U.S. Silica Holdings, Inc.

NYSE:SLCA Stock Report

Market Cap: US$1.2b

This company has been acquired

The company may no longer be operating, as it has been acquired. Find out why through their latest events.

U.S. Silica Holdings Future Growth

Future criteria checks 0/6

U.S. Silica Holdings's revenue and earnings are forecast to decline at 1.8% and 15% per annum respectively. EPS is expected to decline by 16% per annum. Return on equity is forecast to be 11.7% in 3 years.

Key information

-15.0%

Earnings growth rate

-15.99%

EPS growth rate

Energy Services earnings growth21.3%
Revenue growth rate-1.8%
Future return on equity11.66%
Analyst coverage

Low

Last updated30 Apr 2024

Recent future growth updates

Analysis Article • Mar 02

U.S. Silica Holdings, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a good week for U.S. Silica Holdings, Inc. ( NYSE:SLCA ) shareholders, because the company has just released...

Recent updates

Seeking Alpha • Jul 02

U.S. Silica Has Upside To Sum Of The Parts Valuation In A Potential Split

Summary U.S. Silica has been investing in new technology in its Industrial business for several years and has guided to 8-10% profit growth for the next few years. The Industrial segment, alone could be worth $25/share based on the guidance and a peer multiple of 12x EV/EBITDA. The complicating factor is the Oil & Gas business is more volatile and weighs down the overall valuation even though it is worth only about $7/share at 3x EV/EBITDA. Apollo has proposed buying the company for $15.50/share or an 18% premium. However, long-term investors could benefit far more by forgoing the meager premium and opting for a split. Read the full article on Seeking Alpha
Analysis Article • Apr 27

U.S. Silica Holdings, Inc.'s (NYSE:SLCA) Shares Bounce 30% But Its Business Still Trails The Market

Despite an already strong run, U.S. Silica Holdings, Inc. ( NYSE:SLCA ) shares have been powering on, with a gain of...
Seeking Alpha • Apr 26

U.S. Silica To Be Acquired For $15.50 Per Share; Positive For Smaller Peer Smart Sand

Summary U.S. Silica is to be acquired by Apollo Funds for $1.85 billion in cash or $15.50 per share. Deals in the "sand space" are rare, but this is the second one in 2024. Positive impact is expected for SND and ACDC as a result of the acquisition. Read the full article on Seeking Alpha
Analysis Article • Apr 19

An Intrinsic Calculation For U.S. Silica Holdings, Inc. (NYSE:SLCA) Suggests It's 37% Undervalued

Key Insights Using the 2 Stage Free Cash Flow to Equity, U.S. Silica Holdings fair value estimate is US$20.07 U.S...
Analysis Article • Apr 04

U.S. Silica Holdings (NYSE:SLCA) Shareholders Will Want The ROCE Trajectory To Continue

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly...
Analysis Article • Mar 02

U.S. Silica Holdings, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a good week for U.S. Silica Holdings, Inc. ( NYSE:SLCA ) shareholders, because the company has just released...
Analysis Article • Feb 28

U.S. Silica Holdings, Inc.'s (NYSE:SLCA) Earnings Are Not Doing Enough For Some Investors

When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") above 17x, you may...
Seeking Alpha • Jan 17

U.S. Silica: Lower Margins And Guidance Across The Board - Rating Downgrade (Hold)

Summary U.S. Silica Holdings, Inc.'s Q3 earnings and guidance disappointed, causing a selloff in the stock. The company's core business of selling frac sand declined in Q3, along with its industrial segment. Short-term catalysts for the stock may come from potential M&A activity in the sand supplier sector. We rate U.S. Silica Holdings, Inc. stock as a Hold at current prices. Read the full article on Seeking Alpha
Analysis Article • Oct 26

Investors Will Want U.S. Silica Holdings' (NYSE:SLCA) Growth In ROCE To Persist

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly...
Seeking Alpha • Sep 29

U.S. Silica Holdings: Hard To Pass Up On This Solid Company

Summary U.S. Silica Holdings Inc. is a company operating in the energy sector, focusing on commercial silica production in the U.S. The company has shown improvement in its business model and stronger margins, with expected growth in the silica market. Risks include a potential threat to its primary business segment and concerns about its debt, but the company has made progress in paying down debt and improving its financial position. Read the full article on Seeking Alpha
Seeking Alpha • Sep 07

