Shelf registration and recent earnings put NGL Energy Partners (NGL) in focus

NGL Energy Partners (NGL) has filed a new US$121.3 million shelf registration for up to 10,000,000 common units tied to an ESOP related offering, shortly after reporting third quarter and nine month 2025 earnings.

The new shelf registration comes after a period of strong market interest in NGL Energy Partners, with a 30 day share price return of 23.33% and a year to date share price return of 21.21% at a US$12.00 unit price. This has occurred alongside a very large 1 year total shareholder return that is more than double on a multiple basis. Taken together, these factors suggest that momentum has been building as investors react to improved earnings, prior buybacks and the potential for future equity issuance tied to the ESOP.

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With the units up strongly and a fresh shelf registration in place, the key question now is whether NGL’s recent earnings and ESOP linked plans leave the units on sale or if the market is already pricing in future growth.

Preferred Price-to-Sales of 0.4x: Is it justified?

On the numbers provided, NGL Energy Partners screens as inexpensive on a price-to-sales basis, with a P/S ratio of 0.4x at a $12.00 unit price and commentary indicating it is trading at good value versus peers and its own estimated fair value.

The P/S ratio compares the partnership’s market value to its revenue and is often used when a business is loss making, as NGL currently is. For NGL, the P/S multiple of 0.4x is flagged as good value relative to both the peer average of 2.2x and the broader US Oil and Gas industry average of 1.6x. This indicates the market is attaching a lower revenue multiple to NGL than to many similar businesses.

At the same time, the estimated fair P/S ratio is also 0.4x. This leads to a label of expensive versus that fair ratio because the market is already pricing the units in line with that regression based level. Put simply, compared with peers, the units look lowly valued on sales, but compared with the modelled fair ratio, the current P/S leaves less room for a simple re rating toward that level.

Result: Price-to-Sales of 0.4x (UNDERVALUED)

DCF suggests upside to estimated fair value

Alongside the P/S view, NGL Energy Partners is also described as trading at a 24.2% discount to an estimated fair value from the SWS DCF model, with the units at $12.00 versus an implied future cash flow value of $15.84.

The SWS DCF model estimates value by projecting the partnership’s future cash flows and discounting them back to today, aiming to capture the present value of what NGL could generate over time. This type of model can be useful for a business that is currently unprofitable but where cash flow trajectories, debt servicing and the mix of segments like Water Solutions, Crude Oil Logistics and Liquids Logistics are central to the investment debate.

For investors following NGL, the combination of an indicated discount to DCF fair value and a relatively low P/S ratio versus the US Oil and Gas industry frames today’s price as one where the market is assigning a cautious revenue multiple even as the model points to a higher implied value.

Result: DCF Fair value of $15.84 (UNDERVALUED)

However, you also need to weigh risks such as annual revenue contraction of 31.05% and a net loss of US$33.522m, as these could challenge the bullish valuation story.

Another angle on NGL’s valuation

Even though the SWS DCF model points to a fair value of $15.84 and labels NGL as undervalued, it is still a model based on assumptions about future cash flows and profitability. With earnings forecasts and revenue decline expectations in the mix, how comfortable are you relying on that DCF gap?

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 53 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own NGL Energy Partners Narrative

If you do not fully agree with this view, or prefer to rely on your own assumptions, you can quickly shape the story yourself using our tools, Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding NGL Energy Partners.

Looking for more investment ideas?

If NGL has caught your eye, do not stop there. A few minutes with a focused screener can surface opportunities you might regret missing later.

• Target quality at a discount by checking companies our screener flags as 53 high quality undervalued stocks before the rest of the market pays closer attention.
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• Hunt for under the radar potential using our screener containing 23 high quality undiscovered gems that highlight businesses with solid fundamentals but limited current attention.

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.