Natural Gas Services Group

NGS

Oil & Gas Equipment & Services · Energy

Price

$38.77

-0.84 (-2.12%)

Market Cap

$489.8M

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count falling — buybacks

−3.1% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 13.1M (2021) → 12.7M (2025)

Natural Gas Services Group rents large compressor machines to oil and gas companies in the United States. These compressors help push natural gas through pipelines and out of wells, especially in shale fields like the Permian Basin and Appalachia. The company does not sell the equipment — it owns the machines and leases them to energy producers who need compression power on their well sites.

Revenue comes almost entirely from monthly rental fees on its fleet of compressors, which creates steady, recurring income. The company operates exclusively in the U.S. and, with a market cap around $500 million, is a smaller player in the compression services industry alongside larger rivals like USA Compression and Archrock. Its competitive edge comes from focusing on high-horsepower equipment, which is in growing demand as wells get deeper and more complex. The main risk is that a drop in natural gas drilling activity could reduce demand for rentals and leave compressors sitting idle.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+17.1% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+38.5% YoY

YoY Growth Rate

Strong earnings growth

R&D Spend

$0/ year

0.0% of revenue

Below sector average (1%)

Research and development spending

Insider Activity

7.9%ownership

Insiders own a meaningful stake in the company

Cash Position

Cash flow positive

$2M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Natural Gas Services Group is a rare growth stock that's already generating positive cash flow while growing at 17%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

41.1%

Healthy — 41.1% gross margin

Operating Margin

27.7%

Excellent — 27.7% operating margin

ROCE

2.6%

Weak — 2.6% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+11.3%

Steady sales growth (11.3% YoY)

EPS YoY

+28.7%

Earnings growing fast (28.7% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

290%

Turns 290% of profit into real cash

FCF Margin

-31.8%

Burning cash (-31.8%)

Free cash flow is negative. They are burning cash, not generating it.

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Stability

Debt / Equity

0.81

Moderate — manageable debt (0.81)

Interest Cover

3.09x

Tight — interest eats into profit (3.1x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)

22.2x

Growth-priced — P/E 22.2

P/E above the market average. People are paying up for expected growth.

P/E vs Forward

+3.3

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (22.2 → 18.8)

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Dividends

Dividend Yield

1.21%

Small dividend — 1.21% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth

N/A

no trend

Data not available

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