NGL Energy Partners (NGL) is back in focus after reporting fourth quarter and full year results that shifted from prior net income to sizeable losses, alongside lower revenue versus the previous year.

At a share price of US$16.53, NGL has seen a 39.61% 90 day share price return and a very large 1 year total shareholder return, while the recent post earnings pullback suggests some investors are reassessing risk.

If this kind of sharp move has you looking beyond one stock, it could be a good moment to see what else is moving in energy infrastructure and services via our 33 power grid technology and infrastructure stocks

So with NGL Energy Partners trading at US$16.53, a value score of 4 and an indicated 27.57% intrinsic discount alongside fresh losses, are you looking at a genuine undervaluation or a price that already reflects its future?

Preferred Price-to-Sales of 0.6x: Is it justified?

NGL Energy Partners is trading at a P/S of 0.6x, which screens as inexpensive compared to both its peer group and the broader US Oil and Gas sector.

The P/S ratio compares the company’s market value to its revenue, so a lower multiple can signal that investors are paying less for each dollar of sales. For a partnership focused on transportation, storage and logistics, where revenue is a key reference point, this metric often becomes a simple way to compare it with other energy infrastructure and services stocks.

Here, NGL stands out as good value versus a direct peer average P/S of 2.6x and the US Oil and Gas industry average of 2x. This comparison suggests the market is assigning a much lower revenue multiple than many comparable companies. However, the SWS fair P/S ratio estimate of 0.4x implies that, based on the underlying regression work, the market could still compress the multiple closer to that level over time.

Result: Price-to-Sales of 0.6x (UNDERVALUED)

However, recent revenue contraction alongside a reported net loss of US$181.635 million could still point to business pressures that keep the discount in place.

Another View: DCF Signals Deeper Upside

While the P/S of 0.6x already flags NGL Energy Partners as inexpensive versus peers, the SWS DCF model goes further. With a fair value estimate of $22.82 versus the current $16.53 price, it points to the stock trading at a 27.6% discount. This raises the question of whether it is a value trap around fresh losses or a mispriced asset with room to re rate.

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 46 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

With sentiment clearly mixed around NGL's valuation gap and recent losses, it makes sense to move fast and check the underlying data yourself. To weigh up whether the current price better reflects risks or rewards, take a closer look at the 1 key reward and 1 important warning sign

Looking for more investment ideas?

If NGL has sharpened your attention, do not stop here. Broaden your watchlist with stocks that match the kind of quality and pricing you want.

• Target potential value opportunities by scanning our list of 46 high quality undervalued stocks that combine pricing appeal with solid fundamentals.
• Prioritise resilience and capital protection by reviewing 63 resilient stocks with low risk scores designed to highlight companies with lower risk scores.
• Spot under-followed opportunities early by using the screener containing 22 high quality undiscovered gems that surfaces high quality stocks the market may be overlooking.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.