Montrose Environmental Group Inc (MEG, Financial) has recently experienced a notable uptick in its stock performance. With a current market capitalization of $1.25 billion, the company's shares are trading at $41.12. Over the past week, MEG has seen a 4.51% gain, while the past three months have been even more impressive, with a 22.63% increase in stock price. This growth trajectory is particularly interesting when considering the company's valuation metrics. The GF Value is currently at $47.97, down slightly from the past GF Value of $48.85. Despite this slight decrease, MEG is currently considered modestly undervalued, a positive shift from its previous assessment as a possible value trap where investors were advised to think twice before investing.
Understanding Montrose Environmental Group Inc
Montrose Environmental Group Inc operates within the waste management industry, providing a range of environmental services. The company's business segments include Assessment, Permitting and Response, Measurement and Analysis, and Remediation and Reuse. These services encompass environmental assessments, emergency response, audits, and treatment of contaminants. MEG's expertise in air, water, and soil testing and analysis, as well as its ability to design and implement solutions for contaminated water and biogas creation, positions it as a comprehensive provider in the environmental services sector. The majority of the company's revenue is generated within the United States.
Profitability Analysis
MEG's profitability metrics present a mixed picture. The company's Profitability Rank stands at 4/10, indicating challenges in this area. The Operating Margin is currently at -4.54%, which, while not ideal, is better than 22.32% of 233 companies in the same industry. The ROE (Return on Equity) is at -6.60%, surpassing 21.7% of its peers. Similarly, the ROA (Return on Assets) and ROIC (Return on Invested Capital) are at -3.81% and -3.91% respectively, each outperforming just over 21% of competitors. These figures suggest that while MEG is not leading the pack in profitability, it is maintaining a competitive stance within its industry.
Growth Prospects and Challenges
When it comes to growth, MEG's performance is somewhat dichotomous. The company's Growth Rank is low at 2/10. However, the 3-Year Revenue Growth Rate per Share is 1.40%, which is better than 33.5% of 206 companies in the industry. The 5-Year Revenue Growth Rate per Share is more robust at 17.60%, outperforming 81.03% of its peers. The 3-Year EPS without NRI Growth Rate is an impressive 35.70%, better than 83.63% of the industry. In contrast, the 5-Year EPS without NRI Growth Rate is -8.70%, which is only better than 13.39% of the industry. These figures indicate that while MEG has shown strong growth in certain areas, it faces challenges in maintaining consistent long-term earnings growth.
Shareholder Influence and Expectations
Significant shareholders in MEG include Ron Baron (Trades, Portfolio), holding 1,051,494 shares (3.48%), Chuck Royce (Trades, Portfolio) with 219,258 shares (0.73%), and Ken Fisher (Trades, Portfolio) owning 160,654 shares (0.53%). The involvement of these notable investors suggests confidence in the company's potential and may influence its strategic direction and investor expectations.
Competitive Landscape
MEG's competitors in the waste management industry include LanzaTech Global Inc (LNZA, Financial) with a market cap of $590.029 million, Enviri Corp (NVRI, Financial) at $684.584 million, and Ambipar Emergency Response (AMBI, Financial) with a market cap of $288.790 million. These companies represent the competitive environment in which MEG operates, and their respective market caps reflect the varying scales and market positions within the industry.
Conclusion
In summary, Montrose Environmental Group Inc has demonstrated a strong stock performance with a 22.63% gain over the past three months, and it is currently considered modestly undervalued according to GF Value. While the company's profitability metrics are not leading the industry, they are competitive, and its growth in certain areas is notable. The presence of significant shareholders like Ron Baron (Trades, Portfolio), Chuck Royce (Trades, Portfolio), and Ken Fisher (Trades, Portfolio) may bode well for the company's future. Finally, when compared to its competitors, MEG holds a solid position within the waste management industry, suggesting potential for continued growth and investment opportunities.
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.
