SEI: Expanded 2.2GW Capacity Will Support Second Data Center Contract

Analysts have nudged their price target on Solaris Energy Infrastructure slightly higher to approximately $64.60 per share. This reflects incremental increases in projected fair value, profitability, and future valuation multiples as the company scales capacity and secures data center opportunities.

Analyst Commentary

Recent Street research has been broadly constructive on Solaris Energy Infrastructure, with a series of upward price target revisions clustered over the past several weeks. These moves largely reflect rising confidence in the company’s capacity expansion, growing data center exposure, and improving earnings power through the back half of the decade.

At the same time, analysts acknowledge that the share price has already moved sharply higher and that investor sentiment is sensitive to the timing of the next major commercial catalyst, particularly additional data center wins.

Bullish Takeaways

• Bullish analysts highlight the company’s expanded project pipeline. They note the increase to about 2.2GW of capacity by early 2028 as a key driver of higher revenue visibility and long term earnings growth.
• The addition of roughly 900MW of available capacity is viewed as strategically important for landing a second large data center contract. If executed successfully, this could justify further multiple expansion.
• Several price target hikes are tied to higher long term valuation multiples on projected FY27 Power adjusted EBITDA. This reflects greater confidence in Solaris’ ability to monetize its growth platform.
• Capital structure flexibility, including remaining proceeds from the recent convertible raise, is seen as supporting continued expansion without materially constraining the balance sheet. This underpins premium growth valuations.

Bearish Takeaways

• Bearish analysts caution that shares have already rallied about 50% in a short period. This could limit near term upside if execution on new contracts or capacity ramps falls behind expectations.
• Some investors are perceived as waiting for a clear next catalyst, such as a second data center announcement. This suggests the stock could trade sideways or remain volatile until more concrete commercial progress is demonstrated.
• Higher targets based on increased valuation multiples introduce downside risk if sector sentiment weakens or if Solaris’ growth profile normalizes. This could potentially pressure the premium currently embedded in the shares.
• The build out to 2.2GW and associated capital commitments heighten execution risk. Delays, cost overruns, or slower power offtake could weigh on profitability and challenge the more optimistic earnings trajectories reflected in recent models.

What's in the News

• Named industry veteran Amanda Brock as Co Chief Executive Officer alongside Chairman Bill Zartler, and appointed her to the board to fill a vacant director seat, effective October 16, 2025 (company announcement).
• Completed a $79.2 million follow on equity offering of 1,800,000 shares of Class A common stock at $44 per share, following an earlier filing for the same issuance (company filing).
• Identified an opportunity to purchase approximately 80 MW of immediately available turbine capacity, which would lift total available turbine capacity to roughly 500 MW when combined with existing on order units scheduled for delivery in the second half of 2026 (company announcement).
• Updated its share repurchase program and confirmed no buybacks in the July 1 to September 30, 2025 period, with total completed repurchases of 4,272,127 shares, or 14.03 percent of shares, for $34.56 million under the March 2, 2023 authorization (company disclosure).

Valuation Changes

• Fair Value: nudged higher from approximately $64.22 to $64.60 per share, reflecting a modest upward revision in intrinsic valuation.
• Discount Rate: edged down slightly from about 7.30 percent to 7.29 percent, implying a marginally lower perceived risk profile.
• Revenue Growth: trimmed slightly from roughly 29.52 percent to 29.45 percent, signaling a very small moderation in long term growth assumptions.
• Net Profit Margin: increased marginally from about 19.73 percent to 19.76 percent, indicating a modest improvement in expected profitability.
• Future P/E: inched up from approximately 20.27x to 20.38x, suggesting a slightly higher valuation multiple on forward earnings expectations.