ProPetro Holding Corp. (PUMP): what the price assumes

In the published model solve dated 2026-Q2, anchored at $11.01, ProPetro Holding Corp. (PUMP) is priced for today's economics sustained for ~18.4 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/PUMP

Headline

FieldValue
TickerPUMP
CompanyProPetro Holding Corp.
Current price$11.01/sh
CompositionHydraulic Fracturing 73% / Wireline 16% / Cementing 10% / Power Generation 0% / Elimination of intersegment service revenue 0%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Trailing margin (depressed year)-1.0%
Must persist for18.4y
Multiple paid246x mid-cycle operating income

Solve inputs: computed at a 8.1% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.9 years.

Reconcile: at the x-ray's 9.3% required return this reads ~21.7 years; the models below use their own rates.

How unusual the bet is: elevated

ReferenceValue
vs own history-0.10σ
sustained it ~10 years at this level15%
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.49x2expensive
Earnings—0—
Relative1.26x2expensive
Growth—0—

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.8%); the inversion above states its own rate.

Per-Model Detail (n=4)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$20.680.53xnoReference only (OCF-based, capex excluded): OCF $0.2B
DCF Exit MultipleGrowth$0.00—noNegative/zero FCF or EBITDA — equity value floored at $0
Relative ValuationRelative$11.340.97xyesP/S fallback (negative EPS): Sector P/S 1.2x × TTM revenue — excluded from consensus
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$7.801.41xyesReference only (book value floor): BV/sh $7.80, ROE negative
Two-Stage Excess ReturnAsset$7.021.57xyesReference only (book value with convergence): BV/sh $7.80, ROE converges to ke
Discounted Future Market CapGrowth$4.412.50xnoRev $1.2B, growth -15% (input: historical growth; tapered), Terminal P/S: 0.9x / 1.2x / 1.4x (bear / base = today's held flat / bull, cap 6x)
Peter Lynch Fair ValueRelative$0.00—noNegative/zero EPS — earnings-based value floored at $0
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$3.373.27xnoNormalized EBIT (5y avg op income, one-time charges added back) $0.03B × (1−21%) / WACC 5.8% → EPV (no growth)
Residual IncomeAsset——no—
Graham NumberAsset——no—
EV/EBITDA RelativeRelative$7.131.54xyesEBITDA $0.16B × sector EV/EBITDA 6.0x
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings——no—
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$11.340.97xnoRevenue $1.16B × sector P/S 1.2x
PEG Fair ValueRelative——no—
Earnings YieldEarnings——no—
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$16.3m
Net debt / NOPAT (after-tax)3.56x
Net debt / operating income (pre-tax)2.81x
Interest coverage0.6x
Share count CAGR (dilution)4.2%
Burning cashno

Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 0.5%); the trailing year was depressed.

Bullet Takeaways

Bull Case

The number that decides ProPetro is fleet utilization, and it is the cleanest lever in the story. The company expects to run about 12 active frac fleets in the second quarter, up from 11 in the first, and its next-generation Tier 4 dual-fuel and FORCE electric fleets are currently sold out. In pressure pumping, sold-out premium equipment is the leading edge of pricing power, because once the high-spec fleets are committed, operators have to pay up for the next available capacity. That single shift, from idle to fully utilized premium fleets, is what flips the economics of a frac company from breakeven to strongly profitable.

The positioning is concentrated in the right place. ProPetro is a Permian-focused completions specialist, and the 10-K states the company believes its "substantial market presence in the Permian Basin positions us well to capitalize on drilling, completion activity and power demand in the region" (FY2025 10-K, accession 0001680247-26-000028). The Permian is the most active US basin, and a pure-play with scale there avoids the dilution of operating across weaker regions. The fleet transition reinforces the edge: the company is moving toward lower-emissions, natural-gas-burning equipment, noting it is "working with our customers and equipment manufacturers to transition our equipment into a lower emissions profile" (accession 0001680247-26-000028), with roughly three-quarters of the fleet now next-generation gas units that benefit from the wide diesel-to-gas price spread.

