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1. Company Snapshot

1.a. Company Description

Montrose Environmental Group, Inc.operates as an environmental services company in the United States.The company operates in three segments: Assessment, Permitting and Response; Measurement and Analysis; and Remediation and Reuse.


The Assessment, Permitting and Response segment provides scientific advisory and consulting services to support environmental assessments, environmental emergency response and recovery, toxicology consulting and environmental audits and permits for current operations, facility upgrades, new projects, decommissioning projects, and development projects.Its technical advisory and consulting services include regulatory compliance support and planning, environmental, and ecosystem and toxicological assessments and support during responses to environmental disruptions.The Measurement and Analysis segment tests and analyzes air, water, and soil to determine concentrations of contaminants, as well as the toxicological impact of contaminants on flora, fauna, and human health.


Its services include source and ambient air testing and monitoring, leak detection, and advanced analytical laboratory services, such as air, storm water, wastewater, and drinking water analysis.The Remediation and Reuse segment provides engineering, design, implementation, and operations and maintenance services primarily to treat contaminated water, remove contaminants from soil, or create biogas from waste.It serves technology, media, chemical, energy, power and utility, industrial and manufacturing, financial, and engineering industries, as well as local, state, provincial, and federal government entities.


The company was founded in 2012 and is headquartered in North Little Rock, Arkansas.

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1.b. Last Insights on MEG

Montrose Environmental Group's recent performance was driven by a series of positive developments. The company's Q1 2025 earnings and revenue beat expectations, with net loss of $19.4 million, or $0.64 net loss per diluted share attributable to common stockholders, and Adjusted Net Income of $5.8 million, or $0.07 Diluted Adjusted Net Income per share. Additionally, the company's Consolidated Adjusted EBITDA reached a record high of $19.0 million, an increase of $2.1 million, or 12.5%. Furthermore, Montrose Environmental Group increased its 2025 Guidance, with expected full year 2025 Consolidated Adjusted EBITDA ranging from $103.0 million to $110.0 million. The company also announced an inaugural stock repurchase program of up to $40.0 million, demonstrating its commitment to returning value to shareholders.

1.c. Company Highlights

2. Montrose Environmental Group's Strong Q3 2025 Results Driven by Broad-Based Client Demand

Montrose Environmental Group reported a significant increase in its third-quarter 2025 revenue, which grew 26% year-over-year to $224.9 million, driven by strong organic growth across all segments. The company's consolidated adjusted EBITDA increased 19% to $33.7 million, or 15% of revenue. The earnings per share (EPS) came in at $0.21, compared to a net loss of $0.27 per share in the prior year period, and beat analyst estimates. Year-to-date revenue rose 26% to $637.3 million, with adjusted EBITDA up 30% to $92.3 million, or 14.5% of revenue. The actual EPS for the quarter was $0.36, surpassing analyst estimates of $0.323.

Publication Date: Nov -25

📋 Highlights
  • Q3 2025 Revenue Growth:: Revenue surged 26% YoY to $224.9M, with year-to-date revenue up 26% to $637.3M.
  • Adjusted EBITDA Expansion:: Consolidated adjusted EBITDA rose 19% to $33.7M (15% margin) in Q3, with 30% YoY growth to $92.3M for the nine months.
  • Segment Performance:: AP&R revenue jumped 75% to $91.1M (22.4% EBITDA margin), while Measurement & Analysis grew 7.5% to $63M with a 27.5% margin (460 bps improvement).
  • Cash Flow Strength:: Operating cash flow improved $65.3M to $55.5M year-to-date, and free cash flow increased $77.4M to $38.8M.

Segment Performance

The Assessment, Permitting and Response (AP&R) segment revenue increased by 75% to $91.1 million, driving a significant portion of the company's revenue growth. The Measurement and Analysis segment revenue rose 7.5% to $63 million, with adjusted EBITDA margin improving by 460 basis points to 27.5%. The Remediation and Reuse segment's revenue increased to $70.8 million, but adjusted EBITDA declined due to losses from winding down the renewables business. As the company mentioned, "the level of cross-selling or recurring revenue associated with these emergency response projects varies depending on the nature of the incident."

Cash Flow and Liquidity

Montrose Environmental Group generated $55.5 million in operating cash flow for the first nine months of 2025, a $65.3 million improvement year-over-year. Free cash flow was $38.8 million, an increase of $77.4 million over the prior year. The company achieved a leverage ratio of 2.7x and had substantial available liquidity of $198.5 million, indicating a strong financial position.

Valuation and Outlook

With a P/E Ratio of -43.14 and an EV/EBITDA of 13.59, the market is pricing in significant growth expectations for Montrose Environmental Group. The company's guidance for 2025 expects revenue of $810 million to $830 million and consolidated adjusted EBITDA of $112 million to $118 million, representing an 18% revenue increase and 20% adjusted EBITDA increase at the midpoint over 2024. Analysts estimate next year's revenue growth at 3.1%, which may be conservative given the company's strong performance and growth prospects. The company's focus on environmental stewardship, innovation, and strategic acquisitions positions it well for long-term shareholder value creation.

