ProFrac Holding (PFHC), mcap=$666m, price $16.14 vs $22.75

– Pure-play vertically integrated pressure pumper across multiple basins.
– Set to benefit from the expected multi-year upcycle in N.A. fracking activity.
– Fracking services capacity is constrained after years of rationalization due to weak commodity prices.
– Orphaned by investors and at a signific discount to peers due to its IPO (at $18/share) taking place during May’22 stock market lows.
– $PFHC relatively new fleet ranks favorably among peers adding a source of competitive advantage.
– Insiders have 65% economic and 96.5% voting interest.
– A good way to gain exposure to the N.A. energy cycle.

Valuation: Trades at a 1.7 turn discount to comps (on ‘22 numbers). At 5x 2023 EBITDA (in-line with peer valuations), would be $35.66 stock.

Exp. gain: +50% to $35/share over 6-18 months.

Full $PFHC write-up (free guest account required):

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