GENESIS ENERGY LP (GEL) Stock Analysis
GENESIS ENERGY LP (GEL) Stock Analysis
Overall Grade: F (Concerning)
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GENESIS ENERGY LP faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | 6.0% | Below expectations |
| FCF Margin | 4.0% | Cash flow pressure |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is GENESIS ENERGY LP's Profitability and ROIC?
GENESIS ENERGY LP's return on invested capital of 6.0% is below the typical cost of capital.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.0% | Warning | Below cost of capital |
| Operating Margin | 15.8% | Good | Efficient operations |
How Strong is GENESIS ENERGY LP's Cash Flow Quality?
GENESIS ENERGY LP generated $65.9M in free cash flow over the trailing twelve months, representing a 4.0% margin. FCF was positive in N/A of the last 8 quarters, indicating variable cash generation.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | 4.0% | Warning | Thin cash margins |
| Free Cash Flow (TTM) | $65.9M | Good | Positive cash generation |
| OCF/Net Income | -0.5x | Warning | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is GENESIS ENERGY LP's Financial Health?
Is GENESIS ENERGY LP Stock Overvalued or Undervalued?
GENESIS ENERGY LP trades at a P/E of -3.7x, representing a premium to the sector median of N/A. Free cash flow yield of 3.5% reflects market expectations for growth.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | -3.7x | Red flag | Reasonable valuation |
| EV/Sales | 1.1x | Excellent | Attractive revenue multiple |
| FCF Yield | 3.5% | Adequate | Lower cash yield |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.0% | Bottom 50% | 0.9x below |
| Free Cash Flow Margin | 4.0% | Bottom 50% | 0.9x below |
| Operating Margin | 15.8% | Top 25% | 2.5x above |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: 6.0% (Warning - Bottom 50% of sector (median: 6.7%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: 4.0% (Warning - Bottom 50% of sector (median: 4.3%))
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: 3.5% (Adequate)
Frequently Asked Questions
Q: What is GENESIS ENERGY LP's Return on Invested Capital (ROIC)?
GENESIS ENERGY LP (GEL) has a trailing twelve-month Return on Invested Capital (ROIC) of 6.0%. This compares below the sector median of 6.7%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is GENESIS ENERGY LP's Free Cash Flow Margin?
GENESIS ENERGY LP (GEL) has a free cash flow margin of 4.0%, generating $65.9 million in free cash flow over the trailing twelve months. A thin FCF margin may indicate heavy reinvestment or operational challenges.
Q: Is GENESIS ENERGY LP stock overvalued or undervalued?
GENESIS ENERGY LP (GEL) trades at a P/E ratio of -3.7x, which is above the sector median of N/A. The EV/Sales multiple is 1.1x. Free cash flow yield is 3.5%, which is in line with market averages.
Q: What is GENESIS ENERGY LP's revenue and earnings growth?
GENESIS ENERGY LP (GEL) declined revenue by 1.8% year-over-year. Earnings per share decreased by 237.9% compared to the prior year. Revenue decline may indicate market challenges or industry headwinds.
Q: How does GENESIS ENERGY LP compare to competitors in Transportation?
Compared to other companies in Transportation, GENESIS ENERGY LP (GEL) shows: ROIC of 6.0% is below the sector median of 6.7% (Bottom 45%). FCF margin of 4.0% trails the sector median of 4.3% (Bottom 48% of sector). These rankings are based on MetricDuck's analysis of all Transportation companies with available SEC filings.
Q: What warning signs should I watch for with GENESIS ENERGY LP?
Investors in GENESIS ENERGY LP (GEL) should monitor these potential warning signs: 1) FCF margin is thin at 4.0%, leaving limited buffer for economic downturns. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-10-30. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.