LITTLE ROCK, Ark. - Montrose Environmental Group, Inc. (NYSE: MEG) announced on Tuesday that it has been awarded a significant contract by the U.S. Army Corps of Engineers' Mobile District. The $249 million contract, spanning five years, will see the company providing a range of environmental quality support services.
The contract tasks Montrose with delivering solutions and remedial plans that address air and water quality compliance, pollution prevention, hazardous waste, sustainability, and specifically the management of per-and polyfluoroalkyl substances (PFAS). PFAS are a group of manufactured chemicals that have garnered widespread attention due to their persistence in the environment and potential health implications.
Vijay Manthripragada, president and CEO of Montrose, expressed enthusiasm for the partnership with the U.S. government and the opportunity to apply the company's expertise to complex environmental challenges. He emphasized the company's integrated approach to environmental consulting, analytical services, engineering, and technology as key to addressing these issues effectively.
The Department of Defense, according to the Environmental Business Journal's 2024 EBJ Remediation Markets Survey, is seen as a high-growth area within the U.S. remediation services market, which is estimated at $15.5 billion annually. The increasing number of large infrastructure projects, including those by the USACE, has been supported by bipartisan funding, notably from the Bipartisan Infrastructure Law.
Montrose, with a workforce of approximately 3,400 employees across more than 100 locations globally, positions itself as a comprehensive provider of environmental services. The company offers a wide range of services from air measurement and laboratory services to regulatory compliance, emergency response, permitting, engineering, and remediation.
This announcement is based on a press release statement and should be considered within the context of forward-looking statements as defined by federal securities laws. Montrose has indicated that these statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Investors are advised to consult the company's SEC filings for a more detailed understanding of these risks.
In other recent news, Montrose Environmental Group reported record Q2 revenue of $173.3 million for 2024, marking a 9% increase, and a 10% rise in adjusted EBITDA. The company's first-half revenues totaled $328.7 million, a 13.1% increase year-over-year, with full-year revenue guidance set between $690 million and $740 million. Montrose Environmental has been expanding through strategic acquisitions, particularly in Canada and the U.S. Mountain and Gulf states.
BofA Securities maintained a Buy rating for Montrose Environmental, emphasizing the importance of the private sector's response to environmental remediation demands, particularly for per- and polyfluoroalkyl substances (PFAS). After the U.S. Environmental Protection Agency added two PFAS chemicals to the hazardous substances list, BofA Securities expressed confidence in Montrose Environmental's market prospects.
Needham and Evercore ISI also maintained their Buy and Outperform ratings on Montrose Environmental, respectively, with price targets of $54.00 and $43.00. These ratings reflect the firms' confidence in Montrose's robust financial performance and growth trajectory. Montrose Environmental has set guidance for 2024, projecting 10%-12% organic growth.
InvestingPro Insights
The recent $249 million contract awarded to Montrose Environmental Group (NYSE: MEG) by the U.S. Army Corps of Engineers aligns with the company's growth trajectory. According to InvestingPro data, MEG's revenue growth stands at 18.2% for the last twelve months as of Q2 2023, with quarterly revenue growth of 8.94% in Q2 2023. This new contract is likely to bolster these figures further.
Despite the positive news, MEG's stock has experienced significant volatility. InvestingPro Tips highlight that while the stock has seen a significant return over the last week (12.08%), it has fallen considerably over the last three and six months (-38.76% and -44.95% respectively). This volatility may reflect the market's reaction to the company's financial performance and future prospects.
Interestingly, although MEG is not currently profitable, with a negative operating income of -$17.63 million in the last twelve months, analysts predict the company will be profitable this year. This optimism could be fueled by contracts like the one announced with the U.S. Army Corps of Engineers.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 11 additional InvestingPro Tips available for MEG, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.