Modern Lower-Emission Frac Equipment Will Support North American Energy Independence

Key Takeaways

• Investment in advanced, lower-emission equipment and new business lines positions ProPetro to capture premium contracts, improve fleet use, and enhance gross margins.
  
• Structural industry trends and disciplined capital allocation support steady demand, higher utilization, and stronger returns, driving robust earnings and shareholder value growth.
  
• Reliance on traditional oilfield services, geographic concentration, capital intensity, and industry headwinds threaten ProPetro’s long-term growth, profitability, and cash flow stability.

Catalysts

Operates as an integrated oilfield services company.

• Sustained investment in next-generation, lower-emission dual-fuel and electric frac equipment positions ProPetro to secure long-term contracts with top-tier E&Ps, boosting fleet utilization and enabling premium pricing, which should directly enhance both topline revenue and gross margins over the coming years.
  
• The accelerating buildout and commercial ramp of Pro Power, with 220 megawatts of mobile natural gas generation targeted by mid-2026 and strong contract demand already materializing, is poised to create a new high-growth, high-visibility business line, driving step-change improvements in EBITDA and free cash flow.
  
• The ongoing trend of U.S. energy independence and continued steady shale capital expenditures by operators supports consistent demand for pressure pumping and related services, enabling ProPetro to maintain steady activity levels and defend or grow its share in the most active basin, underpinning robust revenue and earnings growth potential.
  
• Industry consolidation and underinvestment in global oil supply outside North America are expected to tighten market conditions and create supply discipline, allowing leading pressure pumping firms like ProPetro to benefit from higher utilization rates, healthier pricing, and ultimately improved net profit margins.
  
• Continued operational optimization and disciplined capital allocation—including reduced maintenance CapEx, successful cost containment, and further share repurchases backed by resilient free cash flow—reinforce the company's ability to improve return on capital and drive outsized EPS growth for shareholders in the medium and long term.

ProPetro Holding Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on ProPetro Holding compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming ProPetro Holding's revenue will grow by 5.7% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from -10.6% today to 11.5% in 3 years time.
• The bullish analysts expect earnings to reach $190.5 million (and earnings per share of $0.37) by about July 2028, up from $-148.2 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 7.4x on those 2028 earnings, up from -4.6x today. This future PE is lower than the current PE for the US Energy Services industry at 11.9x.
• Analysts expect the number of shares outstanding to decline by 0.24% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.46%, as per the Simply Wall St company report.

ProPetro Holding Future Earnings Per Share Growth

Risks

• The accelerating global transition toward renewable energy and ongoing decarbonization efforts signal shrinking long-term demand for traditional oilfield services, which may significantly curtail ProPetro’s addressable market and limit the company’s ability to grow its revenue over time.
  
• The company’s continued heavy geographic concentration in the Permian Basin exposes it to customer concentration and basin-specific risks, meaning a regional downturn or shift in activity could negatively impact both revenue and earnings stability for ProPetro.
  
• While investments in FORCE electric fleets and Pro Power represent a push toward modernization, ProPetro’s business remains highly capital intensive; ongoing fleet upgrades, electrification, and power equipment orders risk increasing capital expenditures and suppressing free cash flow if returns or utilization rates do not meet expectations.
  
• The hydraulic fracturing sector, including ProPetro, faces persistent margin compression as competition intensifies and pricing in spot and diesel markets remains under pressure, which could weigh on net margins if ProPetro cannot further differentiate or lower costs versus its peers.
  
• Secular macro trends such as electric vehicle adoption and more efficient drilling leading to fewer wells drilled may reduce the overall volume of fracturing jobs required over the next decade, acting as a structural drag on long-term revenue and asset utilization, even if ProPetro’s current contracts appear strong.

Valuation

• The assumed bullish price target for ProPetro Holding is $11.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of ProPetro Holding's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $11.0, and the most bearish reporting a price target of just $6.5.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $1.7 billion, earnings will come to $190.5 million, and it would be trading on a PE ratio of 7.4x, assuming you use a discount rate of 7.5%.
• Given the current share price of $6.54, the bullish analyst price target of $11.0 is 40.5% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.