Solaris Oilfield Infrastructure (SOI) Update - May 4
Posted: Mon May 04, 2020 10:36 am
SOI is trading for $6.30 this morning. My valuation is $8.00 per share.
Stifel's take on May 4
Solaris Oilfield Infrastructure, Inc. (SOI, $6.49, Buy; Target $11.00)
Zero Debt is a Big Plus; Maintain Buy - Stephen Gengaro
Following a stronger-than-expected 1Q20 print which included $11.0 million in FCF generation, share repurchases and a dividend payment, SOI highlighted steps it is taking to navigate the likely 75-85% sequential drop in 2Q20 activity and the uncertain outlook. SOI maintains a rock-solid zero-debt balance sheet and ample liquidity to navigate the downturn. We also expect positive FCF through working capital improvements in 2020 despite downward revisions to our EBITDA forecasts. We maintain our Buy rating on the shares and bump our target price to $11 from $10 based on our DCF analysis.
I am moving SOI from the Sweet 16 to our Small-Cap Growth Portfolio, but I think it will be one of the strongest oilfield service firms during the rebound phase of this cycle.
Stifel's take on May 4
Solaris Oilfield Infrastructure, Inc. (SOI, $6.49, Buy; Target $11.00)
Zero Debt is a Big Plus; Maintain Buy - Stephen Gengaro
Following a stronger-than-expected 1Q20 print which included $11.0 million in FCF generation, share repurchases and a dividend payment, SOI highlighted steps it is taking to navigate the likely 75-85% sequential drop in 2Q20 activity and the uncertain outlook. SOI maintains a rock-solid zero-debt balance sheet and ample liquidity to navigate the downturn. We also expect positive FCF through working capital improvements in 2020 despite downward revisions to our EBITDA forecasts. We maintain our Buy rating on the shares and bump our target price to $11 from $10 based on our DCF analysis.
I am moving SOI from the Sweet 16 to our Small-Cap Growth Portfolio, but I think it will be one of the strongest oilfield service firms during the rebound phase of this cycle.