KGS · Kodiak Gas Services, Inc.

The thesis

Kodiak Gas Services is still pivoting from natural-gas compression into power for data centers, but the shares closed at $47.45 on 27 October 2026, under the $50 invalidation level in the previous note, and the Q3 2026 report in early November decides whether power revenue and the $830-860 million adjusted EBITDA guidance hold. The close was 37.3% below the 52-week high of $75.70 and down 17.9% over three months (adjusted daily closes).

Two more brokers cut targets since the last note and both kept positive ratings. RBC Capital lowered its target to $82 on 16 October 2026 and kept Outperform. B of A Securities lowered its target to $74 on 27 October 2026 and kept Buy. Barclays ($67), Jefferies ($65) and Citigroup ($82) had cut earlier in October and also kept positive ratings.

The operating facts are unchanged from the 21 September 2026 contract news and the Q2 report. Kodiak signed a six-year, 76 megawatt (MW) behind-the-meter power agreement with a West Texas data center, with revenue expected from Q1 2027 (company release via Stock Titan). Q2 2026 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $216.8 million, up 22% year over year (Q2 earnings release, 6 August 2026).

The narrative is maturing: the contract news is well known and the price has kept falling since it, from $58.73 on 18 September 2026 to $47.45 on 27 October 2026. The 14-day Relative Strength Index (RSI), a gauge of recent momentum, read 29.7 on 27 October 2026, below the 30 level usually read as oversold. On 27 October 2026 Kodiak announced its Q3 earnings release and conference call details; the schedule itself could not be read, and third-party calendars estimate 3 November to 5 November 2026.

Bullish and bearish views on Kodiak Gas Services, Inc.

The bull case on Kodiak Gas Services, Inc. (KGS), in brief: Brokers keep positive ratings. The bear case: The shares keep falling without company news.

Bull case

• Brokers keep positive ratings. B of A (Buy, $74), RBC (Outperform, $82), Citigroup (Buy, $82), Barclays (Overweight, $67) and Jefferies (Buy, $65) all kept positive ratings between 5 October 2026 and 27 October 2026, with every target above the $47.45 close.
• A second long-term power contract exists. The 21 September 2026 agreement covers 76 MW for six years. Chief executive Mickey McKee said about half of the current power portfolio is under long-term contracts (company release, 21 September 2026).
• Counterparty credit looks strong. The data-center operator is contracted with an investment-grade-rated hyperscaler, and a graphics-chip designer guarantees the lease (company release, 21 September 2026).
• Compression funds the pivot. Q2 2026 Compression Infrastructure revenue was $315.1 million, utilization 98.2% and average pricing $23.80 per horsepower (Q2 earnings call, 7 August 2026).
• Power margins were high in the first full quarter. Power Infrastructure had 405 MW of fleet, 363 MW revenue-generating, 89.6% utilization and a 64.5% adjusted gross margin on $32.9 million of revenue (Q2 earnings call, 7 August 2026).

Bear case

• The shares keep falling without company news. The adjusted close was $50.07 on 14 October 2026 and $47.45 on 27 October 2026, after $58.73 on 18 September 2026.
• Targets are being cut across the board. Five brokers have lowered targets since 5 October 2026. Jefferies' $65 is the lowest of the five.
• Resale supply is registered. Kodiak filed a prospectus on 28 September 2026 for the resale of up to 2,401,278 common shares by selling stockholders. Kodiak receives no proceeds from those resales.
• Earnings trail EBITDA. Q2 2026 adjusted net income was $0.55 per diluted share against a $0.67 consensus, while adjusted EBITDA rose 22% (Q2 release, 6 August 2026).
• The new contract is small against the goal. The 76 MW deal compares with the company's stated target of two gigawatts of power by 2030, and Kodiak disclosed no financial terms (company release, 21 September 2026).

Price setup

The adjusted close of $47.45 on 27 October 2026 is 37.3% under the 52-week high of $75.70. The 14-day RSI of 29.7 shows heavy recent selling; it was 39.3 on 14 October 2026 and 22.3 on 1 October 2026, so momentum has reset twice in a month without a lasting recovery.

The $59 level named in the earlier note has been broken, and so has the $50 level that closed the previous note's case. No prior low below $47.45 is established in the data reviewed for this note, so the next reference is a round number, $44.

Crowding evidence is limited. The shares sit far below their highs rather than above a rising average. Registered resale stock from the 28 September 2026 prospectus is a source of supply, and the earnings report is days away.

Catalysts, next 30 days

• Through 31 March 2027: deployment for the 76 MW contract. About 40 gas-engine units deploy from Q4 2026 into Q1 2027, with revenue expected from Q1 2027. Delays would push power earnings later.

Elapsed catalysts

• ~5 November 2026, est.: Q3 2026 earnings release. Kodiak announced the schedule on 27 October 2026, but the date could not be confirmed. Third-party calendars estimate 3 November to 5 November 2026; the 2025 Q3 release fell on 4 November 2025. The report shows whether revenue-generating power capacity has grown beyond 363 MW and whether the $830-860 million guidance holds. (passed 1d ago)
• Any 8-K on a new long-term power contract. Signed contracts are disclosed by 8-K; none is known since 21 September 2026. (passed 46d ago)

What would change the view

The case breaks if the Q3 report cuts the $830-860 million adjusted EBITDA guidance, shows revenue-generating power capacity still near 363 MW, or reports Q2-style adjusted earnings misses again. A downgrade from Buy, Overweight or Outperform by any of the five brokers above would also weaken it. The case strengthens if Q3 shows power capacity growth and a further signed contract by 8-K, since the shares already trade well below every broker target.

A daily close below $44 would end the view on price grounds.

What it trades with

Kodiak's compression business depends on Permian natural-gas volumes, so Permian drilling activity and gas prices move its earnings. Its power business ties the shares to data-center build-out spending and to the equipment supply chain, including the roughly 1.8 gigawatts of generation under the Baker Hughes framework, which is an equipment pathway rather than signed backlog. No correlation figures were measured for this note.