Jehoshaphat Research short shares of Montrose Environmental

In a recently published report, Jehoshaphat Research says it is short Montrose Environmental. “Based on our research, we believe this company has: Obscured a decline in organic revenues in both the short and long terms; Pulled forward (inflated) revenues, as evidenced by surging contract and other assets, DSOs, etc; Adjusted EBITDA that is inflated by approximately 80%, making peer-based multiple analysis useless; A roll-up strategy that is chaotic, has failed to result in “scale,” and led to heavy employee attrition; No underlying free cash flow to shareholders, and a disturbing trend in this metric; Much more financial leverage than it appears to have,” the report reads. Further, Jehoshaphat says that recent acquisitions of substantial size “appear to be going bad quickly and quietly.” ‘The sudden disappearance of a bunch of middle managers and executives at MEG in September suggests recent downsizing, which is obviously incompatible with the level of revenue growth modeled by the Street for Q4 and 2025. Accordingly, catalysts for the short are the next two earnings reports and the FY25 guidance announcement,” it adds. Shares of Montrose Environmental are down about 2% to $26.73 in morning trading.