Value
8.3/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 9.9 |
| EV/EBITDA | 6.1 |
| Fwd P/E | 7.0 |
| PEG | 10.0 |
- ▸Forward P/E: 17.9x
- ▸PEG: 0.14
- ▸Attractively valued
NGL · Why this verdict
Why NGL ENERGY PARTNERS (NGL) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.8/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
NGL Energy Partners reported a 13% revenue decline year-over-year and a quality score of 2.5 that falls well below the minimum investment threshold of 4.0, reflecting structural weakness in the midstream business without a competitive moat. Quality breakdown | Revenue stabilizes and returns to flat or positive growth while quality score improves above 4.0 within 12 months. | →Stable |
| CounterMidstream MLPs often show revenue volatility tied to commodity throughput volumes rather than structural business deterioration, and distribution coverage may remain stable despite headline revenue weakness. | ||
In the most recent reported quarter, NGL delivered an EPS of -$3.44 against a consensus estimate of $0.18, representing a -2011% miss that strongly suggests a non-recurring but materially negative event impacted financial results. Earnings | EPS returns to positive territory above $0.10 in the next quarterly report, with management providing clear explanation of the one-time charge. | →Stable |
| CounterIf the massive earnings miss is truly a one-time impairment or write-off, the underlying cash flow from operations may be more stable than reported EPS suggests. | ||
At a forward P/E of 18.8x, PEG of 0.15, and price-to-sales near 0, NGL appears deeply undervalued on headline metrics, but these ratios may reflect justified distress pricing rather than genuine margin of safety. Valuation breakdown | Forward earnings estimates stabilize and the stock re-rates above $18 as concerns around the recent earnings miss are resolved through management commentary. | →Stable |
| CounterPEG ratios below 0.2 in distressed midstream companies are often value traps where the earnings trajectory is declining faster than the price adjusts. | ||
Despite business quality concerns, the stock shows rising on-balance volume and RSI at 37 — a pullback-in-uptrend level — with the stock trading above the 200-day moving average and near technical support. Momentum breakdown | Price recovers above $17 within 6 months as technical support holds and volume accumulation continues. | →Stable |
| CounterRising on-balance volume in a low-quality business may reflect short-covering rather than genuine institutional conviction, making the technical signal less reliable. | ||
NGL Energy Partners reported a 13% revenue decline year-over-year and a quality score of 2.5 that falls well below the minimum investment threshold of 4.0, reflecting structural weakness in the midstream business without a competitive moat.
→StableQuality breakdown
- Expectation
- Revenue stabilizes and returns to flat or positive growth while quality score improves above 4.0 within 12 months.
CounterMidstream MLPs often show revenue volatility tied to commodity throughput volumes rather than structural business deterioration, and distribution coverage may remain stable despite headline revenue weakness.
In the most recent reported quarter, NGL delivered an EPS of -$3.44 against a consensus estimate of $0.18, representing a -2011% miss that strongly suggests a non-recurring but materially negative event impacted financial results.
→StableEarnings
- Expectation
- EPS returns to positive territory above $0.10 in the next quarterly report, with management providing clear explanation of the one-time charge.
CounterIf the massive earnings miss is truly a one-time impairment or write-off, the underlying cash flow from operations may be more stable than reported EPS suggests.
At a forward P/E of 18.8x, PEG of 0.15, and price-to-sales near 0, NGL appears deeply undervalued on headline metrics, but these ratios may reflect justified distress pricing rather than genuine margin of safety.
→StableValuation breakdown
- Expectation
- Forward earnings estimates stabilize and the stock re-rates above $18 as concerns around the recent earnings miss are resolved through management commentary.
CounterPEG ratios below 0.2 in distressed midstream companies are often value traps where the earnings trajectory is declining faster than the price adjusts.
Despite business quality concerns, the stock shows rising on-balance volume and RSI at 37 — a pullback-in-uptrend level — with the stock trading above the 200-day moving average and near technical support.
→StableMomentum breakdown
- Expectation
- Price recovers above $17 within 6 months as technical support holds and volume accumulation continues.
CounterRising on-balance volume in a low-quality business may reflect short-covering rather than genuine institutional conviction, making the technical signal less reliable.
TrendMatrix Research · core thesis
Engine thesis — one sentence
NGL Energy Partners is a midstream MLP with attractive headline valuation metrics but deeply concerning quality — revenue declined 13%, quality score of 2.5 falls below the minimum threshold, and a dramatic $3.44 per unit earnings miss last quarter signals underlying business instability.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 3.4 |
| Gross margin | 2.2 |
| Op margin | 0.8 |
| Net margin | 0.0 |
| Current ratio | 4.1 |
| Moat | 3.0 |
| Piotroski F | 6.7 |
- ▸No competitive moat
- ▸Quality concerns
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -13%
Momentum
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 2.4 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.9 |
| quality rank | 0.0 |
| growth rank | 0.2 |
Technical
8.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.4 |
| 52w position | 6.2 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 0.0 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 9.4 |
- ▸High IV: 89%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:2.6<4.5
Warning (1)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
10.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.9B) below institutional reach
SuitabilityAggressive — MCap $1.9B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Technical at 8.5 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.6<4.5.
The strongest dimensions are Technical at 8.5, Value at 8.3, and Growth at 5.0; the weakest are Quality at 2.5, Momentum at 2.6, and Catalyst at 2.8. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Revenue Decline Quality Floor
Trip ifRevenue declines more than 20% year-over-year for 2 consecutive quarters.
- P2Catastrophic Earnings Miss
Trip ifEPS surprise falls below -50% in any single quarter or EPS misses consensus in at least 3 of the next 4 quarters.
- P3Attractive Valuation Distorted Quality
Trip ifForward earnings estimates decline more than 30% from current consensus levels.
- P4Technical Support Momentum
Trip ifPrice drops below $14.88 stop-loss level or on-balance volume declines for more than 6 consecutive weeks.