NGL Energy Partners (NGL) heads into its second quarter fiscal 2027 earnings release on November 5 with attention split between rising water disposal activity, stronger butane sales and heavier capital and interest costs.
Recent trading reflects that mix of optimism and caution. The share price return is up 65.15% year to date to US$16.35, while the 1 year total shareholder return of 141.51% and 3 year total shareholder return of 283.80% point to strong momentum that recent Q2 earnings anticipation has helped keep in focus.
Scan for opportunities with momentum similar to NGL Energy Partners by focusing on companies in our hand picked 34 high quality undervalued stocks that pair solid fundamentals with potential mispricing.
NGL Energy Partners has real operating heft in water, crude and liquids, and the unit price has surged on that story. The next step is testing whether that strength is already fully reflected in the valuation.
Preferred Price-to-Sales of 0.6x: Is it justified?
NGL Energy Partners trades at a P/S ratio of 0.6x, and that level comes across as low when set against both peer and industry benchmarks.
The P/S ratio compares the partnership’s market value to its $3,523.995m of revenue, which can be useful for businesses that are not currently profitable. For NGL Energy Partners, this lens matters because the firm reported a net loss of $351.004m and traditional earnings based measures such as P/E are not meaningful right now.
Relative pricing tilts the picture further. NGL is flagged as good value compared to peers with an average P/S of 2.5x and also versus the broader US Oil and Gas industry at 2.1x. The estimate of a fair P/S multiple at 0.7x points to a level that the market could potentially move towards if sentiment and fundamentals stay aligned with current expectations.
Explore the SWS fair ratio for NGL Energy Partners.
Result: Price-to-Sales of 0.6x (UNDERVALUED)
Still, the recent loss of US$351.004m and the annual revenue decline of 8.31% leave little room for error if water or liquids activity softens.
Find out about the key risks to this NGL Energy Partners narrative.
Another View: SWS DCF model points even higher
The P/S workup paints NGL Energy Partners as inexpensive, yet the SWS DCF model goes further. With an estimated future cash flow value of $26.05 per unit versus the current $16.35 price, that model also frames NGL as undervalued and suggests a wider potential gap to close.
Both signals point in the same direction, but they rest on very different assumptions about future cash generation. The key question for you is simple: Which set of assumptions feels more realistic for NGL’s next few years of water and liquids cash flows, and how much weight should that carry in your own process?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out NGL Energy Partners for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 34 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
If the mix of caution and optimism around NGL Energy Partners leaves you uncertain, consider reviewing the underlying data now so you can form your own view of the 3 key rewards.
Looking for more investment ideas beyond NGL Energy Partners?
Do not stop with NGL Energy Partners. Broaden your watchlist now, because the next opportunity rarely waits for anyone who hesitates.
- Target potential mispricing by scanning a curated set of quality companies through the 34 high quality undervalued stocks and see which fundamentals the market may be overlooking.
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