ProPetro Holding Corporation provides oilfield services. The company offers hydraulic fracturing and other complementary services, including cementing, acidizing, coiled tubing, flowback, and surface air drilling services to upstream oil and gas companies engaged in the exploration and production of North American unconventional oil and natural gas resources in the Permian Basin. The company was founded in 2007 and is based in Midland, Texas.
PUMP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for PUMP, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that ProPetro Holding Corp ranked in the 83th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. In terms of the factors that were most noteworthy in this DCF analysis for PUMP, they are:
100% of the company's capital comes from equity, which is greater than 97.36% of stocks in our cash flow based forecasting set.
The business' balance sheet suggests that 0% of the company's capital is sourced from debt; this is greater than merely 2.6% of the free cash flow producing stocks we're observing.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than only 13.73% of stocks in its sector (Energy).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
LBRT, TTI, BOOM, TOT, and CHX can be thought of as valuation peers to PUMP, in the sense that they are in the Energy sector and have a similar price forecast based on DCF valuation.
PUMP's Margin Can Weaken Source ProPetro Holding Corp. (PUMP) plans to increase fully utilized frac fleet deployment in Q3 compared to the Q2-average. Its ten-year contract with PXD following an asset acquisition transaction will serve as a cushion against the dip in activity and utilization. However, the delay in using...
Badsha Chowdhury on Seeking Alpha | August 20, 2020