ONT · Onterris
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $16.00
Note written ·
Price against the kill line
45.2% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $16.00, on record since 10 November 2026. The shares are up 44.8% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $16.00, under the 50-day moving average, which would erase the gain since the 4 November 2026 third-quarter report. The board ending its review with no transaction, or fourth-quarter operating cash flow under $30.0M, would also break the case.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 203
- Revenue, change on a year (%)
- −9.7
- Gross margin (%)
- 43.5
- Operating margin (%)
- 6.0
- Free cash flow, four quarters ($M)
- 69.8
- Net cash, cash less debt ($M)
- −302
- Enterprise value to sales (×)
- 1.5
- Enterprise value to operating income (×)
- 110.8
All filed numbers
What Onterris reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 203 | −9.7 | 43.5 | 6.0 |
| first filed | 187 | −20.4 | 44.1 | 3.5 |
| first filed | 169 | −5.2 | 39.8 | −3.6 |
| first filed | 193 | +2.2 | 38.6 | −1.3 |
| first filed | 225 | +25.9 | 39.4 | 4.4 |
| first filed | 235 | +35.3 | 43.4 | 6.4 |
| Pre-tax income ($M) | 11.3 |
| Net income ($M) four quarters: −10.6 | 9.0 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −4.8 |
| Operating cash flow ($M) | 87.3 |
| Capital spending ($M) | 17.6 |
| Free cash flow ($M) | 69.8 |
| Cash and short-term investments ($M) | 20.1 |
| Debt ($M) long-term debt and finance leases | 322 |
| Net cash, cash less debt ($M) | −302 |
| Deferred revenue ($M) −28.6% on a year | 9.9 |
| Backlog, orders not yet delivered ($M) −36.6% on a year | 45.3 |
| Receivables ($M) | 129 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 450 |
| Market value ($M) | 817 |
| Enterprise value, market value plus net debt ($M) | 1,119 |
| Enterprise value to sales (×) | 1.5 |
| Enterprise value to operating income (×) | 110.8 |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 1.8 |
| Free-cash-flow yield (%) | 8.5 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 13.0% of shares outstanding sold short, 5.7 days of average trading to cover, −2.5% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $610K | $2.9M |
The thesis
Onterris's shares trade on its board-led strategic review and on a third-quarter cash flow recovery. The review has drawn in outside strategic and financial parties, and the rating is Medium because those two supports outweigh a price that already sits above the only post-report analyst target. Whether the review produces a transaction, and whether fourth-quarter operating cash flow lands in the $30.0M–$40.0M guidance, settles the case.
The shares closed at $23.08 on 12 November 2026, above Barclays' $19 Equal-Weight target of 6 November 2026, per Benzinga. At that price the market already assigns a meaningful chance to a deal. The shares are up 31.0% over three months, and their highest close since the report was $23.66 on 10 November 2026.
The company's 4 November 2026 release says it does not plan to comment further on the review unless disclosure becomes appropriate or necessary. Quiet weeks with no review headline are therefore likely. The case turns on two dated tests: a company statement on the review's outcome, and the fourth-quarter report, estimated for late February 2027.
Bullish and bearish views on Onterris, Inc.
The bull case on Onterris, Inc. (ONT), in brief: the review has reached outside parties. The bear case: no transaction is promised.
Bull case
- The review has reached outside parties. The 4 November 2026 release says the company has engaged with a number of strategic and financial parties. It has hired Evercore and AEC Advisors as financial advisors and Kirkland & Ellis as legal counsel.
- An unnamed holder has been accumulating shares. On 5 August 2026 the board adopted a one-year rights plan in response to "significant and undisclosed accumulation of Onterris shares and derivative securities." The company has not named the party.
- Cash flow recovered in the third quarter. Operating cash flow was $40.9M, up from $28.1M a year earlier, per the 4 November 2026 release. Leverage fell to 2.9 times at 30 September 2026 from 3.2 times at 30 June 2026, and the company still guides to about 2.5 times at year-end.
- Margins rose while reported revenue fell. Third-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $35.9M, a 17.7% margin, against 15.0% a year earlier. Benzinga reported on 4 November 2026 that adjusted earnings per share of $0.56 and revenue of $203.0M beat estimates of $0.10 and $197.1M.
- Capital returns and bolt-ons continue. The 4 November 2026 release says year-end guidance includes $30.0M of share repurchases. It also puts funding for recently completed acquisitions at $13.9M; company news reported EcOz Environmental Consultants on 8 November 2026 and Permian Basin Environmental Lab on 9 November 2026.
Bear case
- No transaction is promised. The 4 November 2026 release says the board has set no timetable and gives no assurance of any transaction or other outcome. Much of the rise since the report rests on the review, so an end without a deal would remove that support.
- The price sits above the post-report target. The $23.08 close of 12 November 2026 is above Barclays' $19 target of 6 November 2026, the only analyst target published since the third-quarter report, per Benzinga.
- The August guidance cut was large. On 5 August 2026 the company cut 2026 revenue guidance to $740.0M–$790.0M from $840.0M–$900.0M and adjusted EBITDA guidance to $117.0M–$120.0M from $125.0M–$130.0M. It reaffirmed the lower ranges on 4 November 2026.
- Nine-month cash flow still trails last year. Operating cash flow for the first nine months of 2026 was $35.4M, down from $55.5M a year earlier, per the 4 November 2026 release. The third-quarter 10-Q shows a nine-month net loss of $2.3M.
