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Targa Resources, Inc.(TRGP)

F

Financial data as of Dec 31, 2025Declining · Energy

FCF Margin3.0%Free Cash Flow / Revenue
Cash Conversion203.7%Operating CF / Net Income
Free Cash Flow$584.1M
Revenue$17.0B
Net Cash-$17.4BNet debt position
Debt / FCF34.0xElevated debt burden
Current Ratio0.67Tight short-term liquidity
YoY FCF Growth-200.0%2 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseD
→
-2Extreme debt-to-FCF ratio (34.0x; 22.7x sector-adjusted)
→
-1Current ratio below 1.0 (0.67)
→
-1Negative FCF in 3 of last 4 quarters
→
-1Significant YoY FCF decline (-200.0%)
→
-1Only 2 positive quarters recently
→
-0.5Highly volatile FCF (consistency: 3.82)
→
-0.5Declining revenue (-10.2% YoY) with weak FCF margin
→
FinalF

Analysis Summary

Strengths

  • Excellent cash conversion (204%)

Concerns

  • Low FCF margin (3.0%)
  • Heavy debt position ($17.4B net debt, 34.0x FCF)
  • High debt-to-FCF ratio (34.0x)
  • Current ratio below 1.0 — tight short-term liquidity
  • Only 2 positive FCF quarters recently
  • Significant YoY FCF decline (-200.0%)
  • Highly volatile quarterly FCF
  • Revenue declining (-10.2% YoY)
Heavy CapEx — Operating cash flow is strong (23% margin) but most is reinvestedSBC-adjusted FCF used — $0.1B stock-based compensation (12% of reported FCF) subtracted

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin3.0%
Net Margin11.3%
Operating CF Margin23.0%
CapEx Ratio19.6%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash-$17.4BNet debt position
Debt / FCF34.0xElevated debt burden
Current Ratio0.67Tight liquidity
Debt / Equity5.71High leverage

Quarterly FCF Trend

-200.0% YoYDeclining (-200.0%)

Free cash flow per quarter

Sector Comparison — Energy

FCF Margin ranked against sector peers

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Detailed Metrics

Company NameTarga Resources, Inc.
SectorEnergy
Free Cash Flow$584.1M
Revenue$17.0B
Net Income$1.9B
Operating Cash Flow$3.9B
Capital Expenditure$3.3B
FCF Margin3.0%
Cash Conversion Rate203.7%
Net Margin11.3%
Total Debt$17.5B
Total Cash$166.1M
Net Cash-$17.4B
Current Ratio0.67
Debt / Equity5.71
Debt / FCF34.0x
YoY FCF Growth-200.0%
Positive Quarters2 of 5
Trend DirectionDeclining
Report DateDec 31, 2025
GradeF
Data SourceYahoo Finance

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