Why Select Water Solutions (WTTR) Is Up 8.9% After Breaking Ground on a Texas Lithium Facility

• Select Water Solutions, Inc. and Mariana Minerals recently announced the groundbreaking of a lithium extraction facility leveraging produced water at Joaquin, Texas, part of the Haynesville shale region.
• This innovative use of existing oil and gas water infrastructure to produce lithium salts positions Select at the forefront of integrating energy services with critical minerals supply chain development.
• We'll explore how entering lithium extraction through established water networks could reshape Select Water Solutions' long-term growth outlook and business diversification.

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Select Water Solutions Investment Narrative Recap

To be a shareholder in Select Water Solutions, you need to believe in the company’s potential to evolve its core water infrastructure into new, higher-value applications, such as critical minerals extraction, while managing near-term pressures from its legacy oil and gas exposure. The recent lithium extraction partnership is a long-term diversification play, but it does not immediately change the main risk: continued weakness in Water Services and Chemical Technologies may challenge short-term earnings and margin stability if trends persist.

Among recent company news, the steady quarterly dividend of US$0.07 per share stands out, offering investors income stability as the business works to offset sector headwinds with forward-looking initiatives like lithium extraction.

By contrast, investors should know that continued revenue declines in Water Services and Chemical Technologies segments could increasingly test Select’s ability to diversify earnings over time...

Read the full narrative on Select Water Solutions (it's free!)

Select Water Solutions' outlook anticipates $1.4 billion in revenue and $65.5 million in earnings by 2028. This implies a -1.3% annual revenue decline and a $32.5 million increase in earnings from the current $33.0 million.

Uncover how Select Water Solutions' forecasts yield a $14.50 fair value, a 23% upside to its current price.

Exploring Other Perspectives

Three Simply Wall St Community members currently estimate fair values for Select Water Solutions between US$14.50 and US$18. While many investors see opportunities in the company's growing backlog of water infrastructure contracts, ongoing revenue concentration in a small set of customers may affect longer-term growth and earnings predictability. Explore these perspectives to see how diverse opinions may shape expectations for the stock.

Explore 3 other fair value estimates on Select Water Solutions - why the stock might be worth just $14.50!

Build Your Own Select Water Solutions 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 Select Water Solutions research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Select Water Solutions research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Select Water Solutions' 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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