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1. Company Snapshot

1.a. Company Description

Select Energy Services, Inc., an oilfield services company, provides water management and chemical solutions to the onshore oil and gas industry in the United States.The company operates through three segments: Water Services, Water Infrastructure, and Oilfield Chemicals.The Water Services segment provides water-related services, including water transfer, flow back and well testing, water containment, fluids hauling, water monitoring, and water network automation; technology solutions comprising hydrographic mapping, water volume and quality monitoring, remote pit and tank monitoring, leak detection, asset and fuel tracking, and automated-equipment services, as well as various on-site rental equipment and workforce accommodation services.


The Water Infrastructure segment develops, builds, and operates semi-permanent and permanent pipeline infrastructure solutions to support oil and gas well development.The Oilfield Chemicals segment develops, manufactures, and provides a suite of chemicals, water treatment solutions, and services used in hydraulic fracturing, stimulation, cementing, production, pipelines, and well completions, including polymers, viscosity, crosslinkers, friction reducers, surfactants, buffers, breakers, and other chemical technologies to pressure pumping service companies.This segment also offers production chemical solutions for underperforming wells and ancillary oilfield services comprising corrosion and scale monitoring, chemical inventory management, well failure analysis, and lab services.


Select Energy Services, Inc.was incorporated in 2016 and is headquartered in Houston, Texas.

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1.b. Last Insights on WTTR

Select Water Solutions' recent performance was driven by strong growth in its Chemical Technologies segment, with revenue and gross profit increasing 13% and 34%, respectively, in Q3 2025. The company also announced new long-term contracted Water Infrastructure projects in the Permian Basin, backed by 65,000 acres of leasehold and right-of-first-refusal acreage dedications. Additionally, its integrated recycling and dual-pipeline infrastructure, plus a new lithium-extraction project, are expected to fuel multiyear growth and revenue diversification. Brokerages have a "Moderate Buy" rating on the stock with a consensus target price of $14.25.

1.c. Company Highlights

2. Select Water Solutions' Q3 Earnings: Steady Margins Amidst Weaker Activity Environment

Select Water Solutions reported steady consolidated margins in Q3 2025 despite a weaker activity environment, driven by strong margins in the Water Infrastructure segment and improved Chemical Technologies margins. The company's Water Infrastructure revenue decreased 2.5% to $X, with margins of 53%, while Chemical Technologies achieved a sequential revenue increase of 13% and gross profit before D&A of $15.2 million, a 29% sequential increase. EPS came in at $0.03, in line with estimates. The company's cash flow from operations was $72 million, and growth CapEx increased to $95 million.

Publication Date: Dec -02

📋 Highlights
  • Steady Margins:: Consolidated margins remained stable at 53% in Water Infrastructure, despite a 2.5% revenue decline.
  • Chemical Technologies Growth:: Sequential revenue rose 13%, with gross profit before D&A hitting $15.2M (+29% QoQ).
  • CapEx Guidance:: 2025 net CapEx updated to $250M–$275M, with Q4 growth CapEx at $95M and ops cash flow at $72M.
  • Royalty Expansion:: Mineral extraction royalties projected at $2.5M/year (2027) and $5M/year post-refinery full capacity.

Segment Performance

The Water Infrastructure segment's strong margins were a highlight, with the company signing several new midstream contracts in the Permian Basin to add over 65,000 acres under long-term dedication. The company expects Water Infrastructure to grow by 10% in Q4 2025 and more than 20% in 2026. The Chemical Technologies segment saw sales increase 13% sequentially, with a 20% margin, driven by new product sales and market share gains.

Growth Opportunities

The company is well-positioned to capitalize on growing demand in the Haynesville Basin, with opportunities for new growth projects driven by increasing utilization of its existing assets. The Western Haynesville is expected to see increased activity, with the potential for similar levels of contract awards in Haynesville development, driven by the area's economic viability. The return profile of incremental capital deployed in the basin is expected to be attractive, particularly in brownfield development opportunities.

Valuation

With a P/E Ratio of 52.93 and an EV/EBITDA of 6.29, the market is pricing in a certain level of growth. Analysts estimate next year's revenue growth at -2.2%. The company's ROE is 2.5%, and ROIC is 1.65%. The current valuation multiples suggest that the market is expecting some level of improvement in the company's financial performance.

Strategic Outlook

Management remains confident in the company's strategic outlook, with a focus on delivering a streamlined water infrastructure-focused company with predictable and stable long-term earnings. The company plans to continue adding disposal capacity as needed to balance its overall system and is exploring mineral extraction, including lithium, with expected contributions to margin by 2030. With $140 million in capital allocated to growth initiatives, the company is well-positioned to capitalize on opportunities in the water infrastructure market.

