GICS Sector : Energy
ProFrac Holding Corp., a vertically integrated and energy services company, provides hydraulic fracturing, completion, and other products and services to upstream oil and gas companies engaged in the exploration and production of North American unconventional oil and natural gas resources.It operates through three segments: Stimulation Services, Manufacturing, and Proppant Production.The company also manufactures and sells high horsepower pumps, valves, piping, swivels, large-bore manifold systems, seats, and fluid ends.
ProFrac Holding Corp.'s third-quarter financial performance reflected the challenging market conditions, with revenues declining to $403 million from $502 million in the previous quarter. The adjusted EBITDA margin contracted to 10% from 16% in Q2, resulting in an adjusted EBITDA of $41 million. The company's EPS came in at -$0.6, missing estimates of -$0.43. Free cash flow was negative $29 million, a significant deterioration from $54 million in Q2. As Austin Harbour, CFO, noted, "We've taken decisive actions to build a resilient platform poised to perform through the cycle."
Publication Date: Nov -23
The Stimulation Services segment faced operational challenges due to market dynamics, with effective utilization impacted by white space issues. However, the Proppant Segment, Alpine Silica, delivered relatively resilient performance, with revenues remaining flat compared to Q2. The company is prioritizing dedicated fleets paired with customers that provide more stable programs, which is expected to drive higher efficiency and improved control over operations.
ProFrac has implemented comprehensive cost and capital saving initiatives, aiming to achieve $100 million of annualized cash savings by the end of Q2 2026. The company has executed a headcount reduction, estimating $35 million to $45 million of annualized savings, and identified $30 million to $40 million of non-labor expenses to be streamlined. As Matthew Wilks stated, "Every one of these cuts is sustainable."
With a P/S Ratio of 0.27 and EV/EBITDA of 6.42, the market appears to be pricing in a challenging near-term outlook for ProFrac. Analysts estimate next year's revenue growth at -6.3%. Given the company's efforts to build a resilient business model and achieve cost savings, there is potential for improvement in profitability. However, the current valuation multiples suggest that the market is cautious about the company's prospects.
The Proppant Segment is expected to benefit from increasing volumes in the Haynesville and South Texas markets, which should have a positive impact on ASP and revenue. The company's focus on operational excellence at Alpine Silica positions it for margin expansion when market activity increases.
ProFrac: Debt Will Become An Issue If Demand Continues To Deteriorate
Nov -18
ProFrac Holding Corp. (ACDC) Reports Q3 Loss, Misses Revenue Estimates
Nov -11
ProFrac Holding Corp. (ACDC) Q3 2025 Earnings Call Transcript
Nov -10
Monday.Com, Metsera, Profrac Holding And Other Big Stocks Moving Lower In Monday's Pre-Market Session
Nov -10
ProFrac Holding Corp. Reports Third Quarter 2025 Results
Nov -10
New Strong Sell Stocks for Nov. 4
Nov -04
ProFrac Holding Corp. Announces Third Quarter 2025 Earnings Release and Conference Call Schedule
Oct -27
ProFrac Holding Corp. and Seismos to Introduce Supervised and Unsupervised Closed Loop Fracturing Across All U.S. Basins
Aug -18
ProFrac Holding Corp.'s Stimulation Services segment growth is driven by increasing demand for hydraulic fracturing services, rising oil prices, and growing production in the Permian Basin. Additionally, the company's focus on technology advancements, operational efficiency, and strategic acquisitions are contributing to its 9% growth rate.
ProFrac Holding Corp.'s 8% growth driven by increasing demand for frac sand, expansion into new markets, and strategic acquisitions. Additionally, operational efficiencies, cost savings, and a strong balance sheet contribute to the company's growth momentum.
ProFrac Holding Corp.'s 11% growth in proppant production is driven by increasing demand for frac sand in the Permian Basin, coupled with the company's strategic expansion into new markets, improved operational efficiencies, and a growing customer base. Additionally, the company's focus on research and development has led to the introduction of new, high-performance proppant products, further boosting growth.
ProFrac Holding Corp's 7% growth is driven by increasing demand for frac sand and logistics services, expansion into new basins, and growing adoption of electric frac fleets. Additionally, the company's focus on operational efficiency, cost savings, and strategic acquisitions are contributing to its growth momentum.
ProFrac Holding Corp.'s 12% growth in manufacturing is driven by increasing demand for frac sand and ceramic proppants, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on operational efficiency, cost reduction, and innovative product offerings have contributed to its growth. Furthermore, the rising need for oil and gas production, and the increasing adoption of hydraulic fracturing technology, have also fueled the company's growth.
ProFrac Holding Corp. offers a range of frac equipment, including pumps, blenders, and data vans, designed to optimize hydraulic fracturing operations.
ProFrac provides frac services, including frac design, execution, and optimization, to help operators maximize their well performance.
ProFrac offers wireline services, including logging, perforating, and pipe recovery, to support well intervention and completion operations.
ProFrac provides cementing services, including primary cementing, remedial cementing, and cement evaluation, to ensure wellbore integrity.
ProFrac offers coiled tubing services, including well intervention, cleanout, and milling, to optimize well performance and extend well life.
ProFrac provides frac fluids and chemicals, including guar-based and guar-free systems, to optimize hydraulic fracturing operations.
ProFrac Holding Corp. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the increasing competition in the oil and gas industry.
ProFrac Holding Corp. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are specialized, making it difficult for customers to switch to alternative suppliers.
ProFrac Holding Corp. relies on a few key suppliers for critical components, which gives them some bargaining power. However, the company's scale and diversified supply chain mitigate this risk.
The oil and gas industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants and allows ProFrac Holding Corp. to maintain its market position.
The oil and gas industry is highly competitive, with many established players competing for market share. ProFrac Holding Corp. must continually innovate and improve its products and services to maintain its competitive edge.
| Value | |
|---|---|
| Debt Weight | 46.11% |
| Debt Cost | 9.43% |
| Equity Weight | 53.89% |
| Equity Cost | 9.43% |
| WACC | 9.43% |
| Leverage | 85.56% |
Value: 9.0
Growth: 3.1
Quality: 4.2
Yield: 0.0
Momentum: 10.0
Volatility: 3.3
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