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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2225
Positioning
Market Dominance
Services
Business Services
$969M
Vijay Manthripragada
Montrose Environmental Group, Inc. operates in three segments: Assessment, Permitting and Response; Measurement and Analysis; and Remediation and Reuse. The company provides engineering, design, implementation, and operations and maintenance services. It serves technology, media, chemical, energy, power and utility, industrial and manufacturing, financial, and engineering industries.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = MEG ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$YALA Yalla Group Ltd | 75 | 89 | 99 | 80 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$GRVY GRAVITY Co., Ltd. | 75 | 82 | 96 | 71 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ISSC INNOVATIVE SOLUTIONS & SUPPORT INC | 73 | 81 | 88 | 94 | 25.0x | 14.1x | 17.1% | 10.3% | 35.5% | 14.6% | 10.1% | 105.2% | 0.0% | 41.0x | $244M | VS | |
$AER AerCap Holdings N.V. | 72 | 60 | 87 | 84 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$HCSG HEALTHCARE SERVICES GROUP INC | 72 | 74 | 88 | 88 | 7.1x | 6.1x | 28.9% | 20.8% | 20.8% | 9.9% | 9.3% | 8.5% | 0.0% | 1.0x | $1.2B | VS | |
$LQDT LIQUIDITY SERVICES INC | 72 | 90 | 88 | 68 | 24.9x | 14.3x | 14.1% | 8.3% | 45.7% | 8.5% | 6.2% | 28.1% | 0.0% | 0.0x | $736M | VS | |
$TRTNpA Triton International Ltd | 71 | 70 | 89 | 70 | - | 1.7x | 0.0% | - | 97.4% | 58.0% | 37.4% | - | 8.8% | 264.0x | $2.5B | VS | |
$EDU New Oriental Education & Technology Group Inc. | 71 | 83 | 52 | 77 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$NTES NetEase, Inc. | 71 | 88 | 93 | 68 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$UTI UNIVERSAL TECHNICAL INSTITUTE INC | 70 | 86 | 86 | 72 | 43.2x | 16.0x | 15.3% | 5.8% | 100.0% | 6.9% | 5.2% | 15.1% | 0.0% | 24.0x | $1.8B | VS | |
$MEG Montrose Environmental Group, Inc. | 49 | 45 | 62 | 63 | 92.8x | 12.5x | -0.7% | -0.3% | 40.7% | 1.0% | -1.3% | 29.8% | 0.0% | 115.0x | $969M | ||
| SECTOR BENCH | - | - | - | - | - | 23.7x | 11.7x | 5.7% | 2.4% | 64.6% | 4.5% | 2.8% | 8.6% | 0.0% | 0.3x | - | REF |
Montrose Environmental Group, Inc. (MEG) receives a "Reduce" rating with a composite score of 48.7/100. It ranks #2225 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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Outperforming peers — winners tend to keep winning over 3-12 months
Trading at a discount to fundamentals — favorable entry valuation
Average quality profile
Average volatility — neutral timing signal
Moderate investment profile
Mid-range overall rating
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Relative valuation derived from Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for MEG.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 45 | 45 | 0NEUTRAL |
| MOMENTUM | 63 | 69 | -6DRAG |
| VALUATION | 62 | 70 | -8DRAG |
| INVESTMENT | 38 | 65 | -27DRAG |
| STABILITY | 39 | 35 | +4NEUTRAL |
| SHORT INT | 38 | 29 | +9ALPHA |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 1.5% vs WACC 7.2% (spread -5.6%)
GM 41% vs sector 65%, OM 1% vs sector 5%
Capital turnover 0.70x
Rev growth 30%, 6yr history
Interest coverage 2.0x, Net debt/EBITDA 14.1x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate Montrose Environmental Group, Inc. (MEG) as a Reduce with a composite score of 48.7/100 at a current price of $22.62. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
Montrose Environmental Group, Inc. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 48.7/100 places it at rank #2225 in our full universe.
The near-term outlook is constructive, with revenue growing at 30% and momentum in the 63th percentile confirming positive market sentiment. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy.
No Moat
Very High
Poor
Undervalued
Gross margins of 41% signal strong pricing power.
Stable competitive position in a defensive sector.
Elevated P/E ratio of 92.8x leaves little room for execution misses.
Leverage of 115% D/E amplifies downside risk.
