PUMP: Distributed Power Expansion And Completed Buyback Will Support Shares Ahead

Analysts have raised their fair value estimate for ProPetro Holding to approximately $13.11 from about $12.11 per share, reflecting a slightly lower discount rate and modestly stronger long term revenue expectations, even as they factor in compressed profit margins and a significantly higher future P E multiple suggested by recent mixed rating and price target revisions across the Street.

Analyst Commentary

Street research on ProPetro Holding has turned more polarized in recent weeks, with valuation targets moving sharply higher even as opinions diverge on the durability of the current cycle and the company’s ability to sustain improved economics.

Bullish Takeaways

• Bullish analysts highlight the significant upward resets in price targets, with some now seeing mid teens upside that implies confidence in the company’s execution on fleet utilization and cost control.
• Recent upgrades point to a stronger growth profile than previously assumed, with expectations that improving sector momentum and potential international activity could support higher revenue trajectories into 2026.
• The move from low single digit to double digit target prices suggests that the market is beginning to factor in structurally higher returns on capital and a more resilient cash flow profile than in prior down cycles.
• Supportive views also emphasize that, even after the rerating, the stock still trades at a discount to peers on forward earnings and cash flow multiples if current margin levels can be defended.

Bearish Takeaways

• Bearish analysts argue that much of the near term upside has already been captured, with recent appreciation leaving less margin of safety relative to the cyclical and commodity exposed nature of the business.
• Concerns focus on a softening completions backdrop, including double digit declines in frac fleets, which could pressure activity levels, weaken pricing power, and cap near term earnings growth.
• The view that distributed power and related themes are now fully reflected in current valuations raises the risk of multiple compression if sector sentiment or utilization trends deteriorate.
• Some caution that the higher valuation framework now being applied rests on optimistic assumptions for both activity and pricing over the next several quarters, leaving the stock vulnerable if execution or market demand disappoints.

What's in the News

• PROPWR division signs turnkey power contract with a Coterra Energy subsidiary to develop distributed microgrids across the New Mexico Permian Basin, with deployment and operations slated to begin in the first quarter of 2026 (Key Developments)
• PROPWR now has over 220 megawatts under contract with a weighted average contract term of about five years, and its portfolio is roughly 70% high efficiency natural gas reciprocating generators and 30% low emissions modular turbines (Key Developments)
• PROPWR expects all currently ordered units to be delivered by year end 2027, targeting approximately 750 megawatts delivered by year end 2028 and one gigawatt or more by year end 2030, at an average cost of about $1.1 million per megawatt including balance of plant (Key Developments)
• Projected 2026 capital expenditures for PROPWR have been raised to between $250 million and $275 million, up from prior guidance of $200 million to $250 million. The increase reflects additional equipment orders and expected incremental capacity (Key Developments)
• ProPetro has completed the repurchase of 12,989,615 shares, representing 11.82 percent of shares outstanding for $110.82 million, under its buyback program announced on May 17, 2023, with no shares repurchased in the July 1 to September 30, 2025 tranche (Key Developments)

Valuation Changes

• Fair Value Estimate has risen modestly to approximately $13.11 per share from about $12.11.
• Discount Rate has edged lower to roughly 7.35 percent from about 7.36 percent, indicating a slightly reduced risk profile in the model.
• Revenue Growth Assumption has increased slightly to around 5.88 percent from about 5.84 percent.
• Net Profit Margin has fallen significantly to roughly 1.33 percent from about 3.81 percent, reflecting expectations for more compressed profitability.
• Future P/E Multiple has expanded sharply to about 84.0x from roughly 27.1x, implying a much higher valuation framework applied to forward earnings.