- Needham analyst James Ricchiuti lowered the price target on Montrose Environmental Group Inc MEG to $60 (an upside of 48.7%) from $84 and maintained a Buy rating on the shares after the company reported quarterly results.
- Ricchiuti noted while the CTEH business is expected to return to a more normalized $100 million level in 2022 from about $231 million in 2021, management's 2022 revenue guidance was stronger than anticipated.
- With stronger growth from the base business, favorable government regulatory and other tailwinds, and contributions from M&A, he believes Montrose remains well-positioned for sustained growth.
- Recently, the company reported a Q4 Net Loss of $(1.5) million compared to net income of $0.80 million in 4Q20 and Sales of $143.8 million, an increase of 32.2% year-over-year, beating the consensus of $121.98 million.
- Adjusted EBITDA and Adjusted EBITDA margin were $18.4 million and 12.8% for the quarter, respectively, compared to $18.3 million and 16.8% a year ago.
- Cash flow from operating activities was $37.6 million in FY21, compared to $1.9 million in the prior-year period.
- Montrose had total debt, before debt issuance costs, of $175 million and $271.3 million of liquidity, including $146.3 million of cash and $125 million of availability on its revolving credit facility, as of December 31, 2021.
- FY22 Outlook: Montrose expects revenue of $520 million - $570 million versus the consensus of $451 million and Adjusted EBITDA of $73 million - $78 million.
- Price Action: MEG shares closed lower by 8.30% at $40.45 on Tuesday.
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