GICS Sector : Energy
Solaris Oilfield Infrastructure, Inc.designs, manufactures, and sells mobile equipment to unload, store, and deliver proppant, water, and chemicals at oil and natural gas well sites in the United States.It is involved in the transloading and storage of proppant or railcars at its transloading facility.
Solaris reported a strong second quarter, driven by significant growth in its Power Solutions segment, which generated $46 million in adjusted EBITDA, a 43% increase from the first quarter. The company's earnings per share (EPS) came in at $0.19, beating estimates of $0.14. The Power Solutions segment served an average of 600 megawatts of capacity, up 50% from the first quarter, and is expected to maintain at least this level in the third quarter. The Logistics Solutions segment reported $15 million in adjusted EBITDA, a slight decline due to lower drilling activity.
Publication Date: Sep -04
The company's financial guidance for the third and fourth quarters projects adjusted EBITDA of $58 million to $63 million, relatively flat from the second quarter. Solaris raised $155 million through senior convertible notes and secured a $550 million senior secured loan facility for its joint venture, Stateline Power, which will co-own and operate approximately 900 megawatts of capacity. The company's current valuation metrics indicate a P/E Ratio of 46.92, P/B Ratio of 2.82, and EV/EBITDA of 15.44, suggesting a premium valuation.
The growth in Power Solutions was fueled by new equipment deliveries and third-party sourcing, with key highlights including the acquisition of Mobile Energy Rentals, strong demand across various industries, and proprietary modifications to Selective Catalytic Reduction systems. The company is optimistic about the microgrid market, especially in the oil and gas and data center sectors, where they have strong relationships and see attractive pricing and tenure.
The Logistics Solutions business is expected to decline slightly in Q3, but the company is focused on operational levers and efficiency initiatives to mitigate the impact without compromising quality or safety. Solaris is seeing increasing industry recognition for its value proposition in providing reliable power, particularly for data centers, and is actively exploring partnerships to leverage complementary skills and assets.
Analysts estimate next year's revenue growth at 7.1%, driven by the company's expanding Power Solutions business and sustained cash flow from Logistics operations. Solaris is strategically evaluating whether to build or buy certain balance-of-plant components to optimize its offerings, and is well-positioned to capitalize on the growing demand for reliable power solutions.
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Wellsite Services from Solaris Oilfield Infrastructure, Inc. growth driven by increasing demand for efficient wellsite management, rising oil prices, and growing adoption of digital technologies. Additionally, Solaris' innovative solutions, such as its patented Mobile Proppant Management system, are enhancing operational efficiency and reducing costs for customers, further fueling growth.
Solaris Oilfield Infrastructure's 3.5% growth is driven by increasing demand for its innovative oilfield equipment and services, expansion into new basins, and strategic partnerships. Additionally, the company's focus on reducing costs and improving operational efficiency has contributed to its growth. Furthermore, the rising need for oil and gas companies to optimize their operations and reduce environmental impact has also boosted demand for Solaris' solutions.
A mobile system designed to reduce costs and increase efficiency in proppant logistics, allowing for real-time inventory management and automated reporting.
A modular, self-contained system for storing and managing proppant, designed to increase efficiency and reduce costs in proppant logistics.
A proprietary automation technology designed to optimize proppant loading and unloading, reducing costs and increasing efficiency.
A cloud-based system providing real-time visibility into proppant inventory levels, allowing for optimized logistics and reduced costs.
A range of storage solutions designed to optimize proppant storage, reduce costs, and increase efficiency.
The threat of substitutes for Solaris Oilfield Infrastructure, Inc. is moderate due to the availability of alternative oilfield services and equipment providers.
The bargaining power of customers is low due to the specialized nature of oilfield services and the lack of alternative suppliers.
The bargaining power of suppliers is moderate due to the presence of multiple suppliers of oilfield equipment and services, but the company's dependence on a few key suppliers.
The threat of new entrants is low due to the high barriers to entry in the oilfield services industry, including the need for specialized equipment and expertise.
The intensity of rivalry is high due to the competitive nature of the oilfield services industry, with multiple players competing for market share.
| Value | |
|---|---|
| Debt Weight | 14.11% |
| Debt Cost | 8.32% |
| Equity Weight | 85.89% |
| Equity Cost | 10.28% |
| WACC | 10.00% |
| Leverage | 16.43% |
Value: 7.8
Growth: 6.3
Quality: 5.5
Yield: 2.0
Momentum: 7.5
Volatility: 4.3
1-Year Total Return ->
Value: 6.4
Growth: 5.9
Quality: 6.1
Yield: 0.0
Momentum: 7.5
Volatility: 5.3
1-Year Total Return ->
Value: 6.6
Growth: 5.9
Quality: 4.2
Yield: 3.0
Momentum: 4.0
Volatility: 4.0
1-Year Total Return ->
Value: 8.0
Growth: 6.9
Quality: 5.5
Yield: 0.0
Momentum: 5.0
Volatility: 2.3
1-Year Total Return ->
Value: 2.9
Growth: 6.2
Quality: 6.7
Yield: 5.0
Momentum: 5.0
Volatility: 1.7
1-Year Total Return ->
Value: 7.0
Growth: 5.8
Quality: 5.1
Yield: 4.0
Momentum: 1.0
Volatility: 4.0
1-Year Total Return ->