Solaris Energy Infrastructure (NYSE:SEI): Exploring Valuation After a Standout Year for the Stock

Solaris Energy Infrastructure (NYSE:SEI) has delivered eye-catching returns this year, jumping nearly 59% since January and more than 245% over the past year. The stock has outperformed broader energy benchmarks and has drawn attention from investors who track momentum names.

See our latest analysis for Solaris Energy Infrastructure.

Solaris Energy Infrastructure’s momentum has been hard to ignore, with a strong total shareholder return of 2.45% over the past year. This signals that investors are warming to its growth story and perhaps reassessing its longer-term prospects. This upward trend suggests the market is increasingly optimistic about the company’s ability to deliver on future opportunities.

If Solaris’s sharp run has you thinking about what else is out there, now is a great time to broaden your search and discover fast growing stocks with high insider ownership

But with Solaris shares rallying so strongly, investors now face the big question: are they picking up a bargain, or is the market already factoring in every ounce of future growth potential?

Most Popular Narrative: 4% Overvalued

With Solaris Energy Infrastructure's fair value pegged at $45.11 according to the leading narrative, the last close of $46.75 puts shares just above consensus long-term expectations, drawing a line between recent momentum and the analyst outlook.

Ongoing vertical integration and technology investments, including proprietary SCR emissions systems, remote monitoring (Solaris Pulse), and expanded in-house balance of plant solutions, are positioning Solaris to capture greater share of customer wallet and widen its addressable market, supporting higher long-term revenue growth and operating leverage.

Read the complete narrative.

Want to know what powers this verdict? The backbone of the narrative relies on rapid expansion, margin transformation, and ambitious profit forecasts. Discover the bold financial leaps that led analysts to this price target. The exact blueprint that puts Solaris in the market spotlight might surprise you.

Result: Fair Value of $45.11 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing softness in oil prices and occasional surges in Power Solutions revenue could challenge Solaris’s growth story if momentum slows.

Find out about the key risks to this Solaris Energy Infrastructure narrative.

Another View: DCF Model Points to Deep Value

While the narrative valuation sees Solaris as overvalued, our DCF model offers a different take. It estimates fair value at $122.05 per share. This suggests the stock is actually trading well below what its future cash flows could justify. Could the market be underestimating Solaris’s long-term earnings power?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Solaris Energy Infrastructure for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Solaris Energy Infrastructure Narrative

If you want to dig into the numbers your way or form your own conclusions, building a personalized Solaris story only takes a few minutes. Do it your way

A great starting point for your Solaris Energy Infrastructure research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

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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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