Select Energy Services (WTTR) AI Stock Analysis

• Market Cap: $1.11B
• Dividend Yield: 3.04%
• Average Volume (3M): 1.02M
• Price to Earnings (P/E): 26.5
• Beta (1Y): 1.21
• Revenue Growth: -4.91%
• EPS Growth: -46.51%
• Country: US
• Employees: 3,700
• Sector: Basic Materials
• Sector Strength: 68
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.08
• Shares Outstanding: 103,994,140
• 10 Day Avg. Volume: 855,065
• 30 Day Avg. Volume: 1,020,058
• PEG Ratio: -0.10
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -22.76
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 0.16
• Enterprise Value/Gross Profit: 4.28
• Enterprise Value/Ebitda: 1.23
• 1Y Price Target: $13.67
• Price Target Upside: 49.89% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 69 Neutral
• Price Target: $10.00 ▲(9.65%Upside)

Select Energy Services demonstrates a solid financial and strategic position with promising growth in water infrastructure and recent contract wins. However, challenges such as high valuation and mixed technical indicators temper the overall outlook. Continued focus on improving free cash flow and navigating industry pressures will be crucial for future performance.

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 primarily through its water solutions and chemical technologies segments. The water solutions segment provides services such as water sourcing, transfer, containment, and treatment, which are essential for oil and gas exploration and production companies, particularly those involved in hydraulic fracturing. The chemical technologies segment offers chemical products and services that improve well performance and operational efficiency. Revenue is derived from service contracts with oil and gas operators, who require reliable water management and chemical solutions to ensure smooth and efficient extraction processes. The company's earnings are influenced by factors such as drilling activity levels, commodity prices, and technological advancements in water and chemical management. Select Energy Services also benefits from strategic partnerships and collaborations that enhance its service offerings and expand its market reach.

Select Energy Services Financial Statement Overview

Summary

Select Energy Services has demonstrated recovery with solid revenue growth and improving profitability. The balance sheet shows moderate leverage, while cash flow management indicates strong operational cash generation. However, there is room for improvement in margin enhancement and consistent free cash flow conversion.

Income Statement

Select Energy Services has shown a solid recovery in revenue and profitability over recent years. The TTM gross profit margin stands at 15.24%, with a net profit margin of 2.41%, indicating moderate profitability. Revenue growth has been observed, though margins could still improve. The EBIT margin is 4.32% and EBITDA margin is 15.25%, suggesting operational efficiency but room for enhanced cost management.

Balance Sheet

The company's balance sheet reflects a balanced financial structure with a debt-to-equity ratio of 0.37, indicating moderate leverage. The return on equity (ROE) at 4.44% highlights modest returns for shareholders. An equity ratio of 51.34% suggests a healthy proportion of equity financing, providing stability in its capital structure.

Cash Flow

Select Energy Services demonstrates stable cash flow management. The operating cash flow to net income ratio of 5.61 indicates robust cash generation relative to net income. However, free cash flow growth has been inconsistent, impacting overall cash flow assessment. The free cash flow to net income ratio stands at 0.28, suggesting some challenges in converting earnings into free cash flow.

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
222.56M	219.47M	231.66M	160.75M	20.86M	-29.27M
	EBIT
63.02M	54.49M	61.19M	39.16M	-63.97M	-394.78M
	EBITDA
222.74M	213.28M	166.31M	164.03M	44.51M	-299.40M
	Net Income Common Stockholders
35.26M	30.64M	74.40M	48.28M	-49.81M	-401.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
27.89M	19.98M	57.08M	7.32M	85.80M	169.04M
	Total Assets
1.55B	1.37B	1.22B	1.22B	950.19M	875.36M
	Total Debt
290.14M	132.74M	53.55M	80.16M	67.31M	75.31M
	Net Debt
262.25M	112.76M	-3.54M	72.84M	-18.49M	-93.73M
	Total Liabilities
628.26M	450.75M	326.02M	339.13M	255.02M	169.48M
	Stockholders Equity
793.08M	793.52M	772.49M	765.98M	592.10M	593.06M
Cash Flow		Free Cash Flow
9.88M	61.73M	149.49M	-38.65M	-56.24M	84.57M
	Operating Cash Flow
197.70M	234.89M	285.36M	33.23M	-16.25M	105.81M
	Investing Cash Flow
-314.24M	-318.62M	-137.17M	-53.25M	-64.46M	-5.39M
	Financing Cash Flow
131.69M	46.64M	-98.42M	-58.45M	-2.54M	-10.71M

Select Energy Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.12
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WTTR, the sentiment is Positive. The current price of 9.12 is above the 20-day moving average (MA) of 8.52, above the 50-day MA of 8.45, and below the 200-day MA of 11.12, indicating a neutral trend. The MACD of 0.15 indicates Negative momentum. The RSI at 60.44 is Neutral, neither overbought nor oversold. The STOCH value of 84.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WTTR.

Select Energy Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INVX	75 Outperform	$1.16B	6.42	13.87%	―	72.10%	―
RES	75 Outperform	$1.07B	14.40	7.06%	3.29%	-9.78%	-49.45%
XPRO	74 Outperform	$1.10B	16.33	4.91%	―	10.48%	―
SEI	74 Outperform	$1.88B	54.91	5.52%	1.72%	33.59%	-27.16%
HLX	71 Outperform	$1.07B	12.99	5.64%	―	0.34%	―
WTTR	69 Neutral	$1.11B	26.47	4.51%	3.04%	-4.91%	-46.51%
Sector *	51 Neutral	$2.04B	-1.23	-21.09%	3.96%	2.90%	-30.45%

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.