Montrose 4Q Revenues Soar 60%, Top Estimates


Montrose Environmental Group reported 4Q revenues that fared better than analysts’ expectations, thanks to increased demand for its environmental solutions.

Montrose Environmental’s (MEG) revenues jumped 60.2% year-over-year to $108.7 million in 4Q and surpassed the Street’s expectations of $86.5 million amid strong demand.

The company’s CEO Vijay Manthripragada said, “Fourth quarter and full year results were terrific, reflecting the resiliency in our diversified business and growing demand for our innovative environmental solutions.”

Net income of $0.8 million compared favorably to the net loss of $11.3 million in the year-ago period. The year-over-year improvement reflects higher revenues and an increase in adjusted EBITDA.

Adjusted EBITDA rose 74.3% year-over-year, while adjusted EBITDA margin improved 130 basis points to 16.8% in 4Q. (See Montrose Environmental stock analysis on TipRanks)

As for 2021, the company expects adjusted EBITDA to grow in the range of $61 million to $67 million and anticipates year-over-year revenue growth of about 20% at the mid-point.

Following the results, Needham analyst James Ricchiuti said, “MEG’s M&A pipeline remains healthy, which provides upside to our 2021 and newly introduced 2022 estimates. We regard MEG as a unique growth story in the large environmental services industry.”

Ricchiuti raised the stock’s price target to $50 (26.2% upside potential) from $35 and maintained a Buy rating. Shares gained by over 80% since the company listed on the NYSE on July 23, 2020.

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