Montrose Environmental Group (MEG) AI Stock Analysis

• Market Cap: $422.90M
• Dividend Yield: N/A
• Average Volume (3M): 572.73K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.35
• Revenue Growth: 11.56%
• EPS Growth: -40.46%
• Country: US
• Employees: 3,410
• Sector: Industrials
• Sector Strength: 63
• Industry: Waste Management
• EPS (TTM): -2.21
• Shares Outstanding: 34,663,597
• 10 Day Avg. Volume: 618,212
• 30 Day Avg. Volume: 572,726
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.72
• Price to Cash Flow (P/CF): 3.90
• P/FCF Ratio: 3.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $31.60
• Price Target Upside: 166.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Montrose Environmental Group demonstrates strong revenue growth but faces significant profitability and liquidity challenges. While technical indicators signal potential volatility, corporate events and earnings call data provide positive strategic insights. The overall score reflects a balance between growth potential and existing financial risks.

Positive Factors

Contract Wins

MEG was selected by the U.S. Air Force for a multi-year contract addressing environmental remediation of traditional and emerging contaminants.

Financial Performance

Analysts remain optimistic about Montrose Environmental Group's ability to maintain its 2025 guidance despite macroeconomic challenges.

Market Recognition

MEG’s environmental expertise continues to be recognized by multiple governments and agencies, as validated by the latest DoD award.

Negative Factors

Regulatory Risks

There are lingering questions about the Supreme Court Loper Bright ruling and potential changes in the regulatory environment.

Stock Decline

Shares of MEG have declined 30% relative to the 30-day average on perceived risks related to the new Trump administration, DOGE, deregulation, and the ability to meet organic growth and free cash flow expectations.

Stock Performance

Shares of Montrose Environmental Group have been significant under-performers over much of the past nine months.

Montrose Environmental Group Business Overview & Revenue Model

Company Description

Montrose Environmental Group, Inc. operates as an environmental services company in the United States. The company operates in three segments: Assessment, Permitting and Response; Measurement and Analysis; and Remediation and Reuse. The Assessment, Permitting and Response segment provides scientific advisory and consulting services to support environmental assessments, environmental emergency response and recovery, toxicology consulting and environmental audits and permits for current operations, facility upgrades, new projects, decommissioning projects, and development projects. Its technical advisory and consulting services include regulatory compliance support and planning, environmental, and ecosystem and toxicological assessments and support during responses to environmental disruptions. The Measurement and Analysis segment tests and analyzes air, water, and soil to determine concentrations of contaminants, as well as the toxicological impact of contaminants on flora, fauna, and human health. Its services include source and ambient air testing and monitoring, leak detection, and advanced analytical laboratory services, such as air, storm water, wastewater, and drinking water analysis. The Remediation and Reuse segment provides engineering, design, implementation, and operations and maintenance services primarily to treat contaminated water, remove contaminants from soil, or create biogas from waste. It serves technology, media, chemical, energy, power and utility, industrial and manufacturing, financial, and engineering industries, as well as local, state, provincial, and federal government entities. The company was founded in 2012 and is headquartered in North Little Rock, Arkansas.

How the Company Makes Money

Montrose Environmental Group makes money through a diversified revenue model that includes service fees for air quality measurement, environmental laboratory analyses, and consulting services. The company charges clients for conducting environmental assessments and providing solutions that ensure compliance with environmental regulations. MEG's key revenue streams are derived from contracts with industrial firms, governmental bodies, and commercial entities seeking to manage their environmental impact. The company also benefits from strategic partnerships and acquisitions that expand its service offerings and client base, contributing significantly to its earnings.

Montrose Environmental Group Financial Statement Overview

Summary

Montrose Environmental Group exhibits strong revenue growth but faces persistent net losses and negative cash flow. The balance sheet shows moderate financial stability with low leverage, yet operational inefficiencies and high capital expenditures pose risks to financial health.

Income Statement

Montrose Environmental Group's revenue has shown consistent growth, with a TTM revenue increase of 11.57% from the previous year. However, the company has been facing persistent net losses, indicating challenges in achieving profitability. The gross profit margin improved to 38.14% in TTM, but negative EBIT and EBITDA margins highlight operational inefficiencies.

