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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:61Neutral
Price Target:
$9.50
â–¼(-14.03% Downside)
Select Energy Services faces challenges with declining revenues and profitability pressures, impacting its financial performance. Technical indicators suggest a bearish trend, and valuation metrics indicate potential overvaluation. However, strong growth in the Water Infrastructure segment and strategic initiatives provide a positive outlook, balancing some of the risks.
Select Energy Services (WTTR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.34B
Dividend Yield2.61%
Average Volume (3M)1.15M
Price to Earnings (P/E)33.3
Beta (1Y)1.19
Revenue Growth-2.46%
EPS Growth-44.11%
CountryUS
Employees3,700
SectorEnergy
Sector Strength52
IndustryRegulated Water
Share Statistics
EPS (TTM)0.13
Shares Outstanding105,044,860
10 Day Avg. Volume1,396,785
30 Day Avg. Volume1,147,999
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 Cap0.95
Enterprise Value/Revenue0.87
Enterprise Value/Gross Profit5.78
Enterprise Value/Ebitda5.54
Forecast
1Y Price Target
$11.50Price Target Upside4.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Select Energy Services Business Overview & Revenue Model
Company DescriptionSelect Water Solutions, Inc. engages in the provision of water management and chemical solutions. It operates through the following business segments: Water Infrastructure, Water Services, and Chemical Technologies. The Water Infrastructure segment develops, builds, and operates permanent and semi-permanent infrastructure solutions to support full life cycle water management and waste treatment solutions. The Water Services segment consists of services businesses, including water transfer, flowback and well testing, fluids hauling, water containment and water network automation, primarily serving E&P companies. The Chemical Technologies segment includes logistics and provides a full suite of chemicals used in hydraulic fracturing, stimulation, cementing, pipelines and well completions. The company was founded on November 21, 2016 and is headquartered in Gainesville, TX.
How the Company Makes MoneySelect 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 Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
Select Water Solutions demonstrated strong performance in its Water Infrastructure segment and executed strategic transactions to support long-term growth. However, declines in Water Services and Chemical Technologies segments, along with market challenges, present short-term hurdles.Q2-2025 Updates
Positive Updates
Increased Profitability and Margins
Select Water Solutions improved net income by 22% and adjusted EBITDA by 13% in Q2 2025. Operating margins increased across each segment, resulting in consolidated gross margin gains of nearly 2 percentage points.
Water Infrastructure Growth
The Water Infrastructure segment achieved a 12% revenue increase and a 15% growth in gross profit before D&A, with margins reaching 55%. The segment is expected to grow 20% year-over-year in 2026.
Strategic Transactions and Agreements
Signed several new long-term agreements for projects in New Mexico, adding scale to contracted acreage. Executed a transaction with OMNI Environmental Solutions, resulting in strategic growth of infrastructure business.
Expansion of Distributed Power Generation
Peak Rentals is scaling into the distributed power sector, secured a long-term exclusivity agreement for a proprietary battery storage solution, and integrated battery power systems alongside generators.
Negative Updates
Decline in Water Services and Chemical Technologies
Water Services revenues decreased by 4% in Q2 2025, with further reductions expected in H2 2025. Chemical Technologies saw an 11% revenue decline in Q2, exceeding guided expectations.
Market Challenges Impacting Activity
Macro activity environment presents challenges for completions-oriented parts of the water services and chemical businesses, affecting short-term outlook.
Company Guidance
During the second quarter of 2025, Select Water Solutions reported a 22% increase in net income and a 13% rise in adjusted EBITDA, with consolidated gross margin gains of nearly 2 percentage points. The Water Infrastructure segment achieved significant growth with a 12% increase in revenues and a 15% growth in gross profit before depreciation and amortization (D&A), resulting in a robust 55% gross margin before D&A. The company successfully secured several long-term contracts, expanding its footprint in New Mexico by adding 60,000 acres of leasehold dedication and 385,000 acres under right of first refusal agreements. Looking ahead, Select expects a strong 10% sequential revenue growth in the fourth quarter of 2025 and anticipates a 20% year-over-year growth in the Water Infrastructure segment in 2026. Despite some challenges in the Water Services and Chemical Technologies segments, the company maintains a solid position with strong liquidity and a focus on strategic growth initiatives.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.65
Positive
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.70
Positive
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.55
Neutral
| 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 | 311.86M | 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
Positive
11.05
Price Trends
9.01
Positive
8.85
Positive
10.07
Positive
Market Momentum
0.58
Negative
80.32
Negative
92.19
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 11.05 is above the 20-day moving average (MA) of 9.37, above the 50-day MA of 9.01, and above the 200-day MA of 10.07, indicating a bullish trend. The MACD of 0.58 indicates Negative momentum. The RSI at 80.32 is Negative, neither overbought nor oversold. The STOCH value of 92.19 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
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Performance Comparison
WTTR
Select Energy Services
11.05
0.23
2.13%
HTO
H2O America
48.41
-7.87
-13.98%
ARIS
Aris Water Solutions
24.66
8.13
49.18%
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.