE: KGS)

Sector: Energy Industry: Oil & Gas Equipment & Services CIK: 0001767042
Market Cap 4.56 Bn
P/B 3.39
P/E 91.00
P/S 3.58
ROIC (Qtr) 5.67
Div Yield % 5.00
Rev 1y % (Qtr) -0.59
Total Debt (Qtr) 2.66 Bn
Debt/Equity (Qtr) 2.13
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About

Investment thesis

Bull case

  • Operating cash flow of 523.36M provides exceptional 362.44x coverage of minority interest expenses 1.44M, showing strong core operations.
  • Operating cash flow of 523.36M provides strong 22.17x coverage of stock compensation 23.61M, indicating sustainable incentive practices.
  • Strong operating cash flow of 523.36M provides 3.83x coverage of SG&A expenses 136.55M, showing efficient operational cost management.
  • Tangible assets of 3.81B provide exceptional 54.80x coverage of deferred revenue 69.47M, showing strong service capability backing.
  • Operating cash flow of 523.36M provides strong 7.53x coverage of deferred revenue 69.47M, indicating service delivery capability.

Bear case

  • Operating cash flow of 523.36M barely covers its investment activities of (288.84M), with a coverage ratio of -1.81, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 724000 against inventory of 101.24M, the 0.01 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 523.36M provides thin coverage of dividend payments of (152.95M) with a -3.42 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 215.88M relative to inventory of 101.24M (2.13 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of 308.86M show weak coverage of depreciation charges of 281.01M, with a 1.10 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Oil & Gas Equipment & Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SLB Slb Limited/Nv 59.56 Bn 20.77 2.67 11.64 Bn
2 BKR Baker Hughes Co 59.13 Bn 22.85 2.13 6.09 Bn
3 FTI TechnipFMC plc 28.99 Bn 127.65 1.96 1.34 Bn
4 HAL Halliburton Co 28.83 Bn 22.47 1.30 8.13 Bn
5 WFRD Weatherford International plc 7.39 Bn 17.15 1.50 1.64 Bn
6 NOV NOV Inc. 7.09 Bn 48.90 0.81 2.34 Bn
7 VAL Valaris Ltd 6.32 Bn 15.83 2.61 1.09 Bn
8 KGS Kodiak Gas Services, Inc. 4.56 Bn 91.00 3.58 2.66 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.64 1.17
EV to Cash from Ops. EV/CFO 18.39 -3.30
EV to Debt EV to Debt 2.71 10.99
EV to EBIT EV/EBIT 25.58 4.49
EV to EBITDA EV/EBITDA 12.64 6.54
EV to Free Cash Flow [EV/FCF] EV/FCF 88.92 31.31
EV to Market Cap EV to Market Cap 1.58 1.36
EV to Revenue EV/Rev 5.64 2.02
Price to Book Value [P/B] P/B 3.39 1.73
Price to Earnings [P/E] P/E 91.00 20.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.49 0.42
Dividend Payout Ratio % Div Payout % (Qtr) 207.20 5.49
Dividend per Basic Share Div per Share (Qtr) 1.31 0.26
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 48.63 6.68
Interest Coverage Int. cover (Qtr) 1.54 -10.19
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 10.45 -37.90
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -90.26 1,334.16
Dividend Growth (1y) % Div 1y % (Qtr) -17.09 4.06
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 55.63 -12.71
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 25.15 19.66
EBIT Growth (1y) % EBIT 1y % (Qtr) 36.89 -26.68
EBT Growth (1y) % EBT 1y % (Qtr) 175.51 39.97
EPS Growth (1y) % EPS 1y % (Qtr) 207.41 27.30
FCF Growth (1y) % FCF 1y % (Qtr) 564.87 -867.31
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 25.26 5.49
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.29 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.19 0.10
Cash Ratio Cash Ratio (Qtr) 0.00 0.62
Current Ratio Curr Ratio (Qtr) 0.98 2.25
Debt to Equity Ratio Debt/Equity (Qtr) 2.13 0.88
Interest Cover Ratio Int Coverage (Qtr) 1.54 -10.19
Times Interest Earned Times Interest Earned (Qtr) 1.54 -10.19
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 45.90 16.47
EBIT Margin % EBIT Margin % (Qtr) 24.04 -0.62
EBT Margin % EBT Margin % (Qtr) 8.42 4.39
Gross Margin % Gross Margin % (Qtr) 62.80 30.41
Net Profit Margin % Net Margin % (Qtr) 5.80 2.67