U.S. Silica Holdings: Higher-Margin Products Imply Undervaluation

Summary U.S. Silica Holdings is a manufacturer of silica-based performance material products primarily serving the oil and gas industry. Management expects to increase its presence in the markets with the development of new products, and effectively reposition the facilities owned by SLCA. Analysts expect positive free cash flow in 2024 and 2025, and further deleveraging could lead to better stock valuations. Read the full article on Seeking Alpha
Analysis Article • Sep 02

These 4 Measures Indicate That U.S. Silica Holdings (NYSE:SLCA) Is Using Debt Reasonably Well

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...
Analysis Article • Jun 25

Returns On Capital Are Showing Encouraging Signs At U.S. Silica Holdings (NYSE:SLCA)

What are the early trends we should look for to identify a stock that could multiply in value over the long term...
Seeking Alpha • May 29

U.S. Silica Holdings: Out Of The Doghouse (Rating Upgrade)

Summary U.S. Silica Holdings, Inc. has fixed the core debt problem that was a drag on its shares the last few years. The company has de-risked the ups and downs of the oilfield with a solid and highly profitable industrial segment. I think U.S. Silica Holdings stock is a strong bet at current prices. Read the full article on Seeking Alpha
Analysis Article • May 17

These 4 Measures Indicate That U.S. Silica Holdings (NYSE:SLCA) Is Using Debt Reasonably Well

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...
Seeking Alpha • Feb 23

U.S. Silica Holdings: Patience On This One

Summary U.S. Silica Holdings, Inc. is the leader in the frac sand business and has good long-term prospects. The current downturn is making U.S. Silica Holdings shares cheaper. In this article, we discuss reasons why we are waiting to dip our toes in U.S. Silica Holdings stock.
Analysis Article • Feb 10

An Intrinsic Calculation For U.S. Silica Holdings, Inc. (NYSE:SLCA) Suggests It's 40% Undervalued

Does the February share price for U.S. Silica Holdings, Inc. ( NYSE:SLCA ) reflect what it's really worth? Today, we...
Seeking Alpha • Jan 23

U.S. Silica COO Michael Winkler to retire from the company

According to a regulatory filing, Michael Winkler, Executive Vice President and Chief Operating Officer of U.S. Silica Holdings (NYSE:SLCA), notified the company of his plan to retire from the company. Winkler is expected to remain in his position until mid to late 2023 to assist with the transition of his responsibilities.
Analysis Article • Jan 05

Is U.S. Silica Holdings (NYSE:SLCA) A Risky Investment?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...
Seeking Alpha • Nov 17

