NCS Multistage Holdings Sees Robust Growth, Strategic ResMetrics Acquisition

Stonegate Capital Partners has updated its coverage on NCS Multistage Holdings, Inc. (NASDAQ: NCSM), highlighting a robust 22.8% year-over-year revenue increase to $36.5M in 2Q25. This growth was fueled by heightened fracturing systems activity and frac plug sales in the U.S. and Canada, despite a seasonal dip in Canada. Internationally, revenues saw a sequential uptick of 67.2%, thanks to increased equipment sales in the North Sea, though year-over-year figures declined due to reduced tracer diagnostics work in the Middle East. NCSM's U.S. revenues surged 45% sequentially as delayed projects kicked off. The company's adjusted gross margins stood at 35.7%, a slight decrease from the previous year. With the recent acquisition of ResMetrics LLC, a leader in chemical tracer diagnostics, NCSM is poised for further growth, expecting the deal to contribute $4–5M in revenue and $1–1.5M in EBITDA for the remainder of FY25. ResMetrics not only bolsters NCSM's diagnostics portfolio but also expands its reach in the U.S. and Middle East, aligning with its strategy to penetrate high-margin diagnostics markets globally.

NCSM's financial health appears solid, with a net working capital of $64.0M and a total liquidity position of $42.6M, against a modest total debt of $7.7M. The company's guidance for the full year projects revenues between $172.0M and $181.0M, with adjusted EBITDA expected to range from $22.0M to $25.5M. Stonegate's valuation analyses suggest a promising outlook for NCSM, with DCF and EV/EBITDA valuations indicating a mid-point of $40.89 and $42.06, respectively. This update underscores NCSM's resilience and strategic positioning for sustained growth, supported by its core product lines and strategic acquisitions like ResMetrics.