Episode Details

NGL Energy Partners LP Q4 FY2026 earnings breakdown - conversational walkthrough with a price-aware verdict and Wall Street consensus comparison. THE CALL: HOLD (3/5 conviction, MODERATE) - CURRENT @ $17.17 - HOLD - BUY below $14.00 with $10.50 stop - AVOID above $21.00 TRIGGER: Leverage drops below 4.5x AND distribution reinstatement announced WINDOW: 12-18 months through FY2027 leverage confirmation TRACKER: chargedalpha.com/calls/NGL WALL STREET CONSENSUS - Ratings: 0 Strong Buy / 0 Buy / 1 Hold / 0 Sell / 0 Strong Sell - HOLD - Median 12-month price target: $2.00 (range $2 - $2) - Charged Alpha vs consensus: ALIGNED THESIS NGL Energy Partners is a levered Permian water-infrastructure play whose Water Solutions segment - Permian produced-water disposal and treatment - is growing volumes double digits and improving EBITDA. The unit has already repriced off a distressed low; the next leg requires either leverage below 4.5x or distribution reinstatement. Bull lever: If Permian rig activity holds and NGL hits sub-4.5x leverage by end of FY2027, the unit could re-rate toward midstream peer multiples - at 3x EV-to-Sales the unit would imply a multiple of current prices. The distribution reinstatement would add income buyers. Key risk: With leverage at 5.8x, any disruption to Permian activity, a debt-market dislocation, or slower-than-expected EBITDA growth could pressure the balance sheet. Distribution remains suspended and K-1 tax complexity limits the MLP's institutional and retail investor universe. QUALITY CHECK - Management quality grade: B (Executing a difficult multi-year turnaround - distribution suspension was painful but the deleveraging plan is proceeding and Water Solutions growth validates the core thesis. Credibility has been rebuilt quarter by quarter.) - Earnings quality grade: B- (GAAP earnings are heavily impacted by non-cash items and preferred-unit accounting; adjusted EBITDA is the relevant metric. Operating cash flow conversion is strong but GAAP losses obscure the underlying cash generation.) CHAPTERS 0:00 Hook 0:14 Year In One Chart 0:42 The Print 1:27 Beat Decomposition 1:48 The Trend 2:43 The Business 3:35 The FCF Bridge 4:17 Margin Quality 4:50 Guidance & The Narrative Diff 5:41 Catalyst Calendar 6:17 Peer Dot-Plot 6:45 Valuation Triangle 7:09 Management & Earnings Quality 7:46 The Call - Verdict (price-aware + consensus) 8:30 The Call - Supporting Evidence 9:07 Disclosure KEY METRICS - Q4 FY2026 - Revenue: $0.95B (YoY -2.2%) - EPS: $157.40 (vs $151.00 est, beat +4.2%) - Operating margin: 8.8% - Free cash flow (seasonal Q1): $94.1M (9.9% margin) NGL Energy Partners LP reported Q4 and full-year FY2026 results (fiscal year ending March 2026) on May 28, 2026. The unit has surged over 400 percent off its 52-week low of $3.32 as investors have repriced the deleveraging and Water Solutions growth story. Full-year revenue declined from $3.47B to $3.16B due to the strategic wind-down of low-margin Liquids Logistics commodity trading. Full-year adjusted EBITDA improved to approximately $646M. Water Solutions - Permian produced-water disposal, treatment and recycling - grew volumes double digits year over year and now represents roughly 48% of segment EBITDA. Q4 GAAP net loss was $326M, almost entirely from non-cash preferred-unit redemption charges and asset impairments. Q4 operating cash flow was $126M and free cash flow was $94M. The company executed over $100M of non-core asset sales in FY2026. Management targets sub-4.5x leverage by end of FY2027 and has signaled eventual distribution reinstatement contingent on hitting that leverage target. MLP unitholders receive K-1 tax forms - a complexity factor for individual investors. NARRATIVE DIFF - what changed in management tone - Prior call: "We remain committed to our deleveraging roadmap. The Water Solutions segment continues to gain share in the Permian basin and we expect volume growth to accelerate through the se