Select Energy Services (WTTR) AI Stock Analysis

• Market Cap: $1.01B
• Dividend Yield: 3.22%
• Average Volume (3M): 1.18M
• Price to Earnings (P/E): 24.3
• Beta (1Y): 1.20
• Revenue Growth: -4.91%
• EPS Growth: -46.51%
• Country: US
• Employees: 3,700
• Sector: Basic Materials
• Sector Strength: 63
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.08
• Shares Outstanding: 103,994,140
• 10 Day Avg. Volume: 1,075,124
• 30 Day Avg. Volume: 1,175,583
• PEG Ratio: -0.79
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.46
• 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: $13.67
• Price Target Upside: 69.39% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 69 Neutral
• Price Target: $9.50 ▲( 17.72% Upside)

Select Energy Services presents a mixed outlook. The company benefits from strong financial recovery and strategic growth in its water infrastructure segment, as highlighted in the recent earnings call. However, technical indicators suggest bearish trends, and valuation metrics indicate potential overvaluation. The company's focus on operational efficiency and strategic contracts is a positive, but challenges from external market conditions and increased capital expenditures could impact 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 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: 8.07
• 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 8.07 is below the 20-day moving average (MA) of 8.40, below the 50-day MA of 8.92, and below the 200-day MA of 11.28, indicating a bearish trend. The MACD of -0.18 indicates Negative momentum. The RSI at 41.56 is Neutral, neither overbought nor oversold. The STOCH value of 34.61 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	76 Outperform	$1.03B	13.23	7.06%	3.52%	-9.78%	-49.45%
INVX	75 Outperform	$1.02B	5.41	13.87%	―	72.10%	―
WTTR	69 Neutral	$1.01B	24.35	4.51%	3.22%	-4.91%	-46.51%
XPRO	68 Neutral	$908.13M	13.46	4.91%	―	10.48%	―
SEI	68 Neutral	$1.52B	45.52	5.52%	2.21%	33.59%	-27.16%
HLX	66 Neutral	$974.34M	11.28	5.64%	―	0.34%	―
Sector *	50 Neutral	$1.98B	-1.07	-21.34%	3.71%	2.03%	-30.65%

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.