3. NewsRoom

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Select Water Solutions: Water Infrastructure Outshines Completion Weakness

Dec -02

Source: seekingalpha.com

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Select Water Solutions, Inc. (NYSE:WTTR) Receives $14.25 Consensus Target Price from Brokerages

Nov -16

Source: defenseworld.net

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Select Water Solutions, Inc. (WTTR) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Compared to Estimates, Select Water Solutions, Inc. (WTTR) Q3 Earnings: A Look at Key Metrics

Nov -05

Source: zacks.com

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Select Water Solutions, Inc. (WTTR) Meets Q3 Earnings Estimates

Nov -04

Source: zacks.com

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Select Water Solutions Announces Third Quarter 2025 Financial and Operational Results and Other Strategic Updates

Nov -04

Source: prnewswire.com

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Select Water Solutions Announces Quarterly Cash Dividend of $0.07 Per Share

Oct -24

Source: prnewswire.com

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Select Water Solutions and Mariana Minerals Break Ground on Texas's First Commercial Produced Water Lithium Extraction Facility

Oct -22

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.76%)

6. Segments

Water Services

Expected Growth: 5.8%

Select Energy Services, Inc.'s Water Services segment growth of 5.8% is driven by increasing demand for water conservation and efficient management in the oil and gas industry, coupled with the company's strategic expansion into new markets and regions, as well as its focus on innovative water treatment technologies and services.

Chemical Technologies

Expected Growth: 5.5%

The 5.5% growth in Chemical Technologies from Select Energy Services, Inc. is driven by increasing demand for specialized chemicals in unconventional oil and gas production, coupled with the company's expansion into new markets and its focus on innovative, environmentally friendly solutions. Additionally, the segment benefits from the growing need for water conservation and recycling in the energy industry.

Water Infrastructure

Expected Growth: 6.2%

Select Energy Services, Inc.'s Water Infrastructure segment growth of 6.2% is driven by increasing demand for water conservation and recycling in the oil and gas industry, coupled with rising investments in infrastructure development and maintenance. Additionally, growing concerns over water scarcity and environmental sustainability are fueling demand for efficient water management solutions.

Eliminations

Expected Growth: 0.0%

With 0.0% growth, Eliminations from Select Energy Services, Inc. is stagnant. This is likely due to a lack of innovation, intense competition, and high operating costs. The company's inability to reduce costs, invest in research and development, and expand into new markets has hindered its growth.

7. Detailed Products

Water Solutions

Select Energy Services provides water solutions to the oil and gas industry, including water sourcing, transportation, and disposal services.

Fluid Handling

Our fluid handling services include the transportation, storage, and management of fluids used in the oil and gas industry.

Well Site Construction

Select Energy Services provides well site construction services, including site preparation, road construction, and pad construction.

Pipeline Services

Our pipeline services include pipeline construction, maintenance, and repair, ensuring the safe and efficient transportation of oil and gas products.

Frac Water Management

Select Energy Services provides frac water management services, including water sourcing, transportation, and disposal, to support hydraulic fracturing operations.

8. Select Energy Services, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Select Energy Services, Inc. operates in a niche market, providing water and chemical solutions to the oil and gas industry. While there are some substitutes available, they are not as effective or efficient, giving the company a moderate level of protection from substitutes.

Bargaining Power Of Customers

Select Energy Services, Inc. has a diverse customer base, with no single customer accounting for more than 10% of revenue. This reduces the bargaining power of customers, as they are not heavily dependent on any one supplier.

Bargaining Power Of Suppliers

Select Energy Services, Inc. relies on a few key suppliers for its water and chemical solutions. While the company has some bargaining power due to its size, suppliers still have some leverage, particularly in times of high demand.

Threat Of New Entrants

The oil and gas industry is highly regulated, and new entrants would need to invest heavily in infrastructure and comply with strict regulations. This barrier to entry reduces the threat of new entrants.

Intensity Of Rivalry

The oil and gas industry is highly competitive, with many established players competing for market share. Select Energy Services, Inc. must continually innovate and improve its services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 6.42%
Debt Cost 3.95%
Equity Weight 93.58%
Equity Cost 12.13%
WACC 11.61%
Leverage 6.86%

11. Quality Control: Select Energy Services, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Profire Energy

A-Score: 5.6/10

Value: 5.2

Growth: 7.1

Quality: 8.0

Yield: 0.0

Momentum: 9.5

Volatility: 4.0

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Ranger Energy Services

A-Score: 5.6/10

Value: 7.8

Growth: 6.3

Quality: 5.5

Yield: 2.0

Momentum: 7.5

Volatility: 4.3

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NOW

A-Score: 5.2/10

Value: 6.4

Growth: 5.9

Quality: 6.1

Yield: 0.0

Momentum: 7.5

Volatility: 5.3

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Select Energy Services

A-Score: 4.6/10

Value: 6.6

Growth: 5.9

Quality: 4.2

Yield: 3.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

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U.S. Silica Holdings

A-Score: 4.6/10

Value: 8.0

Growth: 6.9

Quality: 5.5

Yield: 0.0

Momentum: 5.0

Volatility: 2.3

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RPC

A-Score: 4.5/10

Value: 7.0

Growth: 5.8

Quality: 5.1

Yield: 4.0

Momentum: 1.0

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.24$

Current Price

11.24$

Potential

-0.03%

Expected Cash-Flows