A strong stock as of late has been Natural Gas Services (NGS). Shares have been marching higher, with the stock up 11% over the past month. The stock hit a new 52-week high of $31.24 in the previous session. Natural Gas Services has gained 12.7% since the start of the year compared to the 7.8% move for the Zacks Oils-Energy sector and the 6.2% return for the Zacks Oil and Gas - Mechanical and and Equipment industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on November 10, 2025, Natural Gas Services reported EPS of $0.46 versus consensus estimate of $0.33.
For the current fiscal year, Natural Gas Services is expected to post earnings of $1.62 per share on $170.08 in revenues. This represents a 13.29% change in EPS on a 8.51% change in revenues. For the next fiscal year, the company is expected to earn $2.11 per share on $196.07 in revenues. This represents a year-over-year change of 30.25% and 15.28%, respectively.
Valuation Metrics
Natural Gas Services may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Natural Gas Services has a Value Score of B. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 19.1X. On a trailing cash flow basis, the stock currently trades at 7.5X versus its peer group's average of 7.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Natural Gas Services currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Natural Gas Services passes the test. Thus, it seems as though Natural Gas Services shares could have a bit more room to run in the near term.
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Natural Gas Services Group, Inc. (NGS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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