Summit Midstream (SMC) AI Stock Analysis

306 Followers

Top Page

Summit Midstream

(NYSE:SMC)

52Neutral

Summit Midstream's stock score is primarily influenced by its mixed financial performance, with significant improvements in debt reduction but challenges in maintaining consistent profitability. Technical analysis indicates a potential bearish trend, and valuation metrics show limited attractiveness due to a negative P/E ratio. However, strategic achievements and positive guidance from the earnings call provide a more optimistic outlook, balancing some of the financial and technical weaknesses.

Summit Midstream (SMC) vs. S&P 500 (SPY)

Market Cap

$495.60M

Dividend YieldN/A

Average Volume (3M)147.17K

Price to Earnings (P/E)5.9

Beta (1Y)1.06

Revenue Growth-6.38%

EPS Growth-104.51%

CountryUS

Employees272

SectorEnergy

Sector Strength45

IndustryOil & Gas Midstream

Share Statistics

EPS (TTM)-13.08

Shares Outstanding12,241,098

10 Day Avg. Volume221,747

30 Day Avg. Volume147,170

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.82

Price to Cash Flow (P/CF)-7.60

P/FCF Ratio5.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Summit Midstream Business Overview & Revenue Model

Company DescriptionSummit Midstream Partners, LP (SMC) is a leading energy infrastructure company focused on owning, developing, and operating midstream energy assets in unconventional resource basins across North America. The company primarily provides natural gas, crude oil, and produced water gathering, treating, and processing services. Summit Midstream serves a diverse group of customers in the energy sector, including major oil and gas producers, and is known for its extensive network of pipelines and strategic locations that facilitate efficient energy transportation and storage.

How the Company Makes MoneySummit Midstream makes money through a fee-based revenue model primarily by providing essential midstream services to oil and gas producers. Its key revenue streams include gathering and processing fees for transporting and treating natural gas and crude oil, as well as produced water handling. The company's financial performance is supported by long-term contracts with take-or-pay provisions, which ensure stable cash flows regardless of fluctuations in energy production volumes. Additionally, strategic partnerships and joint ventures enhance Summit Midstream's ability to expand its infrastructure network and capture new business opportunities in the energy sector.

Summit Midstream Financial Statement Overview

Summary

Summit Midstream shows mixed financial health. Revenue and profit margins have fluctuated with operational challenges. The balance sheet improved through debt reduction, yet stability risks remain. Cash flow indicates efficiency but inconsistent profitability.

Income Statement

Neutral

Summit Midstream's revenue has fluctuated over the years, showing a decline from 2023 to 2024. Despite the gross profit margin improving in 2024, the net profit margin remains negative, highlighting operational challenges. EBIT and EBITDA margins are also negative, indicating potential inefficiencies in cost management.

Balance Sheet

Neutral

The balance sheet shows a significant improvement in equity from negative in 2020 to positive in 2024, attributed to the elimination of total debt. The debt-to-equity ratio has improved, but stockholders' equity as a percentage of total assets decreased, reflecting potential stability risks.

Cash Flow

Neutral

Operating cash flow remained positive, but free cash flow growth has been inconsistent. The company has managed to maintain a positive operating cash flow to net income ratio, suggesting efficient cash operations despite ongoing net losses.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
429.62M	458.90M	369.59M	400.62M	383.47M
	Gross Profit
297.69M	122.94M	89.56M	125.39M	142.66M
	EBIT
-41.94M	80.80M	44.61M	66.62M	69.27M
	EBITDA
250.53M	193.32M	81.88M	158.00M	188.34M
	Net Income Common Stockholders
-113.17M	-38.95M	-123.46M	-19.95M	192.35M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
22.82M	14.04M	11.81M	7.35M	15.54M
	Total Assets
2.36B	2.49B	2.56B	2.52B	2.50B
	Total Debt
993.58M	1.47B	1.49B	1.36B	1.35B
	Net Debt
-22.82M	1.46B	1.48B	1.35B	1.33B
	Total Liabilities
1.39B	1.65B	1.80B	1.62B	1.58B
	Stockholders Equity
467.79M	718.56M	764.82M	904.36M	-186.07M
Cash Flow		Free Cash Flow
8.16M	58.00M	68.27M	140.07M	155.46M
	Operating Cash Flow
61.77M	126.91M	98.74M	165.10M	198.59M
	Investing Cash Flow
487.06M	-74.76M	-226.56M	-165.73M	-140.57M
	Financing Cash Flow
-540.28M	-49.04M	121.77M	4.66M	-79.40M

