Solaris Oilfield Infrastructure (SOI) Valuation Update 2/28

[dan_s]

SOI is going to be VERY PROFITABLE in 2023.

At the time of this post SOI was trading for $9.07
I have updated my forecast/valuation model of SOI and posted it to the EPG website.
I believe that SOI is going to return to its pre-pandemic 2019 level of profitability when the stock was trading in the high teens. It is actually in better shape now. This is an oilfield services company that is very highly respected. A lot of our upstream companies use their wellsite services.

Actual Results
> 2021: EPS of $-0.03 and operating cash flow of $1.02
> 2022: EPS of $0.67 and operating cash flow of $2.54
Forecast:
> 2023: EPS of $1.39 and operating cash flow of $3.73 < TipRanks' EPS forecast for 2023 is $1.32.
> 2024: EPS of $1.63 and operating cash flow of $4.22

Heading into 2020, SOI was virtually debt free which is why they survived the pandemic and were able to continue paying their dividends of $0.105/quarter. In 2022 they were free cash flow positive and the company will generate a lot more free cash flow this year. With a "pristine balance sheet" and revenues on the rise, I expect them to increase dividends this year.

My valuation increases by $1.50 to $16.00 per share. < Just 4.5 X annualized operating CFPS

Stifel is the only firm that has issued a new report since Solaris announced Q4 results: On Feb 27th "Stifel analyst Stephen Gengaro lowered the price target on Solaris Oilfield Infrastructure (NYSE: SOI) to $14.00 (from $16.00) while maintaining a Buy rating."