Select Energy Services (WTTR) AI Stock Analysis

• Market Cap: $995.59M
• Dividend Yield: 3.36%
• Average Volume (3M): 1.20M
• Price to Earnings (P/E): 25.5
• Beta (1Y): 1.15
• Revenue Growth: -2.46%
• EPS Growth: -44.11%
• Country: US
• Employees: 3,700
• Sector: Energy
• Sector Strength: 44
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.13
• Shares Outstanding: 105,044,860
• 10 Day Avg. Volume: 1,306,943
• 30 Day Avg. Volume: 1,201,479
• 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: 1.28
• Enterprise Value/Revenue: 0.87
• Enterprise Value/Gross Profit: 5.78
• Enterprise Value/Ebitda: 5.54
• 1Y Price Target: $12.67
• Price Target Upside: 54.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 59 Neutral
• Price Target: $9.00 ▲(9.62% Upside)

The overall stock score reflects a mixed financial performance with stable gross margins but declining revenues and cash flow challenges. Technical indicators suggest bearish momentum, while valuation metrics indicate potential overvaluation. The positive outlook from the earnings call, driven by growth in the Water Infrastructure segment, provides some optimism.

Select Energy Services Business Overview & Revenue Model

Company Description

Select Energy Services, Inc., an oilfield services company, provides water management and chemical solutions to the onshore oil and gas industry in the United States. The company operates through three segments: Water Services, Water Infrastructure, and Oilfield Chemicals. The Water Services segment provides water-related services, including water transfer, flow back and well testing, water containment, fluids hauling, water monitoring, and water network automation; technology solutions comprising hydrographic mapping, water volume and quality monitoring, remote pit and tank monitoring, leak detection, asset and fuel tracking, and automated-equipment services, as well as various on-site rental equipment and workforce accommodation services. The Water Infrastructure segment develops, builds, and operates semi-permanent and permanent pipeline infrastructure solutions to support oil and gas well development. The Oilfield Chemicals segment develops, manufactures, and provides a suite of chemicals, water treatment solutions, and services used in hydraulic fracturing, stimulation, cementing, production, pipelines, and well completions, including polymers, viscosity, crosslinkers, friction reducers, surfactants, buffers, breakers, and other chemical technologies to pressure pumping service companies. This segment also offers production chemical solutions for underperforming wells and ancillary oilfield services comprising corrosion and scale monitoring, chemical inventory management, well failure analysis, and lab services. Select Energy Services, Inc. was incorporated in 2016 and is headquartered in Houston, Texas.

How the Company Makes Money

Select Energy Services generates revenue through several key streams, primarily by offering water management services to exploration and production companies in the oil and gas sector. The company charges fees for its services, which include sourcing, transporting, and treating water for hydraulic fracturing processes. Additionally, Select Energy Services benefits from long-term contracts with major oil and gas operators, which provide predictable revenue. Strategic partnerships with other energy service providers and investments in technology to improve operational efficiency also contribute to its earnings. The demand for water management services, driven by the ongoing need for hydraulic fracturing and environmental compliance, plays a significant role in the company's revenue generation.

Select Energy Services Financial Statement Overview

Summary

Select Energy Services shows stable gross margins and a strong equity base, but faces declining revenues and profitability pressures. Cash flow issues, particularly in free cash flow, pose potential liquidity risks.

Income Statement

Select Energy Services shows a mixed performance in its income statement. The gross profit margin is stable at around 15%, indicating consistent cost management. However, the net profit margin is relatively low at 2.4%, suggesting limited profitability. The revenue growth rate is negative, reflecting a decline in sales, which is a concern. The EBIT and EBITDA margins are modest, indicating operational efficiency but with room for improvement.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.37, indicating moderate leverage. The return on equity is low at 4.5%, suggesting limited returns for shareholders. The equity ratio is healthy, showing a strong equity base relative to total assets, which enhances financial stability.

Cash Flow

Cash flow analysis reveals challenges, with a significant decline in free cash flow growth, indicating potential liquidity issues. The operating cash flow to net income ratio is below 1, suggesting that cash generation from operations is not fully covering net income. The free cash flow to net income ratio is low, highlighting limited cash available after capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.46B	1.45B	1.59B	1.39B	764.62M	605.11M
Gross Profit	220.16M	219.47M	231.66M	160.75M	20.86M	-29.27M
EBITDA	229.92M	213.28M	166.31M	164.03M	44.51M	-299.40M
Net Income	33.04M	30.64M	74.40M	48.28M	-49.81M	-401.73M
Balance Sheet
Total Assets	1.55B	1.37B	1.22B	1.22B	950.19M	875.36M
Cash, Cash Equivalents and Short-Term Investments	51.19M	19.98M	57.08M	7.32M	85.80M	169.04M
Total Debt	41.02M	132.74M	53.55M	80.16M	67.31M	75.31M
Total Liabilities	623.37M	450.75M	326.02M	339.13M	255.02M	169.48M
Stockholders Equity	799.28M	793.52M	772.49M	765.98M	592.10M	593.06M
Cash Flow
Free Cash Flow	-20.94M	61.73M	149.49M	-38.65M	-56.24M	84.57M
Operating Cash Flow	197.17M	234.89M	285.36M	33.23M	-16.25M	105.81M
Investing Cash Flow	-302.00M	-318.62M	-137.17M	-53.25M	-64.46M	-5.39M
Financing Cash Flow	139.60M	46.64M	-98.42M	-58.45M	-2.54M	-10.71M

Select Energy Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.21
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 8.21 is below the 20-day moving average (MA) of 9.05, below the 50-day MA of 9.04, and below the 200-day MA of 10.68, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 34.22 is Neutral, neither overbought nor oversold. The STOCH value of 13.80 is Positive, 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
XPRO	77 Outperform	$1.20B	17.84	4.78%	―	2.67%	―
INVX	72 Outperform	$1.11B	5.69	15.64%	―	82.86%	―
RES	69 Neutral	$977.33M	17.81	4.92%	3.47%	-2.74%	-54.52%
HLX	68 Neutral	$843.70M	17.75	3.27%	―	-8.19%	―
SEI	66 Neutral	$1.85B	46.30	6.99%	1.75%	62.66%	-8.07%
WTTR	59 Neutral	$995.59M	25.49	4.18%	3.36%	-2.46%	-44.11%
Sector *	57 Neutral	£7.39B	-1.86	-6.21%	6.73%	6.34%	-82.38%

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.