Chart Industries Inc (GTLS, Financial), a key player in the industrial products sector, has recently experienced a notable fluctuation in its stock price. Over the past week, the company's shares have declined by 4.61%, yet over the last three months, the stock has surged by an impressive 19.91%. Currently, the stock is priced at $153.28, with a market capitalization of $6.44 billion. Despite this growth, the GF Value suggests a valuation of $314.12, indicating a potential overvaluation and advising investors to think twice, as it might be a possible value trap.
Overview of Chart Industries
Chart Industries Inc specializes in cryogenic equipment used in the industrial gas and liquefied natural gas (LNG) industries. The company's product range extends to natural gas processing solutions and specialty products for sectors like hydrogen, biofuels, and water treatment. A significant expansion move was made in early 2023 with the acquisition of Howden, which approximately doubled the company's size. This strategic acquisition aims to enhance Chart Industries' market reach and technological capabilities in its sector.
Assessing Profitability
Chart Industries boasts a Profitability Rank of 7 out of 10, reflecting its robust financial health relative to the industry. The company's operating margin stands at 11.68%, outperforming 71.6% of its peers. However, its return on equity (ROE) and return on assets (ROA) are relatively low at 1.76% and 0.55% respectively, suggesting room for improvement in capital efficiency. The return on invested capital (ROIC) is 4.97%, indicating a moderate effectiveness in allocating capital towards profitable investments. Chart Industries has maintained profitability for nine out of the past ten years, underscoring its consistent performance.
Growth Trajectory
The company's Growth Rank is a perfect 10/10, driven by substantial increases in revenue and earnings per share (EPS). The 3-year revenue growth rate per share is an impressive 30.40%, significantly higher than 90.31% of competitors. Similarly, the 5-year figure stands at 13.70%. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is projected at 19.19%. EPS growth has also been strong, with a 3-year growth rate of 48.40% and a 5-year rate of 39.40%. The future 3 to 5-year EPS growth rate is expected to be 27.70%, reflecting optimistic future earnings potential.
Major Shareholders
Notable investors in Chart Industries include Ron Baron (Trades, Portfolio), holding 1,145,013 shares (2.68% of shares), Ken Fisher (Trades, Portfolio) with 591,013 shares (1.38%), and Mario Gabelli (Trades, Portfolio) who owns 119,720 shares (0.28%). These significant investments by well-known financial gurus underscore confidence in the company's future prospects.
Competitive Landscape
Chart Industries faces competition from companies like Flowserve Corp (FLS, Financial) with a market cap of $6.26 billion, Watts Water Technologies Inc (WTS, Financial) valued at $6.85 billion, and The Middleby Corp (MIDD, Financial) at $7.62 billion. These companies are closely matched in terms of market capitalization, highlighting the competitive environment in which Chart Industries operates.
Conclusion
While Chart Industries Inc shows strong growth metrics and strategic expansion efforts, the current GF Valuation suggests caution. The company's recent stock performance and its competitive standing in the industrial products industry, combined with its growth prospects, make it a noteworthy stock. However, investors should consider the potential risks associated with the valuation before making investment decisions.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