Vulnerability to macroeconomic shocks and interest rate volatility.
Montrose Environmental Group, Inc. represents a reduce based on multi-factor quantitative performance.
Montrose Environmental Group, Inc. receives a Reduce rating from our analysis, with a composite score of 48.7/100 and 2 out of 5 stars, ranking #2225 out of 7,333 stocks. MEG's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
With a quality score of 45/100, MEG shows adequate but unremarkable business quality. The company reports a return on equity of -0.7% (sector avg: 5.7%), gross margins of 40.7% (sector avg: 64.6%), net margins of -1.3% (sector avg: 2.8%). This suggests the company generates acceptable returns but may lack the competitive positioning or operational efficiency to stand out from peers.
MEG's value score of 62/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 92.83x, an EV/EBITDA of 12.48x, a P/B ratio of 1.78x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
Montrose Environmental Group, Inc.'s investment score of 38/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 29.8% vs. a sector average of 8.6% and a return on assets of -0.3% (sector: 2.4%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
MEG demonstrates moderate momentum with a score of 63/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at 29.8% year-over-year, while a beta of 1.44 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
MEG's stability score of 39/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 1.44 and a debt-to-equity ratio of 115.00x (sector avg: 0.3x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
Montrose Environmental Group, Inc.'s short interest score of 38/100 reveals significant bearish positioning, suggesting institutional investors are actively betting against the stock. Specific risk factors include above-average market sensitivity (beta: 1.44), elevated leverage (D/E: 115.00x), small-cap liquidity risk. At $969M (small-cap), MEG carries meaningful risk and is best suited for investors with high risk tolerance who have thoroughly evaluated the bear thesis.
Montrose Environmental Group, Inc. is a small-cap company in the Services sector, ranked #0 of 50 in its sector (100th percentile) and #2225 of 7,333 overall (70th percentile). Key comparisons include ROE of -0.7% trailing the 5.7% sector median and operating margins of 1.0% below the 4.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Services peers.
While MEG currently exhibits a REDUCE profile, superior opportunities exist within the SERVICES sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Investment (38) would have the largest impact on the composite score.
EV/EBITDA 6% ABOVE SECTOR MEDIAN
ROE 112% BELOW SECTOR MEDIAN
Gross Margin 37% BELOW SECTOR MEDIAN
Above 50MA
37.18%
Net New Highs
+51081
Montrose Environmental Group (MEG) is anticipated to report zero year-over-year revenue growth for Q4 2025, following a strong prior quarter where it exceeded revenue expectations by 25.9%. This forecast indicates a significant slowdown compared to the 14.1% increase in the equivalent quarter last year. Competitors in the waste management sector, Waste Connections and Casella Waste Systems, reported revenue increases in line with forecasts, though their share prices declined post-earnings, while Montrose's shares also fell by 4.3% in the last month despite a positive overall market sentiment in the sector.
Several stocks, including Montrose Environmental Group, Titan International, Enpro, Oshkosh, and VSE Corporation, saw significant jumps after a broader market rebound. This rally was driven by a recovery in technology stocks, a stabilization in Bitcoin, improved U.S. consumer sentiment, and increased investor confidence in chipmakers benefiting from AI-related capital expenditure. The Dow Jones Industrial Average also crossed the 50,000 threshold for the first time.
Montrose Environmental Group Inc. has sold its Danish water treatment subsidiary, Montrose Environmental Group Denmark, to Swedish cleantech firm Chromafora. As part of the deal, Montrose became an investor in Chromafora and its subsidiary ECT2 will license proprietary PFAS treatment technology to Chromafora for expansion across Europe. This transaction highlights Montrose's strategy of growth through acquisitions and partnerships, following a strong third quarter in 2025.
Flerie's portfolio company, Chromafora, has acquired Montrose Environmental Group Denmark. This news was reported by Reuters and involves Swedish and Danish stocks, falling under mergers and acquisitions.
Flerie AB's portfolio company Chromafora has acquired Montrose Environmental Group Denmark, a specialist in PFAS treatment. This acquisition significantly strengthens Chromafora's capabilities in treating PFAS-contaminated water, especially complementing its existing Selpaxt technology with Montrose's expertise in long-chain PFAS. As part of the deal, Montrose Environmental Group, Inc. becomes a strategic investor and shareholder in Chromafora, aiming for increased growth and synergies.