Aris Water Solutions (ARIS) AI Stock Analysis

• Market Cap: $1.44B
• Dividend Yield: 2.02%
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): 29.2
• Beta (1Y): 1.76
• Revenue Growth: 16.42%
• EPS Growth: 12.98%
• Country: US
• Employees: 276
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 0.33
• Shares Outstanding: 32,709,034
• 10 Day Avg. Volume: 1,146,097
• 30 Day Avg. Volume: 1,252,741
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 3.41
• Enterprise Value/Gross Profit: 8.60
• Enterprise Value/Ebitda: 8.75
• 1Y Price Target: $25.43
• Price Target Upside: 4.78% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

• Rating: 69 Neutral
• Price Target: $26.00 ▲(7.13% Upside)

Aris Water Solutions demonstrates strong financial performance and positive corporate developments, such as the merger with Western Midstream Partners. However, valuation concerns and technical resistance temper the overall outlook.

Positive Factors

Business Prospects

Progress in beneficial reuse and mineral recovery could enhance ARIS’s business prospects.

Financial Performance

ARIS reported 1Q25 results above expectations, benefiting from deferred costs.

Strategic Acquisitions

The purchase of the McNeill Ranch for $45 million is seen as a favorable price and has promising geology for disposal wells.

Negative Factors

Commodity Prices

Expected slower Permian Basin growth in response to lower commodity prices.

Producer Activity

Downside risks to the target price include slower producer activity in the Permian.

Revenue Impact

ARIS projects a one-time weather-related impact of $1.5 million to affect 1Q25 EBITDA.

Aris Water Solutions Business Overview & Revenue Model

Company Description

Aris Water Solutions, Inc., an environmental infrastructure and solutions company, provides water handling and recycling solutions. The company's produced water handling business gathers, transports, unless recycled, and handles produced water generated from oil and natural gas production. Its water solutions business develops and operates recycling facilities to treat, store, and recycle produced water. The company was founded in 2015 and is headquartered in Houston, Texas.

How the Company Makes Money

Aris Water Solutions makes money by providing essential water management services to the oil and gas sectors. The company generates revenue through various streams such as fees for water sourcing, transportation, and disposal for energy producers. Additionally, ARIS earns revenue by offering advanced water recycling solutions that enable its clients to reuse water in drilling and production activities, thereby reducing their freshwater consumption and operational costs. Key partnerships with major oil and gas companies enhance ARIS's market presence and contribute significantly to its earnings by securing long-term contracts and recurring service agreements.

Aris Water Solutions Financial Statement Overview

Summary

Aris Water Solutions showcases strong revenue growth and improved profitability, with a significant increase in revenue and net profit margin. The balance sheet is stable with moderate leverage, though rising debt levels need monitoring. Cash flow generation is robust, but high capital expenditures could impact future cash reserves.

Income Statement

Aris Water Solutions demonstrated strong revenue growth with a significant increase from $321 million in 2022 to $452.5 million in TTM (Trailing-Twelve-Months), reflecting a healthy expansion trajectory. Gross profit margin improved to 40.7% from previous periods, indicating enhanced cost management. Net Profit Margin also improved to 6.2% in the TTM, showing better profitability. However, the EBITDA margin slightly declined to 39.0%, suggesting some pressure on operating profitability.

Balance Sheet

The company's balance sheet shows a stable structure with a debt-to-equity ratio of 1.25, indicating moderate leverage. The equity ratio stands at 28.2%, which is solid but leaves room for improvement. Return on Equity increased to 6.8% in TTM, highlighting improved efficiency in generating profits from equity. However, the rising debt levels to $508 million could pose future risks if not managed effectively.

