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Ngl Energy Partners Lp (NGL)
NYSE:NGL
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NGL Energy Partners
(NYSE:NGL)
43Neutral
Positive Factors
Financial Performance
Free cash flow per unit exceeded expectations, coming in above forecasted levels.
Growth Prospects
Management anticipates growth in the Crude Oil Logistics segment driven by future production expansion in the DJ Basin.
Operational Performance
Butane blending margins and volumes were higher than management's targets, showing strong operational performance into the fiscal second quarter.
Negative Factors
Earnings Guidance
Management reduced FY25 EBITDA guidance by 3% due to lower expectations for the Liquids segment and declining crude oil prices.
Earnings Miss
Fiscal second quarter adjusted EBITDA was below both consensus and internal estimates.
Segment Performance
All three business segments delivered contributions below internal estimates, affecting overall performance.
NGL Energy Partners (NGL) vs. S&P 500 (SPY)
Market Cap
$599.34M
Dividend YieldN/A
Average Volume (3M)345.02K
Price to Earnings (P/E)―
Beta (1Y)0.57
Revenue Growth-19.76%
EPS Growth-323.41%
CountryUS
Employees607
SectorEnergy
Sector Strength85
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)-2.53
Shares Outstanding132,012,770
10 Day Avg. Volume255,207
30 Day Avg. Volume345,017
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.10
Price to Cash Flow (P/CF)1.00
P/FCF Ratio1.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.00Price Target Upside98.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
NGL Energy Partners Business Overview & Revenue Model
Company DescriptionNGL Energy Partners LP is a diversified midstream energy company based in the United States. The company operates in multiple sectors of the energy industry, including crude oil logistics, water solutions, and liquids logistics. Its core services encompass transportation, storage, blending, and marketing of crude oil, natural gas liquids, and refined products, as well as water disposal and treatment services for oil and gas producers.
How the Company Makes MoneyNGL Energy Partners generates revenue through a variety of streams primarily associated with its midstream energy services. The crude oil logistics segment earns money by transporting, storing, and marketing crude oil, leveraging infrastructure such as pipelines and terminals. The water solutions sector provides produced water services, including transportation, treatment, and disposal, which are critical for oil and gas producers, especially in hydraulic fracturing operations. The liquids logistics segment involves the procurement, transportation, storage, and marketing of natural gas liquids (NGLs) and refined products. The company's earnings are also supported by significant partnerships and contracts with oil and gas producers, refineries, and other industry participants that ensure steady demand for its services.
NGL Energy Partners Financial Statement Overview
Summary
NGL Energy Partners faces significant financial challenges, primarily due to high leverage and negative profitability. While operational cash flows remain strong, the company's high debt levels and negative equity indicate financial instability risks. Despite some improvements in EBITDA margins, the persistent negative net income requires strategic focus on cost management and revenue growth to enhance financial health.Income Statement
The income statement indicates challenges with profitability as evidenced by negative net income in recent years, though some improvements are seen in EBITDA margin. Revenue growth has been inconsistent, with a decline in the most recent TTM period after a previous increase. The overall gross profit margin has shown some resilience, but the net profit margin remains negative, indicating persistent operational difficulties.42
Neutral
Balance Sheet
The balance sheet reveals significant challenges, particularly with high leverage, as the debt-to-equity ratio is elevated due to considerable total debt and low equity. The return on equity is negative in recent periods, reflecting profitability issues. The equity ratio is low, indicating a high reliance on debt financing, which raises potential financial stability concerns.35
Negative
Cash Flow
Cash flow analysis shows some positive trends, with operating cash flow consistently positive, indicating good cash generation from operations. However, free cash flow has experienced fluctuations, with recent periods showing growth. The operating cash flow to net income ratio is high due to negative net income, suggesting operational cash generation strengths despite profitability issues.55
Neutral
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.92B | 6.96B | 8.69B | 7.95B | 5.23B | 7.58B | Gross Profit |
| 670.80M | 723.25M | 771.26M | 519.88M | 415.97M | 714.30M | EBIT |
| 145.91M | 177.57M | 392.18M | 163.99M | 50.12M | 261.43M | EBITDA |
| 355.34M | 395.99M | 602.10M | 377.51M | -124.48M | 266.64M | Net Income Common Stockholders |
| -211.12M | -143.75M | 51.39M | -184.10M | -637.42M | -180.54M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.77M | 38.91M | 5.43M | 3.82M | 4.83M | 22.70M | Total Assets |
| 233.40M | 5.02B | 5.46B | 6.07B | 5.95B | 6.50B | Total Debt |
| 87.87M | 2.95B | 2.95B | 3.47B | 3.47B | 3.33B | Net Debt |
| 82.10M | 2.91B | 2.94B | 3.46B | 3.47B | 3.30B | Total Liabilities |
| 196.26M | 4.02B | 4.14B | 4.80B | 4.45B | 4.23B | Stockholders Equity |
| 32.00K | 1.03B | 767.43M | -308.00K | -266.00K | -385.00K |
| Cash Flow | Free Cash Flow | ||||
| 54.31M | 223.87M | 297.42M | 63.49M | 117.19M | -91.66M | Operating Cash Flow |
| 294.67M | 376.16M | 445.19M | 205.85M | 303.99M | 464.06M | Investing Cash Flow |
| -151.51M | -83.76M | 64.19M | -212.41M | -221.49M | -1.44B | Financing Cash Flow |
| -138.22M | -258.93M | -507.76M | 5.55M | -100.38M | 978.83M |
NGL Energy Partners Technical Analysis
Negative
4.54
Price Trends
4.91
Negative
4.80
Negative
4.67
Negative
Market Momentum
-0.07
Negative
39.76
Neutral
38.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NGL, the sentiment is Negative. The current price of 4.54 is below the 20-day moving average (MA) of 4.65, below the 50-day MA of 4.91, and below the 200-day MA of 4.67, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 39.76 is Neutral, neither overbought nor oversold. The STOCH value of 38.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NGL.
