ProPetro Holding Corp (PUMP, Financial), a key player in the Oil & Gas sector, has recently seen a notable increase in its stock price, gaining 7.44% over the past week and an impressive 21.94% over the past three months. This surge in stock price has brought the company's market capitalization to approximately $1.04 billion. Currently, the GF Value of ProPetro is calculated at $12.68, suggesting that the stock is modestly undervalued compared to its intrinsic value, which has risen from $11.41 three months ago. This valuation indicates a potential for further price appreciation, aligning with the company's recent performance trajectory.
Overview of ProPetro Holding Corp
Based in Texas, ProPetro Holding Corp specializes in providing essential services such as hydraulic fracturing, wireline, and cementing, primarily to the oil and gas sectors in North America, with a focus on the Permian Basin. The company's primary revenue comes from its hydraulic fracturing segment. This strategic focus on high-demand services within the booming Permian Basin positions ProPetro advantageously in the energy sector.
Assessing ProPetro's Profitability
ProPetro's financial health is reflected in its Profitability Rank of 5/10, indicating average industry profitability. The company's Operating Margin stands at 10.95%, which is higher than 56.85% of its peers. Additionally, ProPetro boasts a Return on Equity (ROE) of 7.66% and a Return on Assets (ROA) of 5.25%, both metrics showcasing its capability to outperform nearly half of its competitors. The Return on Invested Capital (ROIC) is particularly strong at 10.97%, surpassing 76.2% of industry peers. These figures highlight ProPetro's efficient management and robust operational strategies.
Growth Prospects of ProPetro
ProPetro's Growth Rank is an impressive 7/10, reflecting strong potential for future expansion. The company has demonstrated a significant 3-Year Revenue Growth Rate per Share of 22.50%, outperforming 60.14% of its industry peers. Despite a 5-Year Revenue Growth Rate per Share of -8.10%, it still ranks better than 17.25% of competitors. Looking ahead, ProPetro's estimated Total Revenue Growth Rate for the next 3 to 5 years is 8.70%, which is superior to 74.92% of its competitors, indicating promising growth ahead.
Key Stakeholders in ProPetro
ProPetro's stock is held by notable investors, which underscores confidence in the company's market strategy and future outlook. Ken Fisher (Trades, Portfolio) is the top holder with 1,551,124 shares, representing 1.42% of the shares. Following him are HOTCHKIS & WILEY and Chuck Royce (Trades, Portfolio), holding 0.8% and 0.44% of the shares, respectively. These investments reflect a strong endorsement from savvy market players.
Comparative Analysis with Competitors
ProPetro operates in a competitive landscape with major players like Dnow Inc (DNOW, Financial) with a market cap of $1.58 billion, Atlas Energy Solutions Inc (AESI, Financial) at $2.57 billion, and Kodiak Gas Services Inc (KGS, Financial) at $2.48 billion. Despite the stiff competition, ProPetro's recent performance and growth prospects position it well within this challenging sector.
Conclusion
In conclusion, ProPetro Holding Corp's recent stock price rally can be attributed to its strategic operations in the Permian Basin, robust profitability metrics, and promising growth outlook. The company's current valuation suggests it is modestly undervalued, offering potential for further gains. Investors would do well to keep an eye on ProPetro as it continues to navigate the dynamic oil and gas industry landscape.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
