📊 HESM Key Takeaways
Is HESM a Good Investment? Thesis Analysis
Hess Midstream generates robust free cash flow of $728.2M with a strong 62.2% operating margin, typical of a mature midstream infrastructure business. However, the 48.5% year-over-year decline in net income combined with an extremely tight $1.9M cash position and high leverage (3.8B debt vs 4.4B assets) creates significant financial stress, requiring careful debt management and resolution of profitability headwinds.
Why Buy HESM? Key Strengths
- Exceptional free cash flow generation of $728.2M with 44.9% FCF margin, providing cash for debt service
- Strong operating margins of 62.2% demonstrate efficient core operations typical of midstream infrastructure
- Operating cash flow of $983.8M exceeds capital expenditure, maintaining basic operational coverage
HESM Investment Risks to Consider
- Net income collapsed 48.5% YoY despite flat revenue, indicating deterioration below operating line (interest expense, taxes)
- Critical liquidity concern: only $1.9M cash against $3.8B long-term debt with current ratio of 0.85x suggests refinancing risk
- Flat revenue growth of 0.3% combined with high leverage and minimal cash reserves limits financial flexibility
Key Metrics to Watch
- Cash position and liquidity - critical given sub-$2M balance and current ratio below 1.0
- Net income drivers - understand the 48.5% decline and whether it reverses
- Debt refinancing schedule and covenant compliance given leverage position
HESM Financial Metrics
💡 AI Analyst Insight
The 44.9% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
HESM Profitability Ratios
HESM vs Energy Sector
How Hess Midstream LP compares to Energy sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is HESM Overvalued or Undervalued?
Based on fundamental analysis, Hess Midstream LP has mixed fundamental signals relative to the Energy sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
HESM Balance Sheet & Liquidity
HESM 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: Hess Midstream LP's revenue has grown significantly by 34% over the 5-year period, indicating strong business expansion.
HESM Growth Metrics (YoY)
HESM Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $377.6M | $58.6M | N/A |
| Q2 2025 | $364.6M | $49.5M | N/A |
| Q1 2025 | $354.7M | $44.6M | N/A |
| Q3 2024 | $362.5M | $35.3M | N/A |
| Q2 2024 | $323.5M | $25.1M | N/A |
| Q1 2024 | $304.3M | $20.7M | N/A |
| Q3 2023 | $334.2M | $23.2M | N/A |
| Q2 2023 | $313.0M | $22.0M | N/A |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
HESM Capital Allocation
HESM SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for Hess Midstream LP (CIK: 0001789832)
📋 Recent SEC Filings
❓ Frequently Asked Questions about HESM
What is the AI rating for HESM?
Hess Midstream LP (HESM) has an AI rating of HOLD with 68% confidence, based on fundamental analysis of SEC EDGAR filings.
What are HESM's key strengths?
Claude: Exceptional free cash flow generation of $728.2M with 44.9% FCF margin, providing cash for debt service. Strong operating margins of 62.2% demonstrate efficient core operations typical of midstream infrastructure.
What are the risks of investing in HESM?
Claude: Net income collapsed 48.5% YoY despite flat revenue, indicating deterioration below operating line (interest expense, taxes). Critical liquidity concern: only $1.9M cash against $3.8B long-term debt with current ratio of 0.85x suggests refinancing risk.
What is HESM's revenue and growth?
Hess Midstream LP reported revenue of $1.6B.
Does HESM pay dividends?
Hess Midstream LP does not currently pay dividends.
Where can I find HESM SEC filings?
Official SEC filings for Hess Midstream LP (CIK: 0001789832) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is HESM's EPS?
Hess Midstream LP has a diluted EPS of $0.00.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is HESM a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Hess Midstream LP has a HOLD rating with 68% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is HESM stock overvalued or undervalued?
Valuation metrics for HESM: ROE of N/A (sector avg: 14%), net margin of 21.8% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy HESM stock in 2026?
Our dual AI analysis gives Hess Midstream LP a combined HOLD rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is HESM's free cash flow?
Hess Midstream LP's operating cash flow is $983.8M, with capital expenditures of $255.6M. FCF margin is 44.9%.
How does HESM compare to other Energy stocks?
Vs Energy sector averages: Net margin 21.8% (avg: 12%), ROE N/A (avg: 14%), current ratio 0.85 (avg: 1.3).