Montauk Renewables, Inc. (NASDAQ: MNTK)

Sector: Basic Materials Industry: Specialty Chemicals CIK: 0001826600
Market Cap 233.02 Mn
P/B 0.89
P/E -25.33
P/S 1.45
ROIC (Qtr) -3.41
Div Yield % 0.00
Rev 1y % (Qtr) -31.34
Total Debt (Qtr) 72.97 Mn
Debt/Equity (Qtr) 0.28

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 30.72M provides robust 0.42x coverage of total debt 72.97M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 363.43M provides 4.98x coverage of total debt 72.97M, indicating robust asset backing and low credit risk.
  • Tangible assets of 363.43M provide robust 25.83x coverage of other current liabilities 14.07M, indicating strong asset backing.
  • Operating cash flow of 30.72M fully covers other non-current liabilities 10.12M by 3.03x, showing strong long-term stability.
  • Retained earnings of 54.60M provide strong 3.88x coverage of other current liabilities 14.07M, indicating earnings quality.

Bear case

  • Operating cash flow of 30.72M barely covers its investment activities of (87.28M), with a coverage ratio of -0.35, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of (52.37M) provides weak coverage of capital expenditures of 83.09M, with a -0.63 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of 30.72M provides minimal -11.98x coverage of tax expenses of (2.56M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of (7.24M) show weak coverage of depreciation charges of 27.84M, with a -0.26 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (52.37M) represents just -5.86x of debt issuance 8.93M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Specialty Chemicals
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 LIN Linde Plc 218.63 Bn 38.41 6.61 25.93 Bn
2 SHW Sherwin Williams Co 110.34 Bn 170.54 11.54 13.58 Bn
3 ECL Ecolab Inc. 80.35 Bn 80.18 5.93 8.67 Bn
4 APD Air Products & Chemicals, Inc. 56.37 Bn 48.29 5.86 18.31 Bn
5 PPG Ppg Industries Inc 34.00 Bn 31.05 2.58 7.91 Bn
6 LYB LyondellBasell Industries N.V. 17.46 Bn 5.03 0.49 13.22 Bn
7 DD DuPont de Nemours, Inc. 16.63 Bn 3.65 0.32 8.90 Bn
8 ALB Albemarle Corp 14.44 Bn 48.94 6.36 3.63 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.73 1.52
EV to Cash from Ops. EV/CFO 9.13 12.52
EV to Debt EV to Debt 3.84 13.65
EV to EBIT EV/EBIT -38.74 21.45
EV to EBITDA EV/EBITDA 13.66 14.82
EV to Free Cash Flow [EV/FCF] EV/FCF -5.35 29.24
EV to Market Cap EV to Market Cap 1.20 3.84
EV to Revenue EV/Rev 1.75 89.11
Price to Book Value [P/B] P/B 0.89 5.48
Price to Earnings [P/E] P/E -25.33 16.02
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -5.31
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -75.74
Dividend per Basic Share Div per Share (Qtr) 0.00 1.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 23.50
Interest Coverage Int. cover (Qtr) -1.60 -8.92
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -17.01 -1.67
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -87.70 72.99
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -3.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -120.12 -31.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -63.40 51.49
EBIT Growth (1y) % EBIT 1y % (Qtr) -120.80 0.57
EBT Growth (1y) % EBT 1y % (Qtr) -141.35 -80.35
EPS Growth (1y) % EPS 1y % (Qtr) -137.50 -90.82
FCF Growth (1y) % FCF 1y % (Qtr) -708.24 -50.40
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -40.78 219.02
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.42 0.70
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.41
Cash Ratio Cash Ratio (Qtr) 0.13 1.28
Current Ratio Curr Ratio (Qtr) 0.33 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 0.28 0.92
Interest Cover Ratio Int Coverage (Qtr) -1.60 -8.92
Times Interest Earned Times Interest Earned (Qtr) -1.60 -8.92
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 12.80 -333.97
EBIT Margin % EBIT Margin % (Qtr) -4.50 -374.34
EBT Margin % EBT Margin % (Qtr) -7.32 -379.75
Gross Margin % Gross Margin % (Qtr) 34.70 29.26
Net Profit Margin % Net Margin % (Qtr) -5.70 -380.67