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Mrc Global Inc. (MRC)
NYSE:MRC
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MRC Global
(NYSE:MRC)
67Neutral
Positive Factors
Capital Structure
The redemption of convertible preferred equity is viewed as a solid, low-risk use of capital, eliminating potential dilution to common equity.
Cash Flow Performance
MRC Global's cash flow from operations was $95 million, exceeding Street estimates, indicating structural improvement in cash flow.
Share Repurchase Program
MRC announced a $125 million share repurchase program, which is expected to be funded comfortably from cash flow, representing approximately 12% of the company's market cap.
Negative Factors
Market Valuation
The adjustment in price target is partly due to lower valuation across the market given geopolitical and economic uncertainty, and a recent pullback in crude prices.
Price Target Adjustment
The price target for MRC Global Inc is now $15, down from $17.
MRC Global (MRC) vs. S&P 500 (SPY)
Market Cap
$1.03B
Dividend YieldN/A
Average Volume (3M)823.42K
Price to Earnings (P/E)40.5
Beta (1Y)1.45
Revenue Growth-9.17%
EPS Growth-71.36%
CountryUS
Employees2,600
SectorEnergy
Sector Strength87
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.30
Shares Outstanding86,083,435
10 Day Avg. Volume1,105,601
30 Day Avg. Volume823,425
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.34
Price to Cash Flow (P/CF)3.20
P/FCF Ratio8.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.00Price Target Upside33.33% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
MRC Global Business Overview & Revenue Model
Company DescriptionMRC Global (MRC) is a leading distributor of pipe, valve, and fitting (PVF) products and services to the energy and industrial sectors. The company serves a wide range of industries including oil and gas, chemical, refining, and power generation, providing essential materials and components that ensure operational efficiency and safety. With a global presence, MRC Global offers a comprehensive range of PVF products sourced from a network of trusted manufacturers, along with value-added services such as inventory management and technical support.
How the Company Makes MoneyMRC Global primarily generates revenue by distributing PVF products to various sectors, with a strong focus on energy-related industries. The company's revenue model is based on purchasing products from manufacturers and selling them to customers at a markup. Key revenue streams include direct sales to end-users in industries like oil and gas extraction, refineries, and petrochemical companies, as well as sales through long-term customer contracts. MRC Global also benefits from strategic partnerships with leading manufacturers, which help ensure a steady supply of high-quality products. Additionally, the company offers value-added services such as inventory management, technical product support, and customized supply chain solutions, which further contribute to its earnings.
MRC Global Financial Statement Overview
Summary
MRC Global shows mixed financial performance. While strong cash flow and profitability metrics are positive, revenue decline and increased leverage pose risks. The company demonstrates resilience with stable operational efficiency but faces challenges in revenue growth and higher financial leverage.Income Statement
MRC Global demonstrated a strong gross profit margin of 20.60% in 2024, slightly improving from 20.22% in 2023. However, the revenue decreased by 11.77% from 2023 to 2024, reflecting market challenges. The net profit margin improved to 2.59% in 2024 from 3.34% in 2023, indicating better cost management. Notably, EBIT and EBITDA margins were stable at 4.48% in 2024, showcasing operational efficiency.75
Positive
Balance Sheet
The debt-to-equity ratio increased to 1.11 in 2024 from 0.62 in 2023, indicating higher financial leverage. Return on equity dropped to 15.12% in 2024 from 13.52% in 2023, showing less effective use of equity. The equity ratio stood at 31.77% in 2024, indicating a moderate level of financial stability.68
Positive
Cash Flow
