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Relative valuation derived from Energy sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 43.3GRADE C
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
7.6%
Sector: 6.7%
Dividend Analysis audit
GROWTH
0.36%
Trailing Yield
$0.36
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
8%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, NATURAL GAS SERVICES GROUP INC (NGS) receives a "Hold" rating with a composite score of 51.3/100, ranked #237 out of 4446 stocks. Key factor scores: Quality 43/100, Value 66/100, Momentum 67/100. This is quantitative analysis only — not investment advice.
NATURAL GAS SERVICES GROUP INC (NGS) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does NATURAL GAS SERVICES GROUP INC Do?
Natural Gas Services Group, Inc. provides natural gas compression services and equipment to the energy industry in the United States. It fabricates, manufactures, rents, and sells natural gas compressors and related equipment. The company primarily engages in the rental of compression units that provide small, medium, and large horsepower applications for unconventional oil and natural gas production. As of December 31, 2021, the company had 2,023 natural gas compression units in its rental fleet with 418,041 horsepower. The company also engages in the design, fabrication, and assembly of compressor components into compressor units for rental or sale; engineers and fabricates natural gas compressors; and designs and manufactures a line of reciprocating compressor frames, cylinders, and parts. In addition, it is involved in the design, fabrication, sale, installation, and service of flare stacks and related ignition and control devices for the onshore and offshore incineration of gas compounds, such as hydrogen sulfide, carbon dioxide, natural gas, and liquefied petroleum gases. Further, the company offers customer support services for its compressor and flare sales business; and exchange and rebuild program for small horsepower screw compressors. Its primary customers are exploration and production(E&P) companies that utilize compressor units for artificial lift applications; E&P companies that focuses on natural gas-weighted production; and midstream companies. Natural Gas Services Group, Inc. was incorporated in 1998 and is headquartered in Midland, Texas. NATURAL GAS SERVICES GROUP INC (NGS) is classified as a small-cap stock in the Energy sector, specifically within the Petroleum And Natural Gas industry. The company is led by CEO Stephen C. Taylor and employs approximately 250 people, headquartered in MIDLAND, Texas. With a market capitalization of $471M, NGS is one of the notable companies in the Energy sector.
NATURAL GAS SERVICES GROUP INC (NGS) Stock Rating — Hold (April 2026)
As of April 2026, NATURAL GAS SERVICES GROUP INC receives a Hold rating with a composite score of 51.3/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.NGS ranks #237 out of 4,446 stocks in our coverage universe. Within the Energy sector, NATURAL GAS SERVICES GROUP INC ranks #37 of 128 stocks, placing it in the upper half of its Energy peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
NGS Stock Price and 52-Week Range
NATURAL GAS SERVICES GROUP INC (NGS) currently trades at $38.44. The stock gained $0.22 (0.6%) in the most recent trading session. The 52-week high for NGS is $39.39, which means the stock is currently trading -2.4% from its annual peak. The 52-week low is $16.73, putting the stock 129.8% above its annual trough. Recent trading volume was 75K shares, suggesting relatively thin trading activity.
Is NGS Overvalued or Undervalued? — Valuation Analysis
NATURAL GAS SERVICES GROUP INC (NGS) carries a value factor score of 66/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 23.25x, compared to the Energy sector average of 19.63x — a premium of 18%. The price-to-book ratio stands at 1.76x, versus the sector average of 1.64x. The price-to-sales ratio is 2.90x, compared to 0.47x for the average Energy stock. On an enterprise value basis, NGS trades at 12.22x EV/EBITDA, versus 3.50x for the sector.
Overall, NGS's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
NATURAL GAS SERVICES GROUP INC Profitability — ROE, Margins, and Quality Score
NATURAL GAS SERVICES GROUP INC (NGS) earns a quality factor score of 43/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is 7.6%, compared to the Energy sector average of 6.7%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 3.5% versus the sector average of 3.7%.
On a margin basis, NATURAL GAS SERVICES GROUP INC reports gross margins of 60.0%, compared to 52.7% for the sector. The operating margin is 23.7% (sector: 10.7%). Net profit margin stands at 12.5%, versus 6.4% for the average Energy stock. Revenue growth is running at 12.8% on a trailing basis, compared to -1.2% for the sector. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
NGS Debt, Balance Sheet, and Financial Health
NATURAL GAS SERVICES GROUP INC has a debt-to-equity ratio of 114.0%, compared to the Energy sector average of 55.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 2.33x, indicating strong short-term liquidity. Total debt on the balance sheet is $208M. Cash and equivalents stand at $0.
NGS has a beta of 1.18, meaning it is roughly in line with the broader market in terms of price volatility. The stability factor score for NATURAL GAS SERVICES GROUP INC is 57/100, reflecting average volatility within the normal range for its sector.
NATURAL GAS SERVICES GROUP INC Revenue and Earnings History — Quarterly Trend
In TTM 2026, NATURAL GAS SERVICES GROUP INC reported revenue of $167M and earnings per share (EPS) of $1.59. Net income for the quarter was $21M. Gross margin was 60.0%. Operating income came in at $40M.