U.S. Silica: Green Shoots Emerging But Don't Get Too Excited

Summary Despite the triple-digit oil prices during the first half of 2022, U.S. Silica did not see improvements versus 2021. Thankfully, this disappointing financial performance was not continued into the third quarter with tentative signs of a recovery emerging. Whilst positive, the outlook heading into 2023 is questionable with the total oil and gas rig count in the United States almost stagnating. Furthermore, concerns about a recession continue growing, thereby imposing another headwind. Since they have not addressed their massive debt maturity and see material exposure to higher interest rates, I believe that maintaining my hold rating is appropriate. Introduction Despite triple-digit oil prices earlier in 2022 as the world found itself short on supply, U.S. Silica (SLCA) was still not out of the woods, proverbially speaking, as my previous article warned. Whilst the third quarter subsequently saw green shoots emerging for a tentative recovery, it would be prudent that investors do not get too excited as it remains far from certain whether these will continue growing bigger and stronger, metaphorically speaking, as discussed within this follow-up analysis. Coverage Summary & Ratings Since many readers are likely short on time, the table below provides a brief summary and ratings for the primary criteria assessed. If interested, this Google Document provides information regarding my rating system and importantly, links to my library of equivalent analyses that share a comparable approach to enhance cross-investment comparability. Author Detailed Analysis Author When previously reviewing their cash flow performance for the first half of 2022, it was disappointing to see neither the first nor second quarters producing year-on-year improvements versus 2021, when excluding their working capital movements. On the surface, their operating cash flow following the first nine months of 2022 seems promising with their results landing at $169.5m and thus a decent circa 8% higher year-on-year versus their previous result of $156.8m during the first nine months of 2021. Author Unlike during the first half of 2022, thankfully these improvements were not simply due to working capital movements but rather, they saw fundamental improvements during the third quarter. When viewing their operating cash flow on a quarterly basis, it easily becomes apparent their underlying result of $72.9m that excludes working capital movements was many magnitudes higher year-on-year versus their previous equivalent result of only a mere $12.5m. Whilst it was broadly unchanged sequentially versus the second quarter of 2022 that saw an equivalent result of $74.4m, this still marks first time in years whereby they saw two quarters in a row with decent financial performance. This shows green shoots of a tentative recovery emerging, especially as these improvements were driven by both of their business segments, as per the commentary from management included below. “These tremendous results were driven by continued robust customer demand in both business segments and outstanding execution by our talented team. We enjoyed a full quarter of price increases to fight inflationary impacts in our industrial segment, realized greater contract coverage and improved prices in sand proppant, and delivered further margin expansion in SandBox last-mile-logistics.” -U.S. Silica Q3 2022 Conference Call. I would not personally say their results were “tremendous”, although it was nevertheless positive to see their oil and gas proppants business segment performing well in conjunction with their industrial and specialty products business segment. Even though this is undoubtedly positive as things stand at the moment, it would be prudent for investors not to get too excited until this tentative recovery shows signs of being cemented into place, especially given the outlook heading into 2023. Overall, their oil and gas proppants business segment, whereby they supply frac sand, comprises their biggest contributor to their financial performance, as it formed $82.3m of their total $131.8m segment margin during the third quarter of 2022. This near two-thirds weighting means the future of oil and gas drilling sees a sizeable influence on their future financial performance. Disappointingly, oil and gas drilling in the United States almost stagnated since the beginning of the third quarter with the total rig count barely increasing during the subsequent months, which sees no material improvements since my previous analysis. Meanwhile, the United States Energy Information Agency recently slashed their forecast for domestic oil production in 2023 by 21%, thereby pouring more cold water on hopes for a significantly stronger year ahead. Elsewhere, their industrial and specialty products business segment sees risks heading into 2023 on the back of the gloomy economic outlook. Since many investors and economists are expecting a recession during 2023 as central banks rapidly tighten monetary policy to combat high inflation, it seems operating conditions for this business segment are more likely to deteriorate than anything else. When wrapped together, their recovery still remains a wait-and-see situation but at least if nothing else, the cash infusion during the third quarter of 2022 was still a welcomed surprise. Author Thanks to their improving cash flow performance, they were able to push their net debt lower once again during the third quarter of 2022. After dropping to $892.2m following the second quarter, it now sits at $845.4m and thus a solid circa 5% lower after one quarter. Whilst obviously positive, there is still plenty more work remaining to shake the debt burden and if looking ahead, their ability to continue slicing away at their debt remains uncertain given the outlook heading into 2023. Author Their lower net debt following the third quarter of 2022 was unsurprisingly accompanied by lower leverage with their net debt-to-EBITDA and net debt-to-operating cash flow now landing at 2.93 and 3.67. This sees a sizeable improvement versus their previous respective results of 3.64 and 4.48 following the second quarter. Although their latest result of 3.67 for their net debt-to-operating cash flow is still sitting within the high territory of between 3.51 and 5.00. Whilst lower leverage is undoubtedly positive, it nevertheless remains high and thus not only highlights the need for net debt to be reduced further but also highlights the risk of problematic very high leverage returning if their financial performance suffers during 2023. Author Apart from their subsequently discussed massive debt maturity hurdle, shedding debt is also important to help ease the pain of higher interest rates, which is becoming increasingly important to consider as interest rates climb rapidly. As it stands right now, their interest coverage is only just sufficient when utilizing their accrual-based EBIT that sees a result of 1.99 and whilst this improves modestly to 3.09 if utilizing their cash-based operating cash flow, it remains lower than would be preferred. More importantly, going forwards they are materially exposed to higher interest rates given the variable rate of their entire debt, as per the quote included below. “As of September 30, 2022, we had $1.112 billion of debt outstanding under the Credit Agreement. Assuming LIBOR is greater than the 1.0% minimum base rate on the Term Loan, a hypothetical increase in interest rates by 1.0% would have changed our interest expense by $11.1 million per year.”
Seeking Alpha • Oct 27

U.S. Silica Holdings Q3 2022 Earnings Preview

U.S. Silica Holdings (NYSE:SLCA) is scheduled to announce Q3 earnings results on Friday, October 28th, before market open. The consensus EPS Estimate is $0.35 (+259.1% Y/Y) and the consensus Revenue Estimate is $401M (+50.0% Y/Y). Over the last 2 years, SLCA has beaten EPS estimates 75% of the time and has beaten revenue estimates 75% of the time. Over the last 3 months, EPS estimates have seen 1 upward revision and 0 downward. Revenue estimates have seen 1 upward revision and 0 downward.
Analysis Article • Oct 06

Is U.S. Silica Holdings, Inc. (NYSE:SLCA) Trading At A 47% Discount?