Balance Sheet

The balance sheet reflects moderate financial stability with a debt-to-equity ratio of 0.17, indicating a conservative leverage position. The equity ratio is 45.06%, suggesting a solid capital structure. However, the company has been experiencing fluctuations in equity due to recurring net losses.

Cash Flow

Free cash flow has turned negative in the TTM period, reflecting a free cash flow decline from the previous year. The operating cash flow to net income ratio is negative, indicating the company is struggling to convert its earnings into cash flow. High capital expenditures contribute to cash outflows, impacting liquidity.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
696.39M	624.21M	544.42M	546.41M	328.24M
	Gross Profit
278.20M	240.31M	192.53M	177.38M	112.75M
	EBIT
-36.72M	-28.42M	-27.56M	12.37M	-30.34M
	EBITDA
25.88M	31.93M	32.44M	36.91M	-7.41M
	Net Income Common Stockholders
-62.31M	-30.86M	-31.82M	-25.32M	-57.95M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
12.94M	23.24M	89.83M	146.25M	34.39M
	Total Assets
990.35M	816.79M	791.91M	833.09M	602.73M
	Total Debt
76.18M	210.34M	202.12M	205.77M	175.90M
	Net Debt
63.24M	187.10M	112.29M	59.52M	141.52M
	Total Liabilities
544.09M	342.61M	325.80M	363.67M	312.65M
	Stockholders Equity
446.26M	474.18M	466.12M	469.43M	290.07M
Cash Flow		Free Cash Flow
902.00K	23.09M	10.65M	30.00M	-5.93M
	Operating Cash Flow
22.23M	56.02M	20.65M	37.58M	1.85M
	Investing Cash Flow
-138.04M	-101.62M	-38.69M	-71.64M	-179.74M
	Financing Cash Flow
106.00M	-20.11M	-38.76M	146.10M	205.90M

Montrose Environmental Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MEG, the sentiment is Negative. The current price of 11.85 is below the 20-day moving average (MA) of 15.16, below the 50-day MA of 17.84, and below the 200-day MA of 24.91, indicating a bearish trend. The MACD of -1.22 indicates Positive momentum. The RSI at 32.10 is Neutral, neither overbought nor oversold. The STOCH value of 12.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MEG.

Montrose Environmental Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WM	80 Outperform	$95.28B	34.79	36.24%	1.36%	8.01%	20.17%
RSG	75 Outperform	$77.58B	38.28	18.61%	0.95%	7.13%	18.68%
ECL	75 Outperform	$67.44B	32.26	25.14%	1.03%	2.75%	54.39%
CLH	70 Outperform	$10.20B	25.51	16.69%	―	8.89%	6.76%
Sector *	62 Neutral	$7.26B	12.38	3.01%	3.40%	3.58%	-14.13%
MEG	51 Neutral	$422.90M	―	-12.30%	―	11.56%	-40.46%

Montrose Environmental Group Corporate Events

Montrose Environmental Group Reports Record 2024 Financial Results

Montrose Environmental Group reported record financial results for the fourth quarter and full year of 2024, with significant revenue growth driven by acquisitions and organic expansion. Despite a net loss due to a one-time charge and increased expenses, the company achieved a record Consolidated Adjusted EBITDA, reflecting improved operating efficiencies and strategic advantages. Looking forward to 2025, Montrose anticipates continued revenue and EBITDA growth, supported by strong market demand and strategic focus on margin expansion and cash flow improvement.

Montrose Environmental Expands Board with New Appointment

On February 19, 2025, Montrose Environmental Group expanded its board of directors to ten members, appointing Mr. Vincent Colman as an independent Class III director. This move is expected to enhance the company’s governance and audit capabilities, as Mr. Colman, a recognized audit committee financial expert, joins the Audit Committee, further strengthening Montrose’s compliance and oversight functions.

Montrose Environmental Group Cancels Executive Stock Rights

Montrose Environmental Group’s Board of Directors has approved the cancellation of outstanding and unvested stock appreciation rights granted to the company’s executive officers and certain other executives, effective December 31, 2024. This voluntary cancellation was agreed upon by the involved parties and is not being compensated with any other equity or cash-based awards, potentially impacting executive compensation structures and aligning with broader strategic goals.