- The run has started to cool. After closing at $23.66 on 10 November 2026, the shares closed lower on 11 November 2026 and 12 November 2026, ending at $23.08, with no new review update in company news.
Price setup
The shares closed at $23.08 on 12 November 2026. The post-report run went from $19.42 on 5 November 2026, the first session after the report, to $21.92 on 6 November 2026 and $23.66 on 10 November 2026. The 3-month change is 31.0%.
On adjusted daily closes, the 50-day moving average is $16.27 and the 200-day moving average is $19.24 as of 12 November 2026. The shares trade above both. The 200-day average and the $19.42 close of 5 November 2026 sit close together and mark the nearest reference below the market.
The 52-week closing low was $12.71 on 2 October 2026. The 52-week intraday high was $30.00 on 2 March 2026, and the last close is 23.1% below it. With no earnings report due until about late February 2027, review headlines and acquisition news are the main things that move the price.
Catalysts ahead
- ~25 February 2027 (est.): Fourth-quarter and full-year 2026 report. It shows whether operating cash flow reached the $30.0M–$40.0M guidance and whether year-end leverage reached about 2.5 times.
- 4 August 2027: Stockholder rights plan expires unless terminated earlier. The plan shields the review from an unnamed accumulating holder; its end or early termination would change who can build a controlling stake.
What would change the view
A daily close below $16.00, under the 50-day moving average, which would erase the gain since the 4 November 2026 third-quarter report. The board ending its review with no transaction, or fourth-quarter operating cash flow under $30.0M, would also break the case.
The risks this note tracks, each with what would confirm it:
- The strategic review ends with no transaction and the review premium leaves the shares. Confirmed by: a company statement that the board has concluded the review with no sale or other transaction.
- The cash flow recovery falls short after the third-quarter improvement. Confirmed by: fourth-quarter operating cash flow under $30.0M or year-end leverage clearly above about 2.5 times.
- Revenue weakness extends beyond emergency response and pass-through work. Confirmed by: a further cut to the $740.0M–$790.0M 2026 revenue guidance or a weak 2027 outlook at the next report.
- Analysts keep valuing the business below the share price, leaving the price dependent on a deal. Confirmed by: new targets published after 4 November 2026 holding below $20 while the review produces no update.
What it trades with
The shares trade mostly on news specific to Onterris: review headlines, acquisitions and quarterly cash flow. They follow the broad market less closely. The business is environmental testing, consulting, remediation and emergency response, which ties part of its revenue to industrial, energy and regulatory activity, including the Permian Basin oil field through the newly acquired Midland, Texas lab. Within the Cyclical industrials group it shares only broad industrial sentiment with TrueBlue, Columbus McKinnon, Resideo, FTAI Infrastructure, Hayward and Latham Group; TrueBlue rose 21.95% intraday on 5 November 2026, per Benzinga, while Onterris moved on its own report. Onterris was formerly Montrose Environmental Group, ticker MEG, so older price history and research appear under that name.
The evidence, claim by claim (8)
- Third-quarter revenue was $203.0M against $224.9M a year earlier; the company says it rose about 13.1% excluding a $45.4M single recovery event in the prior-year quarter. Onterris Form 8-K earnings release, 4 November 2026 · as of
- Third-quarter adjusted EBITDA was $35.9M, a 17.7% margin, against $33.7M and 15.0% a year earlier. Onterris Form 8-K earnings release, 4 November 2026 · as of
- Third-quarter operating cash flow was $40.9M against $28.1M a year earlier; nine-month operating cash flow was $35.4M against $55.5M. Onterris Form 8-K earnings release, 4 November 2026 · as of
- Leverage was 2.9 times at 30 September 2026, down from 3.2 times at 30 June 2026; the company guides to about 2.5 times at year-end, including $30.0M of share repurchases. Onterris Form 8-K earnings release, 4 November 2026 · as of
- Fourth-quarter 2026 operating cash flow guidance is $30.0M to $40.0M. Onterris Form 8-K earnings release, 4 November 2026 · as of
- The company engaged Evercore and AEC Advisors as financial advisors and Kirkland & Ellis as legal counsel, and has engaged with a number of strategic and financial parties. Onterris Form 8-K earnings release, 4 November 2026 · as of
- The 10-Q lists the acquisitions of EcOz Environmental Consultants and Permian Basin Environmental Lab as subsequent events; terms were not disclosed. Onterris Form 10-Q for the quarter ended 30 September 2026 · as of
- Barclays maintained an Equal-Weight rating on Onterris and raised its price target to $19. Benzinga, 6 November 2026 · as of
Sources
- Onterris, Inc. - Form 8-K - FY2026 (2026-11-04) · sec.gov ·
- Onterris Reports Third Quarter Results, Reiterates Full-Year 2026 Guidance, Announces Completed Acquisitions, and Provides Update on Board-led Strategic Review Process · finance.yahoo.com ·
- Onterris, Inc. - Form 10-Q - FY2026 · sec.gov
- Onterris, Inc. - Form 8-K - FY2026 (2026-08-05) · sec.gov ·
- Onterris Reports Second Quarter Results, Updates Full-Year 2026 Guidance, and Announces Board-led Strategic Review Process · ir.onterris.com
- Onterris Q3 2026 Earnings Call Transcript · benzinga.com
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