Western Midstream Partners, LP (WES) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/S above the industry

Western Midstream Partners, LP's price-to-sales of 3.73 is above the Gas Production and Distribution median of 2.68 (book value is negative, so we use sales).

Trading below fair value

The share price of $41.32 is below our fair value estimate of $56.60.

Margin of safety over 20%

The price is 27.0% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 5.7% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings growth not accelerating

Net income grew -3.6% over the last twelve months, against a 5-year average of 17.5% a year.

Growing faster than the industry

Revenue grew 22.3% over the last twelve months; the Gas Production and Distribution median is 13.6%.

Guidance issued

The latest outlook (full-year 2026 Distributable Cash Flow, Aug 5, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin slipping

Gross margin was 91.0% over the last twelve months, against 95.3% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on invested capital

Needs operating income and invested capital.

Return on equity against the industry

Needs positive equity.

Earnings grew over 5 years

Net income grew 17.5% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 27.9% over the last twelve months, against a 5-year average of 35.3%.

Net margin above the industry

Western Midstream Partners, LP's net margin of 27.9% is above the Gas Production and Distribution median of 13.1%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 23.3% of total debt.

Interest not well covered

Operating income covers interest expense 4.0 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.81 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.46; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Western Midstream Partners, LP paid dividends worth 6.7% of the share price over the last twelve months.

Yield above Treasuries

The 6.7% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Western Midstream Partners, LP yields 6.7%.

Dividend stability

Fewer than five years of dividend history.

Not covered by earnings

Dividends take 120% of net income, leaving little room.

Cash-flow cover

Needs dividends paid and free cash flow.