Liberty Energy Surges 31% After Expansion News Is the Stock’s Value Story Changing in 2025?

Thinking about what to do with Liberty Energy stock can feel like standing at a crossroads. On one hand, the stock surged an impressive 31.0% over the last month, rebounding sharply from a rocky start to the year. A shorter jump of 7.0% in just the past week has added fuel to conversations about possible growth ahead. Looking at the past five years, Liberty Energy has skyrocketed 158.2%. The journey included plenty of twists and turns, including a recent year-to-date decline of 20.8% that may have worried some investors.

Much of this renewed momentum traces back to news about Liberty Energy’s ongoing expansion into key shale regions and recent partnership moves, which have started shifting the market’s perception of risk and opportunity. Investors appear to be taking a second look as the company signals a more aggressive stance on market share and technology investment, swinging the narrative back in Liberty’s favor.

Numbers-wise, Liberty Energy scores a 2 out of 6 on our standard undervaluation checklist. This suggests that while the company shows pockets of value, it is not a screaming bargain by most conventional measures. Of course, valuation is rarely just about checklists. There is nuance to be teased out, and sometimes, opportunity hides where least expected. Next, let’s dig into how Liberty Energy stacks up using different valuation approaches, before highlighting what could be the smartest way to size up the stock.

Liberty Energy scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Liberty Energy Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates the true value of a business by projecting its future cash flows and then discounting them back to today’s dollars. This approach tries to capture what the company’s future earnings could be worth in present terms, factoring in expectations for growth and risk.

For Liberty Energy, current Free Cash Flow stands at $69.4 million. Analyst estimates project significant volatility in the years ahead, including a near-term dip followed by sizable improvements. Free Cash Flow is expected to reach $172 million by 2029. For years beyond what analysts provide, projections show steady gains. By 2035, extrapolations suggest cash flow could top $221 million.

Based on these projections and the DCF approach, the estimated fair value for Liberty Energy comes in at $18.90 per share. This is around 13.2% above the current market price, indicating the stock is undervalued according to this model.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Liberty Energy.

Our Discounted Cash Flow (DCF) analysis suggests Liberty Energy is undervalued by 13.2%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Liberty Energy Price vs Earnings

For companies that are consistently profitable, the Price-to-Earnings (PE) ratio is a widely relied upon way to gauge valuation. It is a useful tool because it connects a company’s market price to its actual earnings, helping investors judge how much they are paying for each dollar of profit. Ideally, companies with stronger growth prospects and lower risk levels command higher PE ratios, while those facing uncertainty or slower growth tend to trade at lower multiples.

Liberty Energy is currently trading at a PE ratio of 14.3x. That compares to a peer average of 11.1x and an energy services industry average of 16.3x. On the surface, this puts Liberty somewhere between its immediate competition and the broader sector average. The stock is not too expensive, but not especially cheap either.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio, calculated here at 8.0x, brings in more nuance than a basic industry or peer comparison. It factors in Liberty’s specific earnings growth, risks, profit margins, industry, and market cap. This allows for a more tailored benchmark, making it a more robust guide for valuation than more generic comparisons.

Given that Liberty Energy’s current PE ratio of 14.3x is noticeably above its Fair Ratio of 8.0x, the stock looks overvalued based on this metric, even when accounting for its potential upside.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Liberty Energy Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your personal story or perspective about a company, reflecting how you see its future and what you believe its financial journey will look like. With Narratives, you connect your assumptions about Liberty Energy’s future earnings, revenue, and margins to a specific fair value, bridging the gap between the numbers and the context that shapes them.

Rather than relying entirely on static models or analyst targets, the Narrative approach empowers you to express your view on Liberty’s unique opportunities and risks, all in one place. It’s easy to get started: millions of investors use Simply Wall St’s Community page to write, refine, and share Narratives, making this a highly accessible and dynamic tool for modern investing.

The real strength of Narratives lies in decision making. By comparing your Narrative-derived Fair Value to Liberty Energy’s current price, you can readily judge when to consider buying or selling based on your own logic and expectations. In addition, these Narratives update automatically as new news, earnings, or developments emerge, keeping your view current.

For example, if you think Liberty’s technology partnerships and strong industry demand justify much higher future cash flows, your Narrative might set a fair value near the most bullish analyst target of $19.00. Conversely, if you’re cautious about market headwinds and price softness, your Fair Value might align closer to $10.00, which is the lowest analyst estimate.

Do you think there's more to the story for Liberty Energy? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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