Montrose Environmental Group is a US-based environmental services company currently trading at $23.44 with a market capitalization of approximately $800 million, positioning it as a mid-sized company in the sector1. Founded in 2012 and listed on the New York Stock Exchange in July 2020, the company provides integrated environmental solutions including environmental assessment, measurement and analysis, and remediation and reuse services1.
Montrose Environmental Group (MEG) stock price performance from January 2024 to July 2025, showing significant volatility with a peak of $49.97 and subsequent decline to $10.51 before recent recovery
Business Model and Operating Segments
Montrose operates through three core business segments:
Assessment, Permitting & Response provides scientific advisory and consulting services to support environmental assessments, environmental emergency response and recovery, toxicology consulting, environmental audits and permits for current operations, facility upgrades, new projects, decommissioning projects, and development projects1. This segment generated Q1 2025 revenue of $53.1 million, down 9.3% year-over-year, while maintaining an adjusted EBITDA margin of 19.9%2.
Measurement and Analysis 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 health1. This segment achieved the strongest performance with Q1 2025 revenue of $59.0 million, up 29.8%, and adjusted EBITDA margin improved by 900 basis points from 14.3% to 23.3%2.
Remediation and Reuse provides clients with engineering, design, implementation and operations and maintenance services, contaminated water, remove contaminants from soil or create biogas from waste1. Q1 2025 revenue was $65.7 million, up 28.2%, though adjusted EBITDA margin declined slightly from 9.8% to 9.0%2.
Financial Performance Analysis
Revenue Growth and Profitability
| Year | Revenue (Million USD) | Revenue Growth | Gross Margin | Operating Margin | Net Margin |
|---|---|---|---|---|---|
| 2024 | 696.4 | 11.6% | 39.9% | -5.3% | -8.9% |
| 2023 | 624.2 | 14.7% | 38.5% | -4.6% | -4.9% |
| 2022 | 544.4 | -0.4% | 35.4% | -5.1% | -5.8% |
Montrose achieved an average annual revenue growth of 12.8% from 2022 to 2024, with gross margins continuously improving from 35.4% to 39.9%34. However, persistent operating and net losses remain a key challenge for profitability improvement56.
Q1 2025 delivered record-breaking results with revenue of $177.8 million, up 14.5% year-over-year, and adjusted EBITDA of $19.0 million, up 12.5%, marking the best Q1 performance in company history27. Operating cash flow improved by $27.5 million year-over-year to $5.5 million2.
Financial Position
| Metric | Value |
|---|---|
| Total Assets (Million USD) | $990.4 |
| Cash (Million USD) | $12.9 |
| Total Debt (Million USD) | $544.1 |
| Debt-to-Equity Ratio | 0.63 |
| Current Ratio | 1.50 |
The company’s financial position is relatively stable1. As of end-2024, total assets were $990.4 million with a debt-to-equity ratio of 0.63, maintaining appropriate leverage levels1. The current ratio of 1.50 indicates good short-term liquidity8. However, cash holdings of $12.9 million are relatively low, making cash flow management critical1.
Stock Performance and Technical Analysis
Montrose stock has exhibited extreme volatility. After reaching a 52-week high of $49.97 in May 2024, it plummeted to $10.51 in April 2025, representing approximately a 79% decline1. Since then, it has shown gradual recovery, currently trading at $23.44, up about 123% from the low1.
This extreme volatility reflects characteristics typical of small-to-mid-cap environmental services stocks, along with sensitivity to environmental regulatory policy changes, project awards, and overall market sentiment1.
Competitive Landscape and Market Position
| Company | Market Cap (Million USD) | Revenue (Million USD) | Net Margin |
|---|---|---|---|
| Montrose Environmental (MEG) | 802 | 696 | -8.9% |
| Tetra Tech (TTEK) | 10,500 | 4,200 | 6.5% |
| Casella Waste Systems (CWST) | 4,200 | 1,100 | 8.2% |
| Clean Harbors (CLH) | 11,500 | 5,800 | 7.2% |
| Waste Management (WM) | 93,400 | 22,060 | 12.5% |
In the environmental services industry, Montrose is positioned as a mid-sized company and, unlike larger competitors, has not yet achieved profitability910. However, considering revenue scale and growth rates, it holds a meaningful position in the industry and is pursuing differentiation strategies through integrated service portfolios11.
According to one industry ranking, Montrose is ranked 2nd among 280 active competitors, demonstrating its significant market presence despite profitability challenges11. The company has completed 27 acquisitions since its founding, including five in 2024 alone, as part of its growth strategy11.
2025 Outlook and Guidance
Montrose raised its annual guidance following Q1 2025 results2:
- Revenue Guidance: $735-785 million (reaffirmed)
- Adjusted EBITDA Guidance: $103-110 million (raised from previous $101-108 million)
- Long-term Organic Growth Rate: 7-9% annually
The company announced a pause on acquisitions to focus on organic growth, margin improvement, and cash flow enhancement2. Management expects the Remediation & Reuse segment to account for over 40% of total revenue2.
Analyst Opinions and Price Targets
| Item | Value |
|---|---|
| Average Price Target (USD) | $31.80 |
| High Price Target (USD) | $38.00 |
| Low Price Target (USD) | $29.00 |
| Upside Potential | +35.52% |
| Investment Rating | Moderate Buy |
Five analysts provide coverage with an average price target of $31.80, suggesting 35.52% upside potential from current levels12. Most analysts maintain buy ratings, though some have recently adjusted their targets and ratings downward1314.
Risk Factors
Key risks facing Montrose include:
- Persistent Net Losses: Ongoing net losses since 2018 make achieving profitability an urgent priority56
- High Stock Volatility: Extreme volatility with 52-week range of 79% creates significant investment risk1
- Environmental Policy Dependence: High sensitivity to EPA policy changes, tariff policies, and other government regulations15
- Cash Flow Management: Relatively low cash holdings make liquidity management critical1
Investment Opinion
Montrose Environmental Group is a mid-sized company providing integrated solutions in the high-growth-potential environmental services market. Record Q1 2025 results and raised guidance are positive signals, but persistent net losses and high volatility remain key concerns.
Positive Factors:
- Record Q1 2025 performance and raised guidance27
- Strong revenue growth rates and improving gross margins34
- High-growth-potential environmental services market16
- Positive analyst outlook with moderate buy rating12
Negative Factors:
- Persistent operating and net losses56
- Extreme stock price volatility1
- High sensitivity to policy changes15
- Low cash holdings1
At current price levels, the stock may be attractive to investors who believe in the company’s ability to improve profitability and the growth potential of the environmental services market. However, given high volatility and uncertainty, a cautious approach is warranted. Second-half 2025 results will be a critical benchmark for assessing guidance achievement.