Summit Midstream Technical Analysis

Technical Analysis Sentiment

Negative

Last Price26.41

Price Trends

50DMA

38.52

Negative

100DMA

38.12

Negative

200DMA

36.99

Negative

Market Momentum

MACD

-1.86

Positive

RSI

25.83

Positive

STOCH

7.96

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SMC, the sentiment is Negative. The current price of 26.41 is below the 20-day moving average (MA) of 33.33, below the 50-day MA of 38.52, and below the 200-day MA of 36.99, indicating a bearish trend. The MACD of -1.86 indicates Positive momentum. The RSI at 25.83 is Positive, neither overbought nor oversold. The STOCH value of 7.96 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SMC.

Summit Midstream Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MPLX	85 Outperform	$48.48B	11.26	31.78%	7.62%	4.30%	10.45%
WES	80 Outperform	$13.69B	8.93	50.12%	9.75%	16.06%	54.94%
ET	77 Outperform	$54.59B	12.39	13.40%	7.87%	5.20%	18.35%
OKE	66 Neutral	$50.74B	15.70	18.11%	4.92%	24.16%	-6.58%
Sector *	57 Neutral	$7.44B	4.21	-3.75%	6.64%	-0.07%	-64.77%
SMC	52 Neutral	$495.60M	5.86	-14.87%	―	-6.38%	-104.51%

* Energy Sector Average

Performance Comparison

SMC

Summit Midstream

26.41

-1.83

-6.48%

Energy Transfer

16.33

2.19

15.49%

OKE

Oneok

82.56

8.14

10.94%

WES

Western Midstream Partners

36.65

5.39

17.24%

MPLX

48.19

11.40

30.99%

Summit Midstream Earnings Call Summary

Earnings Call Date: Mar 10, 2025 | % Change Since: -31.77% | Next Earnings Date: May 2, 2025

Earnings Call Sentiment Positive

The call highlighted significant strategic achievements, including successful divestitures and acquisitions, strong financial performance, and a positive outlook for 2025. However, there were notable challenges, such as a net loss in the fourth quarter and volume declines in several segments. Despite these challenges, the strategic wins and positive guidance support a generally optimistic view.

Highlights

Successful Strategic Transactions

Summit Midstream Corp. divested the Northeast segment for $700 million, reducing leverage from 5.4 times to 3.9 times and increasing the unit price from $17 to nearly $30. The company also refinanced the balance sheet, increasing financial flexibility and reducing interest expenses.

Record Share Price Growth

The execution of strategic plans resulted in more than doubling the share price by the end of 2024.

Strong Financial Performance

Full year 2024 adjusted EBITDA was $204.6 million, generating more than $85 million of distributable cash flow.

Acquisition and Expansion

Acquired Tallahok Midstream and Moonrise Midstream, expanding exposure to natural gas-oriented basins and increasing processing capacity in the DJ Basin.

Positive Outlook for 2025

Full year 2025 adjusted EBITDA guidance of $245 to $280 million, and expected significant free cash flow generation with over $100 million available for debt paydown.

Reinstatement of Preferred Dividend

Plans to reinstate the cash dividend on the corporate series A preferred beginning March 15, 2025.

Lowlights

Net Loss in Fourth Quarter

Reported a net loss of $24.8 million in the fourth quarter of 2024.

Challenges in the Rockies Segment

Adjusted EBITDA decreased by $1.6 million due to a 3% decline in liquids volumes from natural production declines.

Permian Basin Volume Decline

Decrease in adjusted EBITDA by $0.7 million due to lower volume throughput.

Peon Segment Volume Decline

Reported a decline due to a 2.5% decrease in volume throughput.

Company Guidance

During the fourth quarter 2024 earnings call, Summit Midstream Corp. provided guidance for 2025, anticipating adjusted EBITDA to range from $245 to $280 million, inclusive of the recent Moonrise acquisition. The company expects to connect 125 to 185 wells in 2025, with a capital expenditure budget set between $65 million and $75 million, including $15 million to $20 million for maintenance. The guidance reflects a potential 30% reduction in planned well connections due to timing risks, primarily affecting the third and fourth quarters. Summit Midstream aims to generate over $100 million in free cash flow, targeting a reduction in leverage to 3.5 times, and plans to use this cash flow for debt repayment. The company highlighted significant operational achievements in 2024, including doubling its share price and executing strategic acquisitions, which have bolstered its position in high-growth natural gas-oriented basins.

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.