How far off is U.S. Silica Holdings, Inc. ( NYSE:SLCA ) from its intrinsic value? Using the most recent financial data...
Analysis Article • Sep 15

Is U.S. Silica Holdings (NYSE:SLCA) A Risky Investment?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...
Seeking Alpha • Sep 03

U.S. Silica Holdings: Triple-Digit Oil Prices, Still Not Out Of The Woods

Summary The last few years have been quite painful for the shareholders of U.S. Silica. Whilst 2022 was looking promising with booming oil and gas prices lifting demand for frac sand, disappointingly, thus far it has not flowed through to their financial performance. Their underlying cash flow performance during the first half of 2022 is still down year-on-year. Whilst they have no solvency issues for the moment, 2025 sees a big hurdle to jump when the vast majority of their debt matures. Even though their shares appear cheap based on their free cash flow yield, I still believe these risks make a hold rating appropriate, especially given the outlook for a possible recession. Introduction The last few years have been quite painful for the shareholders of U.S. Silica (SLCA), who have endured years of not only a volatile share price but also no shareholder returns, as their dividends remain suspended. Whilst the strong economic recovery during 2021 and subsequent triple-digit oil prices during 2022 would have raised hopes for an end in sight, disappointingly, they are still not out of the woods, proverbially speaking. Executive Summary & Ratings Since many readers are likely short on time, the table below provides a very brief executive summary and ratings for the primary criteria that were assessed. This Google Document provides a list of all my equivalent ratings as well as more information regarding my rating system. The following section provides a detailed analysis for those readers who are wishing to dig deeper into their situation. Author *Instead of simply assessing dividend coverage through earnings per share cash flow, I prefer to utilize free cash flow since it provides the toughest criteria and also best captures the true impact upon their financial position. Detailed Analysis Author After enduring a very tough ride during the severe downturn of 2020 that demolished their operating cash flow to negative $3.4m, thankfully they saw a recovery during 2021 with their result landing at $169.3m. Despite now being back around its level from 2019 of $147.8m, it was nevertheless a shadow of its former self from earlier years with their cash flow history showing heights of $222m and $310.7m during 2017 and 2018 respectively. This obviously leaves significant scope for further improvements, which many investors were likely hoping to be forthcoming during 2022 given not only the strong economic recovery during the latter half of 2021, but also the booming oil and gas prices during 2022 driving demand for their frac sand. Whilst these were reasonable hopes, the first half of 2022 was not nearly as strong as wanted once digging into their results, despite their surface-level operating cash flow increasing to $103.2m versus its previous result of $82m during the first half of 2021. If removing the impacts of their temporary working capital movements, their underlying results for the first half of 2022 was actually slightly lower at $99.6m and meanwhile, their previous equivalent result for the first half of 2021 was materially higher at $115.8m. In fact, when viewing this at the per-quarter level, it shows that both the first and second quarters of 2022 saw lower underlying results year-on-year versus 2021, as the graph included below displays. Author This is quite disappointing and whilst hope remains that the second half of 2022 will see a material improvement, this remains a wait-and-see situation given the risk of a recession on the horizon, not to mention the recent slowdown and recent fall in the oil rig count in the United States that could see demand for frac sand slowdown. Despite the disappointing lack of improvements versus 2021, at least the first half of 2022 still saw $82.5m of free cash flow, which annualizes to circa $160m. Even if this only ends up being around $133m, as during 2021, it still sees a very high circa 13% free cash flow yield given their current market capitalization of approximately $1b. This means that there is potential for a deep value opportunity, even without their financial performance improving, although to see this value realized by the market and thus reflected in their share price, their financial position requires addressing. Author Even though their cash flow performance did not see tangible improvements thus far into 2022, at least their routine free cash flow still managed to help push their net debt lower following the first half. It now sits at $892.2m and thus makes for a decrease of 8.21% from its previous level of $972m at the end of 2021. Whilst this $79.8m decrease is a decent improvement for only half a year, even if annualized to circa $160m, it would still take around five and half years to repay the remainder of their debt. Normally, this would be considered reasonably timely but alas, it is still problematic given their debt maturities, as subsequently explained. Author On the surface, their leverage appears to have seen a sizeable improvement following the first half of 2022 but beneath the surface, there are more variables to consider. Whilst yes, their lower net debt helps, it alone is not responsible for pushing their respective net debt-to-EBITDA and net debt-to-operating cash flow down to 3.64 and 4.48 versus their previous respective results of 5.14 and 5.74 at the end of 2021. If this were the case, their leverage would have dropped below the threshold of 5.01 for the very high territory and thus back into the safer, albeit still somewhat concerning high territory of between 3.51 and 5.00. In reality, the first half of the year appears to enjoy a disproportionately higher weighting of their financial performance because if utilizing their results for the first half of 2021 against their current net debt, it produces a net debt-to-EBITDA and net debt-to-operating cash flow of 3.48 and 3.85 respectively. These are both lower than their present results and their full-year results for 2021, which indicates that their leverage should divert higher as 2022 ends, barring a sudden improvement to their financial performance. Since their underlying cash flow performance during the first half of 2022 is still tracking below their previous results for the first half of 2021, their leverage appears to remain very high. Author Thankfully their very high leverage is matched with strong liquidity, thereby helping ease the risks whilst they deleverage, as primarily evidenced by their current ratio of 2.76 and cash ratio of 1.26. It is particularly important they retain this sizeable cash ratio because their leverage ratio as defined under their credit facility is 5.26 and thus above its covenant limit of 3.75, which limits their credit facility availability to only $30m, as per their Q2 2022 10-Q. Even though their strong liquidity provides support in the short-term, this may change when looking ahead into the medium-term as May 2025 sees the vast majority of their debt maturing when their term loan comes due, as the table included below displays. This creates a massive and frankly speaking, scary hurdle for the company to jump as they seem incapable of repaying this debt within only three years and refinancing the entirety of their debt at once can be problematic and leaves them at the mercy of financial institutions.