3. NewsRoom

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Reviving America's Overlooked Spaces: Montrose Environmental Group Helps Communities Access Over $45 Million in Federal Grants

Dec -01

Source: businesswire.com

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Intech Investment Management LLC Has $350,000 Stock Holdings in Montrose Environmental Group, Inc. $MEG

Dec -01

Source: defenseworld.net

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Reviewing Xylem (NYSE:XYL) and Montrose Environmental Group (NYSE:MEG)

Nov -30

Source: defenseworld.net

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Montrose Environmental Looks Good Despite Recent Price Drop

Nov -30

Source: seekingalpha.com

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Margin Momentum: Why Montrose Environmental's Profitability Gains Are Just The Beginning

Nov -26

Source: seekingalpha.com

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Head to Head Comparison: Montrose Environmental Group (NYSE:MEG) vs. GFL Environmental (NYSE:GFL)

Nov -25

Source: defenseworld.net

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Strathcona Resources: A Special Dividend Is Around The Corner

Nov -20

Source: seekingalpha.com

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Montrose Environmental Group, Inc. (NYSE:MEG) Receives Consensus Rating of “Hold” from Brokerages

Nov -17

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.34%)

6. Segments

Assessment, Permitting and Response

Expected Growth: 7%

Montrose Environmental Group's 7% growth is driven by increasing demand for environmental assessment, permitting, and response services. Key drivers include government regulations, infrastructure development, and industrial expansion, leading to a surge in project-based work. Additionally, the company's strategic acquisitions and organic growth initiatives have enhanced its service offerings, further fueling growth.

Remediation and Reuse

Expected Growth: 9%

Montrose Environmental Group's Remediation and Reuse segment growth is driven by increasing demand for environmental remediation services, government regulations and enforcement, growing need for sustainable reuse of contaminated sites, and strategic acquisitions. Additionally, the company's expertise in emerging contaminants and innovative technologies also contribute to its growth.

Measurement and Analysis

Expected Growth: 6%

Montrose Environmental Group's 6% growth is driven by increasing demand for environmental services, expansion into new markets, and strategic acquisitions. Strong government regulations and growing concerns about environmental sustainability also contribute to growth. Additionally, the company's diversified service offerings and ability to provide comprehensive solutions to clients further support its growth momentum.

7. Detailed Products

Environmental Planning and Permitting

Montrose Environmental Group, Inc. provides environmental planning and permitting services to help clients navigate complex regulatory requirements and obtain necessary permits for their projects.

Air Quality and Climate Change

Montrose Environmental Group, Inc. offers air quality and climate change services, including emissions testing, permitting, and climate change consulting.

Water and Wastewater Services

Montrose Environmental Group, Inc. provides water and wastewater services, including water quality monitoring, wastewater treatment design, and permitting.

Remediation and Brownfields

Montrose Environmental Group, Inc. offers remediation and brownfields services, including site assessment, remediation design, and redevelopment planning.

Ecological Services

Montrose Environmental Group, Inc. provides ecological services, including natural resource surveys, habitat assessments, and wildlife management planning.

Sustainability and ESG

Montrose Environmental Group, Inc. offers sustainability and ESG (Environmental, Social, and Governance) services, including sustainability reporting, ESG consulting, and stakeholder engagement.

8. Montrose Environmental Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Montrose Environmental Group, Inc. is medium due to the availability of alternative environmental services and products.

Bargaining Power Of Customers

The bargaining power of customers for Montrose Environmental Group, Inc. is low due to the company's specialized services and lack of substitutes.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Montrose Environmental Group, Inc. is medium due to the availability of multiple suppliers and the company's moderate bargaining power.

Threat Of New Entrants

The threat of new entrants for Montrose Environmental Group, Inc. is high due to the relatively low barriers to entry and the attractiveness of the environmental services industry.

Intensity Of Rivalry

The intensity of rivalry for Montrose Environmental Group, Inc. is high due to the competitive nature of the environmental services industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 30.73%
Debt Cost 3.95%
Equity Weight 69.27%
Equity Cost 13.48%
WACC 10.55%
Leverage 44.36%

11. Quality Control: Montrose Environmental Group, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Montrose Environmental Group

A-Score: 3.8/10

Value: 5.3

Growth: 4.0

Quality: 3.1

Yield: 0.0

Momentum: 7.5

Volatility: 2.7

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Quality: 6.2

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Value: 9.6

Growth: 3.0

Quality: 3.4

Yield: 0.0

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Perma-Fix Environmental Services

A-Score: 2.7/10

Value: 6.8

Growth: 0.4

Quality: 5.4

Yield: 0.0

Momentum: 1.0

Volatility: 2.3

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A-Score: 2.6/10

Value: 8.0

Growth: 3.6

Quality: 3.8

Yield: 0.0

Momentum: 0.0

Volatility: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.3$

Current Price

26.3$

Potential

-0.00%

Expected Cash-Flows