NGL Energy Partners Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $623.65M | 6.81 | 19.07% | 5.10% | 15.30% | 11.45% | |
74 Outperform | $548.85M | 4.60 | 18.55% | ― | -16.70% | -8.04% | |
61 Neutral | $548.64M | 6.85 | 8.30% | 12.05% | 30.97% | 281.37% | |
58 Neutral | $9.08B | 5.25 | -7.99% | 7.51% | 0.47% | -64.07% | |
54 Neutral | $674.35M | 5.86 | -14.87% | ― | -6.38% | -104.51% | |
43 Neutral | $599.34M | ― | -19.22% | ― | -19.76% | -323.41% | |
42 Neutral | $654.85M | ― | -89.17% | ― | -2.52% | -450.75% |
* Energy Sector Average
Performance Comparison
NGL
NGL Energy Partners
4.54
-1.24
-21.45%
NBR
Nabors Industries
41.71
-46.39
-52.66%
TK
Teekay
6.57
0.06
0.92%
REPX
Riley Exploration Permian
29.17
-3.07
-9.52%
SMC
Summit Midstream
33.89
5.42
19.04%
BORR
Borr Drilling
2.19
-3.75
-63.13%
NGL Energy Partners Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -17.45% | Next Earnings Date: May 29, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant strategic moves towards asset sales and operational focus on Water Solutions and Crude Oil Logistics segments. However, there were notable financial challenges, particularly in the Liquid Logistics segment and the impact of winding down the biodiesel business. The company's efforts to reduce debt and simplify operations are positive, but financial performance is under pressure from these transitions.Highlights
New Customer Deals on Grand Mesa
NGL Energy Partners entered into a deal with Prairie Operating for a long-term acreage dedication, providing water disposal services and crude oil gathering and shipping on Grand Mesa. Additional contracts were signed, projecting future volume increases to 100,000 barrels per day.
Asset Sales Generating Significant Proceeds
Signed agreements to sell 18 natural gas liquids terminals for approximately $95 million and 143 railcars for $12.5 million, with total expected proceeds of $20 million. This is part of a strategy to reduce debt and simplify the asset base.
Water Solutions Segment Performance
Water Solutions adjusted EBITDA increased to $132.7 million from $121.3 million in the prior year, with disposal volumes up 12%. Operating expenses decreased, with per barrel processed costs dropping from $0.25 to $0.21.
Structural Changes and Debt Reduction
Exiting the biodiesel business reduced working capital needs by $30-$40 million annually and, along with propane business sales, reduced working capital by $60-$70 million. This strategy aims to smooth EBITDA seasonality and reduce debt.
LEX II Project Commencement
The LEX II project began operations in October and is performing as expected, contributing to operational stability.
Lowlights
Decline in Consolidated Adjusted EBITDA
Consolidated adjusted EBITDA decreased to $147.7 million from $151.7 million in the prior year, impacted by a $12.1 million negative contribution from the winding down of the biodiesel business.
Challenges in Liquid Logistics Segment
Liquids Logistics adjusted EBITDA fell to $8.2 million from $26.3 million in the prior year, heavily impacted by the biodiesel wind-down. Excluding biodiesel, the remaining businesses generated $20.3 million.
Grand Mesa Volume Decline
Grand Mesa crude oil logistics fiscal volumes declined to 61,000 barrels per day from 70,000 barrels per day in the prior year.
Biodiesel Business Financial Impact
The biodiesel marketing business generated a negative adjusted EBITDA of $10.3 million year-to-date, with $12.1 million in the third quarter alone.
Company Guidance
During NGL Energy Partners' third-quarter fiscal year 2025 earnings call, several key metrics and strategic updates were highlighted. The company entered into new contracts, projecting volumes on the Grand Mesa pipeline to reach 100,000 barrels per day. They also announced the sale of 18 natural gas liquids terminals for approximately $95 million, aiming to close by March 31, which will reduce working capital needs by $60 to $70 million annually. The winding down of the biodiesel business negatively impacted adjusted EBITDA by $12.1 million, but excluding biodiesel, adjusted EBITDA was $160 million, a 5% increase from the previous year. Water Solutions adjusted EBITDA rose to $132.7 million with disposal volumes increasing by 12% year-over-year. Operating expenses decreased to $0.21 per barrel, down from $0.25. Crude Oil Logistics saw a slight increase in adjusted EBITDA to $17.4 million despite a decrease in Grand Mesa volumes to 61,000 barrels per day. Liquids Logistics faced challenges with a decline in adjusted EBITDA to $8.2 million, excluding biodiesel impacts, the remaining businesses generated $20.3 million. Full-year EBITDA guidance was updated to $620 million, reflecting additional weakness in the liquid segment.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.