Select Energy Services (WTTR) AI Stock Analysis

• Market Cap: $1.25B
• Dividend Yield: 2.5%
• Average Volume (3M): 1.92M
• Price to Earnings (P/E): 34.5
• Beta (1Y): 1.49
• Revenue Growth: -8.41%
• EPS Growth: -58.49%
• Country: US
• Employees: 3,700
• Sector: Basic Materials
• Sector Strength: 59
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.30
• Shares Outstanding: 103,611,336
• 10 Day Avg. Volume: 3,053,504
• 30 Day Avg. Volume: 1,920,677
• PEG Ratio: 1.72
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.84
• Price to Cash Flow (P/CF): 4.50
• P/FCF Ratio: 4.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $17.00
• Price Target Upside: 61.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Select Energy Services' overall score reflects robust financial recovery and strategic growth initiatives, particularly in the water infrastructure segment. However, the stock faces bearish technical indicators and a high P/E ratio, suggesting caution. The positive earnings call guidance and strategic corporate actions support a moderately positive outlook.

Select Energy Services Business Overview & Revenue Model

Company Description

Select Energy Services, Inc. (WTTR) is a leading provider of sustainable water and chemical solutions to the energy industry. The company operates mainly in the oil and gas sectors, offering a wide range of services that include water sourcing, transfer, recycling, treatment, and disposal. With a strong focus on environmental stewardship and operational efficiency, Select Energy Services delivers integrated, end-to-end solutions that support exploration and production activities across various oil and gas basins in the United States.

How the Company Makes Money

Select Energy Services generates revenue primarily through its comprehensive suite of water management services tailored for the oil and gas industry. The company earns money by offering water sourcing and transfer services, which are essential for hydraulic fracturing and other extraction processes. Additionally, Select Energy provides water recycling and treatment services, allowing energy companies to minimize freshwater usage and comply with environmental regulations. The company also offers well chemical solutions, including production chemicals and drilling fluids, which are critical for optimizing well performance and maintaining operational efficiency. Revenue is further supported by strategic partnerships and long-term contracts with major oil and gas operators, ensuring a steady demand for its diverse service offerings.

Select Energy Services Financial Statement Overview

Summary

Select Energy Services demonstrates a strong financial recovery post-2020 with improved revenues and profitability metrics. The balance sheet remains solid with low leverage, and cash flows are generally healthy despite a recent dip in free cash flow. The company is poised for growth but should monitor capital expenditure impacts on free cash flow sustainability.

Income Statement

Select Energy Services has exhibited a recovery in revenue over recent years with growth from $605M in 2020 to approximately $1.45B in 2024. The gross profit margin has improved significantly from negative figures in 2020 to about 15.1% in 2024. However, the net profit margin has decreased slightly from 4.7% in 2023 to 4.3% in 2024, indicating some pressure on net profitability. The EBIT and EBITDA margins show consistent improvement, reflecting operational efficiency gains.

Balance Sheet

The debt-to-equity ratio remains low, indicating conservative leverage with improved financial health. The equity ratio is strong at approximately 58%, showing a solid equity foundation. Return on equity decreased slightly in 2024 compared to 2023, reflecting a minor decline in net income. Overall, the company maintains a robust balance sheet with manageable liabilities and strong equity.

Cash Flow

Operating cash flow shows resilience and growth in recent years, although free cash flow decreased from $149M in 2023 to $61M in 2024, indicating increased capital expenditures. The free cash flow to net income ratio remains positive, suggesting the company generates adequate free cash flow relative to net income, but the recent decline could point to rising investment needs.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.45B	1.59B	1.39B	764.62M	605.11M
	Gross Profit
219.47M	231.66M	160.75M	20.86M	-29.27M
	EBIT
54.49M	61.19M	39.16M	-63.97M	-394.78M
	EBITDA
211.02M	166.31M	164.03M	44.51M	-299.40M
	Net Income Common Stockholders
30.64M	74.40M	48.28M	-49.81M	-401.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
19.98M	57.08M	7.32M	85.80M	169.04M
	Total Assets
1.37B	1.22B	1.22B	950.19M	875.36M
	Total Debt
132.74M	53.55M	80.16M	67.31M	75.31M
	Net Debt
112.76M	-3.54M	72.84M	-18.49M	-93.73M
	Total Liabilities
450.75M	326.02M	339.13M	255.02M	169.48M
	Stockholders Equity
793.52M	772.49M	765.98M	592.10M	593.06M
Cash Flow		Free Cash Flow
61.73M	149.49M	-38.65M	-56.24M	84.57M
	Operating Cash Flow
234.89M	285.36M	33.23M	-16.25M	105.81M
	Investing Cash Flow
-318.62M	-137.17M	-53.25M	-64.46M	-5.39M
	Financing Cash Flow
46.64M	-98.42M	-58.45M	-2.54M	-10.71M

Select Energy Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WTTR, the sentiment is Negative. The current price of 10.5 is above the 20-day moving average (MA) of 10.16, below the 50-day MA of 11.77, and below the 200-day MA of 11.75, indicating a neutral trend. The MACD of -0.33 indicates Negative momentum. The RSI at 45.17 is Neutral, neither overbought nor oversold. The STOCH value of 64.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WTTR.

Select Energy Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RES	70 Outperform	$1.18B	12.84	8.55%	2.93%	-12.52%	-52.79%
WTTR	64 Neutral	$1.25B	34.53	3.91%	2.50%	-8.41%	-58.49%
LBRT	63 Neutral	$2.56B	8.47	16.54%	1.83%	-9.11%	-40.79%
OIS	57 Neutral	$323.11M	―	-1.62%	―	-11.47%	-187.17%
NINE	47 Neutral	$48.70M	―	73.91%	―	-9.09%	-15.47%
Sector *	47 Neutral	$2.65B	-3.07	-22.25%	3.27%	3.70%	-29.53%
WTI	45 Neutral	$233.26M	―	203.83%	2.53%	-1.39%	-655.53%

Select Energy Services Corporate Events

Select Energy Services Strengthens Board with New Appointments

On January 24, 2025, Select Water Solutions expanded its Board of Directors to nine members by appointing Timothy A. Roberts and Bruce E. Cope, CPA. This strategic move enhances the board’s expertise with their extensive experience in the oil and gas sector, particularly in accounting, finance, and midstream operations. The appointments align with Select’s growth strategy, aiming to strengthen midstream partnerships and optimize business operations. Meanwhile, director Troy W. Thacker announced he will not seek re-election at the upcoming 2025 Annual Meeting to focus on other business ventures, marking nearly five years of service on the board.

Select Energy Services Secures New Sustainability-Linked Credit Facility

On January 24, 2025, Select Water Solutions entered into a new five-year, $550 million sustainability-linked credit facility, replacing its previous credit agreement. This facility includes a $300 million revolving credit commitment and a $250 million term loan, enhancing the company’s financial stability and liquidity to support growth in its sustainable water infrastructure networks and recycling technologies. The agreement incentivizes Select Water Solutions with reduced borrowing costs for achieving sustainability targets and emphasizes the company’s commitment to environmental stewardship and safety. This strategic move is expected to strengthen Select’s balance sheet, expand liquidity, and support its growth through organic and acquisition opportunities, underlined by the company’s significant contracted infrastructure projects.