Montrose Environmental Group Inc (MEG, Financial) has experienced a notable fluctuation in its stock price recently. With a current market capitalization of $1.18 billion, the company's shares are trading at $38.76. Over the past week, MEG's stock has seen a slight decline of 1.45%. However, looking at a broader timeframe, the stock has gained an impressive 17.87% over the past three months. This performance is particularly interesting when considering the company's valuation metrics. According to GF Value, the stock is currently modestly undervalued at a GF Value of $47.93, down slightly from a past GF Value of $48.16. This marks a shift from a previous assessment of being a possible value trap to a more favorable investment opportunity.
Company Overview
Montrose Environmental Group Inc operates within the waste management industry, providing a range of environmental services. The company's segments include Assessment, Permitting and Response, Measurement and Analysis, and Remediation and Reuse. These services encompass environmental assessments, emergency response, audits, testing, analysis, and remediation, with a significant portion of revenue generated from the United States. The company's commitment to environmental stewardship and its comprehensive service offerings position it as a key player in the industry.
Profitability Analysis
MEG's Profitability Rank stands at 4/10, indicating challenges in maintaining consistent profitability. The company's operating margin is currently at -4.54%, which is better than 22.46% of its industry peers. In terms of return on equity (ROE), MEG has a rate of -6.60%, surpassing 23.21% of competitors. The return on assets (ROA) is -3.81%, and the return on invested capital (ROIC) is -3.91%, each outperforming over 20% of industry peers. These figures suggest that while Montrose Environmental Group is not leading the industry in profitability, it is managing to stay ahead of a significant portion of its competitors.
Growth Prospects
The company's Growth Rank is also positioned at 4/10. MEG's 3-Year Revenue Growth Rate per Share is 1.40%, which is better than 34.31% of industry peers. The 5-Year Revenue Growth Rate per Share is more impressive at 17.60%, outperforming 82.18% of competitors. The 3-Year EPS without NRI Growth Rate stands at a robust 35.70%, better than 84.52% of industry peers. However, the 5-Year EPS without NRI Growth Rate is -8.70%, which is still better than 13.39% of industry peers. These mixed growth indicators suggest that while Montrose Environmental Group has shown strong growth in certain areas, it has also faced challenges in others.
Investor Holdings
Notable investors have taken an interest in MEG, with Ron Baron (Trades, Portfolio) holding 1,051,494 shares, representing a 3.48% share percentage. Chuck Royce (Trades, Portfolio) owns 219,258 shares, accounting for 0.73% of shares, and Ken Fisher (Trades, Portfolio) holds 160,654 shares, or 0.53%. These significant shareholders reflect a level of confidence in the company's potential and strategic direction.
Competitive Landscape
When compared to its competitors, Montrose Environmental Group stands out with its market cap of $1.18 billion. LanzaTech Global Inc (LNZA, Financial) has a market cap of $617.457 million, Enviri Corp (NVRI, Financial) is valued at $661.033 million, and Ambipar Emergency Response (AMBI, Financial) has a market cap of $325.928 million. These figures highlight MEG's relatively larger scale within the waste management industry.
Conclusion
In summary, Montrose Environmental Group Inc's stock performance has been a mixed bag, with a recent modest decline but a significant gain over the past three months. The company's current valuation suggests it is modestly undervalued, offering potential for investors. While profitability remains a challenge, the company's growth in certain metrics is commendable. Significant shareholders maintain a stake in MEG, indicating investor confidence. Finally, when compared to its competitors, Montrose Environmental Group holds a stronger market position, which could bode well for its future performance in the waste management sector.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