MRC Global's free cash flow grew significantly by 49.40% from 2023 to 2024, reflecting strong cash generation. The operating cash flow to net income ratio improved to 3.54 in 2024, indicating efficient conversion of net income into cash. The free cash flow to net income ratio was 3.18, showcasing robust cash flow management.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.20B | 3.01B | 3.41B | 3.36B | 2.67B | 2.56B | Gross Profit |
| 649.00M | 620.00M | 690.00M | 610.00M | 417.00M | 431.00M | EBIT |
| 150.00M | 135.00M | 187.00M | 140.00M | 7.00M | -13.00M | EBITDA |
| 189.00M | 135.00M | 225.00M | 173.00M | 52.00M | -209.00M | Net Income Common Stockholders |
| 99.00M | 78.00M | 114.00M | 75.00M | -39.00M | -274.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 43.00M | 63.00M | 131.00M | 32.00M | 48.00M | 119.00M | Total Assets |
| 2.43B | 1.62B | 1.89B | 1.90B | 1.67B | 1.78B | Total Debt |
| 684.00M | 571.00M | 521.00M | 558.00M | 507.00M | 607.00M | Net Debt |
| 641.00M | 508.00M | 390.00M | 526.00M | 459.00M | 488.00M | Total Liabilities |
| 1.39B | 1.11B | 1.04B | 1.15B | 993.00M | 1.08B | Stockholders Equity |
| 1.05B | 516.00M | 843.00M | 741.00M | 678.00M | 705.00M |
| Cash Flow | Free Cash Flow | ||||
| 258.00M | 248.00M | 166.00M | -31.00M | 46.00M | 250.00M | Operating Cash Flow |
| 286.00M | 276.00M | 181.00M | -20.00M | 56.00M | 261.00M | Investing Cash Flow |
| -24.00M | -27.00M | -14.00M | -11.00M | -7.00M | 19.00M | Financing Cash Flow |
| -251.00M | -314.00M | -67.00M | 17.00M | -118.00M | -195.00M |
MRC Global Technical Analysis
Negative
12.00
Price Trends
12.99
Negative
13.14
Negative
12.96
Negative
Market Momentum
-0.19
Negative
49.35
Neutral
83.65
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MRC, the sentiment is Negative. The current price of 12 is above the 20-day moving average (MA) of 11.76, below the 50-day MA of 12.99, and below the 200-day MA of 12.96, indicating a neutral trend. The MACD of -0.19 indicates Negative momentum. The RSI at 49.35 is Neutral, neither overbought nor oversold. The STOCH value of 83.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MRC.
MRC Global Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $6.77B | 24.55 | 14.34% | 1.60% | 5.49% | 51.02% | |
72 Outperform | $1.81B | 23.00 | 7.33% | ― | 2.24% | -66.96% | |
70 Outperform | $4.46B | 18.89 | 17.09% | 4.25% | -5.24% | -28.94% | |
67 Neutral | $1.03B | 40.47 | 10.01% | ― | -9.17% | -71.36% | |
66 Neutral | $2.58B | 34.92 | 6.56% | 1.58% | -69.82% | -78.10% | |
58 Neutral | $9.28B | 5.49 | -6.28% | 7.46% | -0.20% | -73.68% | |
55 Neutral | $338.45M | ― | -1.62% | ― | -11.47% | -187.17% |
* Energy Sector Average
Performance Comparison
MRC
MRC Global
12.00
-0.57
-4.53%
FLS
Flowserve
51.36
6.23
13.80%
MSM
MSC Industrial
79.86
-13.42
-14.39%
OIS
Oil States International
5.46
-0.70
-11.36%
WOR
Worthington Industries
51.52
-9.75
-15.91%
DNOW
Now
17.30
2.10
13.82%
MRC Global Earnings Call Summary
Earnings Call Date: Mar 14, 2025 | % Change Since: 8.01% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed outlook. While the company achieved significant financial restructuring and cash flow generation, challenges remain with revenue declines, margin pressures, and sector-specific issues. However, the positive developments in capital structure and international growth provide some optimism for the future.Highlights
Successful Capital Structure Simplification
MRC Global issued a new $350 million Term Loan B to repurchase convertible preferred shares, leading to a credit rating upgrade and expected to be accretive to cash flow and earnings for 2025 and beyond.
Strong Cash Flow Generation
The company generated $96 million in operating cash flow in Q3 and $197 million through the third quarter, meeting its 2024 full-year target of $200 million one quarter early. Guidance for 2024 operating cash flow was increased to $220 million or more.
International Business Growth
International revenue grew 21% year-over-year and 4% sequentially, driven by growth in the PTI and DIET sectors, with a backlog 22% higher than a year ago.
Improved Net Working Capital Efficiency
The company set a new record low for net working capital to sales at 14.3% in Q3.
Lowlights
Revenue Decline
Q3 revenue was $797 million, a 4% decline from the previous quarter, with PTI sector revenue down due to slowing oilfield activity in the U.S.
Adjusted EBITDA Margin Decline
Adjusted EBITDA margins were 6% for Q3, lower than the first half of the year, affected by lower sales and adjusted gross margins.
