Montrose has gotten torched over the last six months - since July 2024, its stock price has dropped 54.4% to $18.29 per share. This may have investors wondering how to approach the situation.
Given the weaker price action, is now a good time to buy MEG? Find out in our full research report, it’s free.
Why Does Montrose Spark Debate?
Founded to protect a tree-lined two-lane road, Montrose (NYSE:MEG) provides air quality monitoring, environmental laboratory testing, compliance, and environmental consulting services.
Two Things to Like:
1. Skyrocketing Revenue Shows Strong Momentum
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Montrose grew its sales at an incredible 25.4% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers. 
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Montrose’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.
One Reason to be Careful:
Core Business Falling Behind as Demand Plateaus
Investors interested in Waste Management companies should track organic revenue in addition to reported revenue. This metric gives visibility into Montrose’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.
Over the last two years, Montrose failed to grow its organic revenue. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Montrose might have to lean into acquisitions to accelerate growth, which isn’t ideal because M&A can be expensive and risky (integrations often disrupt focus). 
Final Judgment
Montrose has huge potential even though it has some open questions. After the recent drawdown, the stock trades at 19.5× forward price-to-earnings (or $18.29 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More Than Montrose
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