Will Slowing Earnings and a Lower P/E Change Liberty Energy's (LBRT) Investment Narrative?

• Recent news indicates that Liberty Energy Inc. is facing declining earnings, resulting in a lowered price-to-earnings ratio and raising concerns among investors about the company's future earnings potential.
• Analyst forecasts now predict that Liberty Energy’s earnings could decline by 37% annually over the next three years, a much weaker outlook than the broader market expects.
• We'll explore how heightened concerns about Liberty Energy’s long-term earnings growth potential may affect the company's overall investment narrative.

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Liberty Energy Investment Narrative Recap

To own Liberty Energy, you'd need to trust in the durability of North American oil and gas demand and the company's ability to convert industry cycles into profitable, long-term growth. However, declining earnings and cautious analyst forecasts now directly challenge the demand-driven growth story and the company's near-term profitability, with the risk of weaker service pricing and reduced completions activity in the second half of 2025 becoming more material to the immediate outlook.

Liberty’s recent Q2 2025 earnings report further highlighted this trend, with year-on-year declines in sales, net income, and profit margins. This announcement, aligned with the latest analyst downgrades, shines a spotlight on deteriorating financial momentum and intensifies concerns about Liberty’s ability to maintain margins through anticipated industry headwinds.

On the other hand, investors should also be aware that deeper pressure on revenue and EBITDA could emerge from...

Read the full narrative on Liberty Energy (it's free!)

Liberty Energy's outlook anticipates $4.3 billion in revenue and $41.3 million in earnings by 2028. This is based on an assumed 1.8% annual revenue growth rate, but represents a sharp decrease in earnings, down $175.5 million from current earnings of $216.8 million.

Uncover how Liberty Energy's forecasts yield a $14.61 fair value, a 13% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community produced five fair value estimates for Liberty Energy ranging from US$10 to over US$22 per share. While some participants see opportunity at current prices, the risk of continued earnings declines now shapes how many may view future performance, explore these perspectives to see how market sentiment differs.

Explore 5 other fair value estimates on Liberty Energy - why the stock might be worth as much as 70% more than the current price!

Build Your Own Liberty Energy Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Liberty Energy research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.
• Our free Liberty Energy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Liberty Energy's overall financial health at a glance.

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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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