Cash Flow

Aris Water Solutions displays a positive cash flow trajectory with Free Cash Flow growing from $14.1 million in 2023 to $27.4 million in TTM, reflecting improved cash generative capabilities. The operating cash flow to net income ratio is robust at 4.61, indicating efficient earnings conversion. However, the high capital expenditures remain a concern, impacting free cash flow stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	475.50M	435.44M	392.12M	321.00M	229.25M	171.47M
Gross Profit	188.65M	177.89M	137.51M	114.00M	77.57M	32.01M
EBITDA	185.29M	185.91M	160.39M	135.50M	79.53M	54.46M
Net Income	28.53M	26.86M	18.89M	1.70M	-9.22M	7.00K
Balance Sheet
Total Assets	1.48B	1.42B	1.34B	1.30B	1.13B	1.06B
Cash, Cash Equivalents and Short-Term Investments	57.36M	28.67M	5.06M	1.12M	60.05M	24.93M
Total Debt	512.31M	459.59M	443.65M	428.92M	392.05M	297.00M
Total Liabilities	689.21M	684.83M	652.59M	646.28M	524.15M	349.51M
Stockholders Equity	412.86M	348.62M	323.90M	309.51M	212.87M	708.29M
Cash Flow
Free Cash Flow	102.97M	78.89M	14.14M	-76.31M	-15.85M	-71.82M
Operating Cash Flow	186.89M	178.88M	183.87M	70.21M	58.81M	67.77M
Investing Cash Flow	-140.20M	-145.57M	-149.58M	-136.93M	-74.66M	-139.59M
Financing Cash Flow	-852.00K	-9.70M	-30.35M	7.78M	50.98M	89.67M

Aris Water Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 24.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARIS, the sentiment is Positive. The current price of 24.27 is above the 20-day moving average (MA) of 23.23, above the 50-day MA of 22.91, and below the 200-day MA of 25.33, indicating a neutral trend. The MACD of 0.45 indicates Negative momentum. The RSI at 62.54 is Neutral, neither overbought nor oversold. The STOCH value of 75.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARIS.

Aris Water Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSEX	76 Outperform	$964.61M	22.21	9.70%	2.54%	11.91%	16.88%
ARTNA	74 Outperform	$342.75M	15.26	9.34%	3.67%	7.13%	22.19%
CWCO	74 Outperform	$529.88M	34.09	7.94%	1.41%	-26.34%	-61.52%
ARIS	69 Neutral	$1.44B	29.18	7.11%	2.02%	16.42%	12.98%
HTO	69 Neutral	$1.78B	16.50	7.50%	1.67%	12.40%	11.98%
Sector *	67 Neutral	$17.51B	18.13	5.33%	3.62%	7.33%	12.21%
YORW	61 Neutral	$448.07M	22.68	8.56%	2.79%	4.09%	-14.30%

Aris Water Solutions Corporate Events

Aris Water Solutions Merges with Western Midstream Partners

On August 6, 2025, Aris Water Solutions, Inc. entered into a merger agreement with Western Midstream Partners, LP, resulting in Aris becoming a wholly owned subsidiary of WES. The merger is structured through a series of mergers involving multiple subsidiaries and includes various forms of consideration for shareholders. The agreement outlines customary conditions and covenants, including shareholder approval and regulatory clearances. The merger is expected to impact the company’s operations by aligning it more closely with WES’s strategic goals, potentially enhancing its market position and offering financial benefits to stakeholders.

Aris Water Solutions Merges with Western Midstream

On August 6, 2025, Aris Water Solutions, Inc. entered into a merger agreement with Western Midstream Partners, LP, whereby WES will acquire all outstanding shares of Aris in a transaction valued at approximately $1.5 billion. This merger is expected to enhance WES’s competitive position by creating a differentiated produced-water system in the Delaware Basin, expanding its footprint in New Mexico, and diversifying its customer base through Aris’s long-term contracts. The transaction, which includes a mix of equity and cash, is anticipated to close in the fourth quarter of 2025, subject to regulatory and shareholder approvals.

Aris Water Solutions Extends Key Agreement with ConocoPhillips

On July 30, 2025, Aris Water Solutions announced a seven-year extension of its Water Gathering and Disposal Agreement with ConocoPhillips, extending the term to May 31, 2040. This extension solidifies Aris’s position in the industry by providing long-term revenue visibility and strengthening its partnership with ConocoPhillips, a key customer, while maintaining its operational focus in the Northern Delaware Basin.

Aris Water Solutions Elects Directors, Ratifies Auditor

On May 21, 2025, Aris Water Solutions held its Annual Meeting of Stockholders, where stockholders elected three Class I Directors to serve until the 2028 Annual Meeting and ratified the appointment of BDO USA, P.C. as the independent registered public accounting firm for the fiscal year ending December 31, 2025. These decisions are significant for the company’s governance and financial oversight, potentially impacting its strategic direction and stakeholder confidence.