Taking Stock of Kodiak Gas Services After Frontier’s Discounted Block Sale and Governance Reset

Frontier TopCo Partnership has just unloaded nearly 9.8 million shares of Kodiak Gas Services, Inc., in a discounted secondary offering, a governance shifting move that ends their Stockholders’ Agreement and reshapes Kodiak’s ownership landscape.

See our latest analysis for Kodiak Gas Services.

That chunky secondary sale comes after a choppy stretch for Kodiak, with an 8.9 percent 1 month share price return and 9.9 percent 3 month share price return, but a softer year to date share price return and 1 year total shareholder return suggesting momentum is only starting to rebuild.

If this governance reshuffle has you rethinking energy exposure, it could be a good moment to broaden your search and explore fast growing stocks with high insider ownership.

With governance now reset, solid double digit recent gains, and analysts still seeing upside to fair value, the key question is whether Kodiak remains mispriced after the sell down or if the market is already baking in future growth.

Most Popular Narrative Narrative: 16.9% Undervalued

Compared to the last close at $36.75, the most popular narrative pegs Kodiak Gas Services’ fair value meaningfully higher, framing the recent governance reset against a longer earnings runway.

High fleet utilization (over 97%), increased contracting of new large horsepower units at premium rates, and the long-term, fee-based nature of Kodiak's contracts underpin resilient, recurring revenue and EBITDA stability, providing earnings visibility even across choppy commodity price environments.

Read the complete narrative.

Want to see what kind of revenue climb, margin reset, and future earnings multiple are embedded in that outlook? The core assumptions may surprise you. Click through to unpack the full valuation story.

Result: Fair Value of $44.20 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained Permian dependence and capital intensive operations mean that any production slowdown or contract delays could quickly pressure utilization, margins, and that undervaluation thesis.

Find out about the key risks to this Kodiak Gas Services narrative.

Another Lens on Value

Step away from narratives and Kodiak suddenly looks pricey. Its 42.1 times earnings compares with 18.3 times for the US Energy Services group and a 22.2 times fair ratio, leaving little margin for error if growth or margins disappoint from here.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Kodiak Gas Services Narrative

If you would rather dig into the numbers yourself and challenge these views, you can shape a personalized take on Kodiak in just minutes, Do it your way.

A great starting point for your Kodiak Gas Services research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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.

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