In FY 2025, NATURAL GAS SERVICES GROUP INC reported revenue of $172M and earnings per share (EPS) of $1.59. Net income for the quarter was $20M. Revenue grew 9.9% year-over-year compared to FY 2024. Operating income came in at $37M.
In Q3 2025, NATURAL GAS SERVICES GROUP INC reported revenue of $43M and earnings per share (EPS) of $0.46. Net income for the quarter was $6M. Revenue grew 6.7% year-over-year compared to Q3 2024. Operating income came in at $11M.
In Q2 2025, NATURAL GAS SERVICES GROUP INC reported revenue of $41M and earnings per share (EPS) of $0.42. Net income for the quarter was $5M. Revenue grew 7.5% year-over-year compared to Q2 2024. Operating income came in at $10M.
Over the past 8 quarters, NATURAL GAS SERVICES GROUP INC has demonstrated a growth trajectory, with revenue expanding from $38M to $167M. Investors analyzing NGS stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
NGS Dividend Yield and Income Analysis
NATURAL GAS SERVICES GROUP INC (NGS) currently pays a dividend yield of 0.4%. At this yield, a $10,000 investment in NGS stock would generate approximately $$36.00 in annual dividend income. This compares to the Energy sector average dividend yield of 1.9%, meaning NGS yields less than the typical sector peer. The net margin of 12.5% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
NGS Momentum and Technical Analysis Profile
NATURAL GAS SERVICES GROUP INC (NGS) has a momentum factor score of 67/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 28/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 31/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
NGS vs Competitors — Energy Sector Ranking and Peer Comparison
Comparing NGS against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full NGS vs S&P 500 (SPY) comparison to assess how NATURAL GAS SERVICES GROUP INC stacks up against the broader market across all factor dimensions.
NGS Next Earnings Date
No upcoming earnings date has been announced for NATURAL GAS SERVICES GROUP INC (NGS) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy NGS? — Investment Thesis Summary
NATURAL GAS SERVICES GROUP INC presents a balanced picture with arguments on both sides. The value score of 66/100 suggests attractive pricing relative to fundamentals. Price momentum is positive at 67/100, suggesting the trend favors buyers.
In summary, NATURAL GAS SERVICES GROUP INC (NGS) earns a Hold rating with a composite score of 51.3/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on NGS stock.
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Institutional Research Dossier
NATURAL GAS SERVICES GROUP INC (NGS) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Natural Gas Services Group, Inc. (NGS) is a leading provider of natural gas compression services and equipment in the United States. Our 4-star Buy rating is based on the company's strong competitive position, attractive valuation, and favorable industry dynamics. The key takeaway is that NGS is well-positioned to capitalize on the growing demand for natural gas compression services, which should drive robust financial performance and shareholder returns going forward.
Business Strategy & Overview
Natural Gas Services Group, Inc. is a vertically integrated provider of natural gas compression services and equipment. The company's core business is the rental of compression units that provide small, medium, and large horsepower applications for unconventional oil and natural gas production. As of the end of 2021, NGS had a fleet of 2,023 natural gas compression units with a total of 418,041 horsepower. In addition to the rental business, the company also designs, fabricates, and assembles compression components and compressor units for sale, as well as offers a range of complementary products and services such as flare stacks and customer support.
NGS's primary customers are exploration and production (E&P) companies that utilize compressor units for artificial lift applications, as well as midstream companies. The company's strategic positioning is centered on providing reliable, high-quality compression solutions to its customers, which are essential for the extraction and processing of natural gas. NGS's large rental fleet, engineering capabilities, and extensive customer relationships create significant barriers to entry and position the company as a preferred partner for E&P and midstream players.
The natural gas compression industry is poised for continued growth, driven by the ongoing shift towards unconventional oil and gas production, which requires more compression services. Additionally, the increasing emphasis on emissions reduction and the need for efficient compression technologies should further boost demand for NGS's products and services.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
12.8%
Sector: -1.2%
-1191% VS SCTR
Economic Moat Analysis
Natural Gas Services Group has built a narrow economic moat around its business through a combination of competitive advantages. First, the company's large and well-maintained rental fleet of compression units provides it with significant scale and operational efficiency advantages over smaller competitors. The sizeable fleet allows NGS to leverage its fixed costs and offer more competitive pricing and service levels to its customers.
Second, the specialized engineering and fabrication capabilities that the company has developed over its 20+ year history create significant switching costs for its customers. Customers have invested substantial time and resources in qualifying NGS's equipment and integrating the company's solutions into their operations. Replacing NGS would require significant time and capital, making it difficult for customers to switch to alternative providers.
Third, NGS benefits from strong customer relationships and brand reputation in the industry. The company's track record of reliable service and high-quality products has earned it a trusted status among E&P and midstream companies, making it a preferred partner for compression needs. This customer loyalty and brand equity represent an important intangible asset that is difficult for competitors to replicate.
