📊 HESM Key Takeaways
Is Hess Midstream LP (HESM) a Good Investment?
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.
Hess Midstream generates strong cash flows with a 62% operating margin and ~45% FCF margin, indicating efficient, fee-based operations and ample internal funding capacity. However, flat revenue and a sharp YoY net income decline alongside high leverage and sub-1x liquidity temper the outlook, making balance sheet resilience and earnings quality key watchpoints.
Why Buy Hess Midstream LP Stock? 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
- High operating margin with robust FCF ($728M, ~45% margin)
- Strong cash conversion with moderate capex (~26% of OCF)
- Stable midstream model supporting predictable operating cash flow
HESM Stock Risks: Hess Midstream LP Investment Risks
- 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
- Elevated leverage ($3.77B LT debt) and weak liquidity (0.85x current ratio)
- Large YoY net income decline suggests earnings quality/volatility risk
- Concentration and regulatory/throughput risks typical of basin-focused midstream
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
- Net debt/EBITDA
- Interest coverage ratio
Hess Midstream LP (HESM) Financial Metrics & Key Ratios
💡 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 Profit Margin, ROE & Profitability Analysis
HESM vs Energy Sector: How Hess Midstream LP Compares
How Hess Midstream LP compares to Energy sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Hess Midstream LP Stock Overvalued? HESM Valuation Analysis 2026
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.
Hess Midstream LP Balance Sheet: HESM Debt, Cash & Liquidity
HESM Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Hess Midstream LP's revenue has grown significantly by 34% over the 5-year period, indicating strong business expansion.
HESM Revenue Growth, EPS Growth & YoY Performance
HESM Quarterly Earnings & 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.
Hess Midstream LP Dividends, Buybacks & Capital Allocation
HESM SEC Filings: Latest 10-K & 10-Q 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 a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 69% combined 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. ChatGPT: High operating margin with robust FCF ($728M, ~45% margin). Strong cash conversion with moderate capex (~26% of OCF).
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. ChatGPT: Elevated leverage ($3.77B LT debt) and weak liquidity (0.85x current ratio). Large YoY net income decline suggests earnings quality/volatility 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 69% 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).