Challenges in PTI Sector
The PTI sector faced slower U.S. oilfield activity due to producer consolidation and lower oil and natural gas prices.
Project Delays in DIET Sector
Several U.S. projects and refinery turnarounds were delayed into 2025, impacting DIET sector performance.
Company Guidance
During MRC Global's Q3 2024 earnings call, several key metrics and guidance updates were discussed, reflecting the company's strategic direction and financial health. The company reported third-quarter revenue of $797 million, marking a 4% sequential decline, attributed to reduced U.S. oilfield activity and completed projects. Despite this, MRC Global achieved a record low net working capital to sales ratio of 14.3%, significantly boosting operating cash flow to $96 million for the quarter and $197 million year-to-date, surpassing their annual target a quarter early. The leverage ratio was adjusted to 1.7x following the issuance of a $350 million Term Loan B, intended to replace convertible preferred shares and improve capital structure. The company raised its 2024 cash flow guidance to $220 million or more, with expectations of consistent cash generation between $100 million and $150 million annually over the next three years. Adjusted EBITDA margins were reported at 6% for the third quarter, with a focus on reducing SG&A costs in 2025 to enhance profitability. MRC Global also anticipates revenue growth in its international segment and improved spending in the gas utilities sector in 2025, despite ongoing challenges in the PTI sector due to oilfield activity slowdowns.MRC Global Corporate Events
M&A TransactionsStock BuybackBusiness Operations and Strategy
MRC Global Sells Canadian Operations to Emco Corporation
Positive
Mar 17, 2025
On March 14, 2025, MRC Global Inc. announced the sale of its Canadian operations to Emco Corporation, aiming to focus on geographies with stronger revenue growth and profit potential. The company reported significant strategic accomplishments in 2024, including simplifying its capital structure, initiating a share buyback program, and maintaining strong international growth, despite challenges in the US segment. The company is optimistic about returning to growth in 2025, driven by improvements in its gas utilities business, a favorable inflationary environment, and strong midstream natural gas prospects.
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
MRC Global Reports Strong 2024 Financial Results
Positive
Mar 14, 2025
MRC Global reported its full year and fourth quarter 2024 financial results, highlighting a net income of $78 million for the year despite a net loss of $1 million in the fourth quarter. The company achieved $268 million in operating cash flows, the highest since 2015, and maintained strong gross profit margins. Looking forward, MRC Global is optimistic about 2025, driven by growth in its gas utilities business and new market penetrations, alongside a strategic joint venture for smart meter development. The company also plans a $125 million share buyback and aims to achieve a target net debt leverage ratio of 1.5x by year-end.
Shareholder MeetingsFinancial Disclosures
MRC Global to Announce 2024 Financial Results
Neutral
Mar 13, 2025
MRC Global announced that it will release its financial results for the fourth quarter and full year 2024 on March 14, 2025, before the market opens, followed by a conference call to discuss these results. Additionally, the company has scheduled its 2025 Annual Meeting of Stockholders to be held virtually on May 29, 2025. These announcements indicate MRC Global’s ongoing commitment to transparency and engagement with its stakeholders, potentially impacting its market positioning and investor relations.
Financial DisclosuresRegulatory Filings and Compliance
MRC Global Delays 2024 Form 10-K Filing
Neutral
Mar 3, 2025
On March 3, 2025, MRC Global announced a delay in filing its 2024 Form 10-K with the SEC, now expected by March 18, 2025, due to extended year-end inventory procedures. The company has completed physical inventory counts but needs additional time for analysis, with no expected material net inventory adjustments or restatements of prior periods.
Financial DisclosuresRegulatory Filings and Compliance
MRC Global Delays 2024 Financial Results Release
Neutral
Feb 6, 2025
MRC Global announced a postponement of its fourth quarter and full-year 2024 financial results release, initially scheduled for February 11 and 12, 2025. The delay allows additional time for year-end audit procedures related to inventory cycle counts, with the company expecting to file its Form 10-K by March 3, 2025.
Stock BuybackBusiness Operations and Strategy
MRC Global Launches $125 Million Share Buyback Plan
Positive
Jan 3, 2025
MRC Global has announced a $125 million share repurchase program authorized by its Board of Directors, set to expire in January 2028. This move is part of their capital allocation strategy aimed at maintaining a net debt leverage ratio below 1.5x, returning cash to shareholders, and investing in future growth, reflecting confidence in their financial position and operational efficiency.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.