Earnings and Revenue Growth Forecasts

NYSE:SLCA - Analysts future estimates and past financials data (USD Millions)
DateRevenueEarningsFree Cash FlowCash from OpAvg. No. Analysts
12/31/20261,346N/AN/AN/A1
12/31/20251,380891722322
12/31/20241,341741692292
3/31/20241,436116205264N/A
12/31/20231,552147198264N/A
9/30/20231,629149231303N/A
6/30/20231,681155222293N/A
3/31/20231,663131223289N/A
12/31/20221,52578209263N/A
9/30/20221,39728138182N/A
6/30/20221,246-24150191N/A
3/31/20221,174-21137171N/A
12/31/20211,104-34139169N/A
9/30/20211,046-10160182N/A
6/30/2021955-47291N/A
3/31/2021811-632648N/A
12/31/2020846-114-38-3N/A
9/30/2020958-412-50-1N/A
6/30/20201,143-421-1549N/A
3/31/20201,365-382295N/A
12/31/20191,474-32926148N/A
9/30/20191,493-292-64159N/A
6/30/20191,554-263-48220N/A
3/31/20191,587-251-78244N/A
12/31/20181,577-201-39311N/A
9/30/20181,580127-7329N/A
6/30/20181,502162-64317N/A
3/31/20181,365174-105319N/A
12/31/20171,241145N/A222N/A
9/30/20171,06366N/A161N/A
6/30/201785514N/A77N/A
3/31/2017682-28N/A-15N/A
12/31/2016560-41N/A0N/A
9/30/2016513-49N/A25N/A
6/30/2016531-36N/A24N/A
3/31/2016562-14N/A38N/A
12/31/201564312N/A61N/A
9/30/201575660N/A101N/A
6/30/201584299N/A155N/A
3/31/2015901118N/A161N/A
12/31/2014877122N/A171N/A
9/30/2014777105N/A125N/A
6/30/201468085N/A92N/A
3/31/201460476N/A82N/A
12/31/201354675N/A46N/A
9/30/201351580N/A59N/A

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SLCA's earnings are forecast to decline over the next 3 years (-15% per year).

Earnings vs Market: SLCA's earnings are forecast to decline over the next 3 years (-15% per year).

High Growth Earnings: SLCA's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SLCA's revenue is expected to decline over the next 3 years (-1.8% per year).

High Growth Revenue: SLCA's revenue is forecast to decline over the next 3 years (-1.8% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SLCA's Return on Equity is forecast to be low in 3 years time (11.7%).

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/08/01 16:50
End of Day Share Price 2024/07/31 00:00
Earnings2024/03/31
Annual Earnings2023/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

U.S. Silica Holdings, Inc. is covered by 31 analysts. 2 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Chase MulvehillBofA Global Research
Akil MarshBrean Capital Historical (Janney Montgomery)
Lucas PipesB. Riley Securities, Inc.