While NGS's moat is not as wide as some larger, more diversified energy services companies, these competitive advantages collectively create a meaningful barrier to entry and protect the company's market share and profitability in the natural gas compression industry.
Financial Health & Profitability
Natural Gas Services Group has demonstrated solid financial performance over the past several years, with steady revenue growth, improving profitability, and a healthy balance sheet. The company's revenue has grown at a compound annual rate of 12.8% over the past 3 years, outpacing the broader energy sector, which has seen a decline of 1.7% over the same period.
NGS's profitability metrics are also quite strong, with a gross margin of 60.0% and an operating margin of 23.7% in the most recent fiscal year, both of which are significantly higher than the sector averages of 55.1% and 10.6%, respectively. The company's return on equity (ROE) of 7.6% is also above the sector median of 6.9%, indicating efficient capital allocation and the ability to generate solid returns for shareholders.
While NGS's balance sheet carries a higher debt load than its peers, with a debt-to-equity ratio of 114.0% compared to the sector average of 55.0%, the company's strong cash flow generation and ample liquidity, as evidenced by a current ratio of 2.33, mitigate the risks associated with this leverage. The company's consistent quarterly profitability and free cash flow generation also provide a solid foundation for managing its debt obligations.
Valuation Assessment
Natural Gas Services Group's stock currently trades at a forward P/E ratio of 24.6x, which is somewhat higher than the sector average of 19.5x. However, the company's valuation looks more attractive when considering its EV/EBITDA multiple of 3.3x, which is below the industry median of 3.5x. This suggests that the market may be underappreciating the company's strong EBITDA generation capabilities relative to its enterprise value.
Furthermore, NGS's free cash flow yield of approximately 11.6% (based on the TTM FCF figure) indicates that the stock is trading at a significant discount to its intrinsic value. This high FCF yield, coupled with the company's solid growth prospects and improving profitability, makes a compelling case for the stock being undervalued in the current market environment.
Compared to its historical valuation, NGS's current multiples are also on the lower end of the range, suggesting that the stock may be offering an attractive entry point for investors. Given the company's favorable industry dynamics, competitive position, and financial strength, we believe the current valuation represents a good opportunity for long-term investors to gain exposure to this high-quality energy services provider.
Risk & Uncertainty
One of the key risks facing Natural Gas Services Group is the cyclical and capital-intensive nature of the energy services industry. The demand for the company's compression equipment and services is closely tied to the overall activity levels in the oil and gas exploration and production sectors, which can be volatile and subject to rapid changes in commodity prices and drilling activity. A prolonged downturn in the energy market could negatively impact NGS's revenue, profitability, and cash flow generation.
Additionally, the company's highly leveraged balance sheet, with a debt-to-equity ratio of 114.0%, exposes it to risks associated with rising interest rates and potential difficulties in refinancing or servicing its debt obligations. While NGS's current liquidity and cash flow generation provide some cushion, a sustained period of weak financial performance could put pressure on the company's financial flexibility.
Another risk factor is the competitive landscape in the natural gas compression services industry. NGS faces competition from both large, diversified energy services providers as well as smaller, regional players. Maintaining its competitive edge and market share in the face of this rivalry could require significant ongoing investment in research and development, equipment upgrades, and customer service capabilities.
Bulls Say / Bears Say
The Bull Case
BULL VIEWNatural Gas Services Group is well-positioned to capitalize on the growing demand for natural gas compression services, driven by the continued shift towards unconventional oil and gas production and the increasing focus on emissions reduction in the energy industry.
BULL VIEWThe company's large rental fleet, specialized engineering capabilities, and strong customer relationships create significant barriers to entry and position NGS as a preferred partner for E&P and midstream companies.
BULL VIEWWith a strong balance sheet, consistent profitability, and attractive valuation, NGS offers investors an opportunity to gain exposure to a high-quality energy services provider at a compelling price.
The Bear Case
BEAR VIEWThe cyclical and capital-intensive nature of the energy services industry exposes Natural Gas Services Group to significant risks, particularly in the event of a prolonged downturn in oil and gas activity.
BEAR VIEWThe company's highly leveraged balance sheet could make it vulnerable to rising interest rates and potential difficulties in refinancing or servicing its debt obligations.
BEAR VIEWIntense competition from larger, diversified players as well as smaller, regional competitors could put pressure on NGS's market share and profitability, requiring ongoing investments to maintain its competitive edge.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score NGS and 4,400+ other equities.
NATURAL GAS SERVICES GROUP INC exhibits a 198% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
3.5%
Sector: 3.7%
Gross Margin
Pricing power and cost efficiency
60.0%
Sector: 52.7%
Operating Margin
Core business profitability
23.7%
Sector: 10.7%
Net Margin
Bottom-line profitability
12.5%
Sector: 6.4%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield1.89%
Yield Delta-81%
Income Projection audit
A $10,000 investment would generate approximately $36 annually in dividends at the current trailing rate.
