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Select Energy Services Inc (WTTR)
NYSE:WTTR
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Select Energy Services
(NYSE:WTTR)
Select Model
Select Model
Rating:62Neutral
Price Target:
$12.00
â–²(7.43% Upside)
Select Energy Services' overall stock score reflects a mixed financial performance with operational efficiency but challenges in revenue growth and cash flow management. The technical analysis suggests potential short-term weakness, while the valuation indicates overvaluation. However, the positive sentiment from the earnings call, driven by strategic advancements and strong cash flow management, provides a more optimistic outlook.
Positive Factors
Long-term Contracts
Long-term contracts provide revenue stability and predictability, enhancing financial planning and operational efficiency.
Chemical Technologies Growth
Growth in Chemical Technologies indicates successful product innovation and market share expansion, supporting future revenue growth.
Mineral Extraction Initiative
The lithium extraction initiative diversifies revenue streams and taps into the growing demand for lithium, enhancing long-term growth prospects.
Negative Factors
Decline in Water Services Revenue
A decline in Water Services revenue due to divestments and lower customer activity could impact overall revenue stability and growth.
Decreased Water Infrastructure Revenue
Decreased revenue in Water Infrastructure suggests potential vulnerabilities to oil price fluctuations, affecting segment profitability.
Increased SG&A Costs
Rising SG&A costs can strain profitability and indicate challenges in cost management, potentially impacting future earnings.
Select Energy Services (WTTR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.35B
Dividend Yield2.62%
Average Volume (3M)1.37M
Price to Earnings (P/E)57.6
Beta (1Y)1.33
Revenue Growth-4.60%
EPS Growth-67.28%
CountryUS
Employees3,700
SectorEnergy
Sector Strength52
IndustryRegulated Water
Share Statistics
EPS (TTM)0.03
Shares Outstanding104,908,610
10 Day Avg. Volume1,385,851
30 Day Avg. Volume1,370,858
Financial Highlights & Ratios
PEG Ratio-0.76
Price to Book (P/B)1.67
Price to Sales (P/S)0.91
P/FCF Ratio21.44
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue0.90
Enterprise Value/Gross Profit5.20
Enterprise Value/Ebitda5.90
Forecast
1Y Price Target
$15.00Price Target Upside34.29% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Select Energy Services Business Overview & Revenue Model
Company DescriptionSelect Energy Services (WTTR) is a leading provider of water solutions for the oil and gas industry, specializing in water sourcing, transportation, treatment, and disposal. The company operates primarily in the upstream sector and offers a comprehensive suite of services that support exploration and production activities. Select Energy Services is committed to providing environmentally responsible water management solutions that enhance operational efficiency while minimizing environmental impact.
How the Company Makes MoneySelect Energy Services generates revenue through multiple key streams, primarily by offering water management services to oil and gas exploration and production companies. Their revenue model includes charging fees for water sourcing, transportation, and disposal services. Additionally, the company earns income from water treatment services, which involve the purification and recycling of produced water. Significant partnerships with major oil and gas operators enhance their service capabilities and market reach, contributing substantially to their earnings. The cyclical nature of the oil and gas industry also influences their financial performance, with revenues typically increasing in periods of high drilling activity and decreasing during downturns.
Select Energy Services Earnings Call Summary
Earnings Call Date:Nov 04, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 24, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in securing long-term contracts and growth in Chemical Technologies, supported by strong cash flow management. However, challenges in the Water Services segment and increased SG&A costs tempered the overall positive outlook.Q3-2025 Updates
Positive Updates
Strong Water Infrastructure Contracts
Secured several new midstream contracts in the Permian Basin, adding over 65,000 additional acres under long-term dedication. Added nearly 800,000 additional acres under dedication during 2025 alone.
Chemical Technologies Growth
Chemical Technologies segment achieved a sequential revenue increase of 13% and gross margins before D&A of 19.9%, resulting in a 29% increase in gross profit before D&A.
Mineral Extraction Initiative
Announced groundbreaking of Texas' first commercial produced water lithium extraction facility. Expected royalty payments of $2.5 million per year beginning in early 2027, ramping up to $5 million per year.
Resilient Cash Flow
Cash flow from operating activities of $72 million, outpacing adjusted EBITDA, indicating strong cash flow management.
Negative Updates
Decline in Water Services Revenue
Water Services segment saw revenues decrease by approximately 23% sequentially, impacted by divestment of legacy trucking operations and lower customer activity.
Decreased Water Infrastructure Revenue
Water Infrastructure revenue decreased 2.5% due to reduced skim oil sales and lower realized oil prices, despite stable disposal and recycling volumes.
Increased SG&A Costs
SG&A increased to $42 million during the third quarter due to severance and deal costs, including from the Omni transaction.
