Last Update 17 Dec 25

Fair value Increased 8.26%

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.

Transition to advanced, efficient fleets and expansion into power services supports pricing power, long-term contracts, and stable recurring cash flow for sustained growth.
Balance sheet strength and disciplined capital allocation enable continued investment in high-return projects, driving earnings growth and outperformance as peers consolidate or exit.
ProPetro faces industry oversupply, revenue concentration risks, legacy asset underutilization, delayed returns on new investments, and long-term uncertainty from energy transition pressures.

Catalysts

About ProPetro Holding

Operates as an integrated oilfield services company.What are the underlying business or industry changes driving this perspective?

Structural growth in North American energy demand and continued emphasis on domestic energy security are driving robust long-term utilization of ProPetro's efficient, Permian-focused fleet, supporting higher future revenue and earnings resilience when market conditions improve.
The company's accelerated transition to next-generation, dual-fuel and electric fleets-now comprising about 75% of its total fleet-positions ProPetro to capture premium contract pricing, win longer-term agreements, and benefit from rising ESG and efficiency standards, thereby improving net margins as older diesel competitors exit or are forced to idle capacity.
Early traction and long-term visibility in the PROPWR power business, including the recent 10-year, 80-megawatt contract and confidence in fully deploying 220 megawatts by end of 2025, expands addressable markets and creates a stable, recurring cash flow stream, expected to drive sustained revenue and margin growth.
Strong balance sheet discipline, consistent free cash flow from legacy operations, and dynamic capital allocation (favoring next-gen fleet deployment and PROPWR scale-up over share buybacks near-term) enable continued investment in higher-return projects, supporting future earnings growth and shareholder value creation.
Industry consolidation, attrition among undercapitalized providers, and ProPetro's focus on digitalized, modern assets ensure durable pricing power and higher utilization, likely resulting in cyclical outperformance versus peers and incremental improvement in net margins and earnings as the market normalizes.

ProPetro Holding Earnings and Revenue Growth

ProPetro Holding Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming ProPetro Holding's revenue will grow by 1.0% annually over the next 3 years.
Analysts are not forecasting that ProPetro Holding will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate ProPetro Holding's profit margin will increase from -11.1% to the average US Energy Services industry of 7.0% in 3 years.
If ProPetro Holding's profit margin were to converge on the industry average, you could expect earnings to reach $98.6 million (and earnings per share of $0.92) by about September 2028, up from $-151.7 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.0x on those 2028 earnings, up from -3.1x today. This future PE is lower than the current PE for the US Energy Services industry at 15.0x.
Analysts expect the number of shares outstanding to grow by 1.01% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.23%, as per the Simply Wall St company report.

ProPetro Holding Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Significant oversupply and persistent "looseness" in the Permian pressure pumping market-reflected by a steep drop from 90-100 to about 70 active fleets and expectations that market softness could last into 2026-could translate to lower utilization rates, revenue declines, and pressure on margins for ProPetro's core completions business.
Client consolidation or rapid customer activity pullbacks, as highlighted by the voluntary idling of several fleets in response to a single large key customer's "frantic" budget and pricing moves, exposes ProPetro to revenue concentration risk and elevated earnings volatility due to a lack of geographic and customer diversification.
Ongoing weakness in conventional diesel and even some dual-fuel equipment, combined with idling fleets rather than operating at "subeconomic levels," highlights structural risk of legacy asset underutilization, which can weigh on return on capital and depress company-wide net margins in the long run.
Despite scaling up PROPWR and next-gen electric fleets, capital expenditures and asset deployment are highly sensitive to macro market conditions and order timing; delays in contract signings or slower-than-expected adoption in end markets could delay revenue ramp or strain free cash flow during heavy investment cycles.
Broader secular and industry forces-such as the global energy transition away from hydrocarbons, investor and regulatory ESG pressures, and long-term risks of a shrinking North American drilling inventory-raise concerns about the size and profitability of ProPetro's addressable market and could depress valuation and limit access to low-cost capital over time.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $7.3 for ProPetro Holding based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $10.0, and the most bearish reporting a price target of just $5.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.4 billion, earnings will come to $98.6 million, and it would be trading on a PE ratio of 10.0x, assuming you use a discount rate of 8.2%.
Given the current share price of $4.52, the analyst price target of $7.3 is 38.1% 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.

Have other thoughts on ProPetro Holding?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

PUMP: Future Activity Slowdown Will Pressure Sector Pricing And Margins