Mistras Group reported 24Q4 EPS of $0.17 vs. 23Q4’s loss of $0.08 and my estimate of $0.14. Revenues of $172.7 million declined 5.1%, due to a 10.1% decline in Mistras’s largest industry served, Oil & Gas, that was only partially offset by increased revenues elsewhere. Gross profit declined 4.3% to $51.3 million, as a 20 bp increase in gross margin only partially offset the decline in revenues. SG&A costs fell by 7.5 million or 17.6% to $35.4 million, which management attributes to the success of its Project Phoenix reorganization initiative. Since Project Phoenix is substantially complete, reorganization costs were $1.3 million in the quarter, down from $6.25 million a year ago. Thus, despite the drop in revenues, income from operations was $10.5 million, up from $0.7 million in 23Q4. With lower interest expense offset by a swing from an income tax benefit to expense, the company recorded net income of $5.2 million, reversing 23Q4’s loss of $2.5 million.
On January 1, Natalia Shuman became Mistras’s CEO, replacing Manuel Stamatakis, who continues as Chairman of the Board. From 2021-2024, Ms. Shuman was Group EVP and Group Operating Council member of Eurofins Scientific, a global network of more than 900 laboratories in 52 countries that provides testing services for food, environment, pharma, agroscience and other sectors. From 2017-2021, She was North America CEO of Bureau Veritas, another global leader in testing, inspection and certification services. Prior to that, she served as Head of International Business at Kelly Services.
Despite the significantly improved financial performance, Mistras declined to provide full year guidance for fiscal 2025 at this time. Mr. Stamatakis said that the decision to delay issuing guidance was made to allow Ms. Shuman and her team time to evaluate all of the company’s lines of business. In addition, the earnings press release indicated that the company needed time to assess the impact of Euro to U.S. dollar exchange rate fluctuations on revenue.
Despite the better than anticipated 24Q4 performance, my projections for 2025 are little changed. I now anticipate GAAP EPS of $0.78 per diluted share and non-GAAP EPS of $0.87. For 2026, my projections show GAAP EPS of $0.83 and non-GAAP EPS of $0.92.
Since my last report (11/8), MG’s stock is down only 0.4%, much better than the 22.1% drop in the S&P Small Cap 600 Index. Based upon the quarterly results and my updated projections, I am maintaining $10.30 price target. The price target equates to one-year forward valuation multiples of 12.4 times projected 2026 GAAP EPS of $0.83 and 11.2 times projected 2026 non-GAAP EPS of $0.92. The revised price target represents a potential return of 10.5% from Friday’s closing price of $9.36. Accordingly, I am maintaining my performance rating of “3” (Neutral).
Going forward, I will not be publishing quarterly updates on Mistras Group. I intend to continue following the company, but will only issue reports on an ad hoc basis. This move will help free up research capacity so that I can add one or two new names to my coverage list.
This is a summary of Lark Research’s update report on Mistras Group, Inc. (MG). To obtain a copy of the report, please reach out to Steve Percoco using the contact information provided below.
June 20, 2025 (Report published on April 18, 2025.)
Stephen P. Percoco
Lark Research
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