MeritValue

Kodiak Gas Services, Inc.

KGSdata completeness 100%5 fiscal years on file
The thesis, from the filings

Kodiak Gas Services, Inc. earns about 7% on invested capital, but has diluted owners by 50% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $9.43 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$606.4M1$707.9M2$850.4M3$1.16B3$1.31B3
Net income$181M4$106.3M5$20.1M6$49.9M6$80.5M6
Operating cash flow$250M7$219.8M8$266.3M9$328M9$599.7M9
Capital expenditure$201.9M10$259.3M11$219.8M12$337M12$315.5M12
Free cash flow (derived)$48M7−$39.5M8$46.5M9−$8.97M9$284.3M9
Total debt—$2.72B13$3.58B14$5.17B15$5.11B15
Cash & equivalents$28.8M16$20.4M17$5.56M18$4.75M19$3.18M19
Diluted shares59.0M59.0M68.3M85.2M88.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$136.39
your share of equity
Profit it earned you last year
$9.1
Free cash flow it threw off
$32.11
Debt you’d be carrying
$577.35

10 shares is a claim on $136.39 of net worth that earned you $9.1 and generated $32.11 of cash last year, against $577.35 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
7% avg · 5y
FY21 22%FY22 8%FY23 3%FY24 1%FY25 1%

It earned an average 7% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+50% shares · 5y

Share count is up 50% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 88% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$46.5M
DCF · Growth Exit 5Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$46.5M
Earnings Power Value
$9.43
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$80.5M
  • growthAssumed0.0%
Graham Number
$16.53
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001767042-24-000011 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001767042-25-000010 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001767042-26-000012 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001767042-24-000011 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001767042-25-000010 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001767042-26-000012 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001767042-24-000011 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001767042-25-000010 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001767042-26-000012 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001767042-24-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001767042-25-000010 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001767042-26-000012 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-12-31 · accession 0001767042-24-000011 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2023-12-31 · accession 0001767042-25-000010 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2024-12-31 · accession 0001767042-26-000012 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2021-12-31 · accession 0001767042-25-000010 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  17. 10-K · period ending 2022-12-31 · accession 0001767042-24-000011 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-12-31 · accession 0001767042-25-000010 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-12-31 · accession 0001767042-26-000012 (CashAndCashEquivalentsAtCarryingValue)