Company Guidance
During Select Water Solutions' third quarter 2025 earnings call, the company highlighted a robust financial performance with key strategic advancements across its segments. Water Infrastructure maintained strong margins at 53%, despite a 2.5% revenue decrease, driven by consistent disposal and recycling volumes. This segment is projected to grow by 10% in Q4 and over 20% in 2026. Chemical Technologies saw a 13% revenue increase and a gross margin improvement to 19.9%, attributed to new product developments and market share gains. Water Services experienced a 23% revenue decline, primarily due to a divestment, but margins are expected to improve to 19-20% in Q4. Select Water Solutions secured new contracts, expanding its recycled water operations to nearly 1 million barrels per day in the Permian Basin, and signed a new water transfer contract covering 300,000 acres. The company also announced a long-term partnership for lithium extraction from produced water, projecting royalty payments of $2.5 million annually starting in 2027. The call emphasized the company's focus on infrastructure growth, recycling solutions, and beneficial reuse technologies, aiming for a 20% growth in Water Infrastructure in 2026.Select Energy Services Financial Statement Overview
Summary
Select Energy Services exhibits a mixed financial performance. While the company shows operational efficiency and a stable balance sheet, challenges remain in revenue growth and cash flow management. The company should focus on reversing the negative revenue trend and improving cash flow to enhance overall financial health.Income Statement
Select Energy Services has shown a mixed performance in its income statement. The TTM data indicates a slight decline in revenue growth at -3.37%, but the company maintains a stable gross profit margin of approximately 15.09%. The net profit margin is modest at 2.26%, reflecting some profitability. However, the EBIT margin of 4.64% and EBITDA margin of 15.76% suggest operational efficiency. The company needs to focus on reversing the negative revenue growth trend to improve its financial health.Balance Sheet
The balance sheet of Select Energy Services shows a solid equity base with a debt-to-equity ratio of 0.39, indicating moderate leverage. The return on equity (ROE) is 4.15%, which is relatively low but stable. The equity ratio is not explicitly calculated, but the company's equity position appears strong relative to its total assets. Overall, the balance sheet reflects financial stability with manageable debt levels.Cash Flow
Cash flow analysis reveals some challenges for Select Energy Services. The free cash flow growth rate is significantly positive at 191.99%, but the free cash flow itself is negative, indicating potential liquidity issues. The operating cash flow to net income ratio is 0.90, suggesting that operating cash flow is nearly covering net income. However, the negative free cash flow to net income ratio of -0.11 highlights the need for improved cash management.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.41B | 1.45B | 1.59B | 1.39B | 764.62M | 605.11M |
| Gross Profit | 244.84M | 219.47M | 231.66M | 160.75M | 20.86M | -29.27M |
| EBITDA | 215.67M | 211.02M | 165.29M | 174.03M | 44.30M | -299.40M |
| Net Income | 19.93M | 30.64M | 74.40M | 48.28M | -42.23M | -338.68M |
Balance Sheet | ||||||
| Total Assets | 1.59B | 1.37B | 1.22B | 1.22B | 950.19M | 875.36M |
| Cash, Cash Equivalents and Short-Term Investments | 17.83M | 19.98M | 57.08M | 7.32M | 85.80M | 169.04M |
| Total Debt | 338.48M | 132.74M | 53.55M | 80.16M | 67.31M | 75.31M |
| Total Liabilities | 656.50M | 450.75M | 326.02M | 339.13M | 255.02M | 169.48M |
| Stockholders Equity | 808.11M | 793.52M | 772.49M | 765.98M | 592.10M | 593.06M |
Cash Flow | ||||||
| Free Cash Flow | -61.15M | 61.73M | 149.49M | -38.65M | -56.24M | 84.57M |
| Operating Cash Flow | 216.99M | 234.89M | 285.36M | 33.23M | -16.25M | 105.81M |
| Investing Cash Flow | -388.09M | -318.62M | -137.17M | -53.25M | -64.46M | -5.39M |
| Financing Cash Flow | 177.99M | 46.64M | -98.42M | -58.45M | -2.54M | -10.71M |
Select Energy Services Technical Analysis
Positive
11.17
Price Trends
10.75
Positive
10.31
Positive
9.51
Positive
Market Momentum
0.14
Negative
56.72
Neutral
61.54
Neutral
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 11.17 is above the 20-day moving average (MA) of 10.83, above the 50-day MA of 10.75, and above the 200-day MA of 9.51, indicating a bullish trend. The MACD of 0.14 indicates Negative momentum. The RSI at 56.72 is Neutral, neither overbought nor oversold. The STOCH value of 61.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WTTR.
Select Energy Services Peers Comparison
UnderperformOutperform
Sector (65)
WTTR
Select Energy Services
11.28
-2.49
-18.08%
HTO
H2O America
51.81
7.14
15.98%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.