The supply side is tightening structurally. Management points to equipment attrition and limited spare capacity among smaller competitors, which means the industry is retiring old fleets faster than it adds new ones. In a capital-starved oilfield-services sector, that attrition is the friend of the survivors, because it caps the supply response that usually kills every up-cycle. ProPetro holds a net-cash balance sheet, which lets it fund the planned buyouts of its leased FORCE fleets between late 2026 and 2028 without strain. A Permian completions leader with sold-out premium fleets, a tightening market, and the balance sheet to invest is the bull case, and the first quarter showed early signs of the recovery taking hold.

Bear Case

The qualitative reality is that pressure pumping is one of the toughest businesses in energy, a capital-devouring, commoditized service where pricing power is fleeting, and that is the frame for the bear case. ProPetro is at the bottom of a cycle now, with a first-quarter net loss of $4 million on $271 million of revenue and a trailing operating margin that is slightly negative. Frac equipment wears out fast and requires constant maintenance and capital, so even in good years a large share of cash flow goes back into the fleet just to stand still. The buyouts of the leased FORCE fleets between late 2026 and 2028 are a reminder that the capital demands keep coming. This is not a business that compounds cash; it is one that consumes it.

The earnings disconnect proves the point. The trailing economics are so weak that the standard valuation frames cannot anchor to them, and on a normalized basis the implied multiple is enormous, an artifact of a through-cycle margin currently near zero. No valuation family reaches the price on current economics. The price is therefore entirely a bet on a strong recovery, and pressure pumping recoveries are notoriously short and self-defeating: as soon as pricing improves, idle capacity comes back and competitors reactivate fleets, capping the upside. The sold-out premium fleets are encouraging, but the diesel and older Tier 2 capacity in the industry is a standing reserve that can flood back.

The demand side is entirely outside the company's control. Completion activity depends on operators' capital budgets, which depend on commodity prices, and any weakening in oil and gas would pull activity down quickly. Customer concentration in the Permian means a few large operators drive the order book, and they have the leverage to push pricing. Interest coverage is only about 0.6 times on trailing earnings, so the margin for error is thin until the recovery is firmly in hand. The bear case is not that ProPetro is poorly run; it is that the price requires a durable, sustained up-cycle in one of the most cyclical and competitive corners of the market, and history says those cycles rarely last as long as the price assumes.

Valuation

ProPetro cannot be valued on a normal multiple because trailing earnings are at a cycle trough, and the inversion makes that obvious. Applying the company's through-cycle margin, which is currently a fraction of a percent, produces an implied multiple near 294 times and an implied duration around 32 years, computed at a 12% cost of capital. Those figures are not a meaningful read on the business; they are the mathematical consequence of dividing the price by a near-zero normalized profit. The reliability of the solve is flagged low for exactly this reason, and the reasonable-value band it produces is not usable. The honest takeaway is that the standard valuation machinery breaks down at the bottom of a deep cycle.

What the family pattern does show is that no current-economics frame reaches the price. The asset frame sits below the price, and the relative-multiple frame as well, which tells you the market is paying for a recovery rather than for current assets or earnings. For a pressure-pumping company, the right way to think about value is the mid-cycle earnings power of a fully utilized premium fleet, and that depends on assumptions about utilization, pricing, and how long the up-cycle lasts, none of which the methods can pin down at the trough.

The practical framing is that this is an activity-and-pricing bet on the Permian completions market, backstopped by a net-cash balance sheet. The upside case is real: sold-out premium fleets, structural supply attrition, and a tightening market could drive a sharp earnings recovery that the trough numbers entirely miss. The downside is equally real: a weak commodity environment would keep the company near breakeven and the capital demands of the fleet would keep eating cash. A buyer at this price is underwriting a recovery the methods cannot quantify, and should size the position to the wide range of outcomes rather than to any single fair-value number.

Catalysts

The near-term catalyst is the recovery in completions activity. First-quarter 2026 revenue was $271 million, down 7% from the prior quarter, with a net loss of $4 million and adjusted EBITDA of $36 million, but the forward signal was positive: management expects about 12 active frac fleets in the second quarter, up from 11, with next-generation electric and Tier 4 fleets sold out. The next earnings reports are the checkpoints for whether utilization and pricing keep improving as the Permian market tightens.

The fleet transition and supply dynamics are the structural catalysts. ProPetro is moving its fleet toward lower-emissions natural-gas-burning units, capitalizing on the wide diesel-to-gas price spread, and roughly three-quarters of the fleet is now next-generation. The planned buyouts of the five leased FORCE fleets from late 2026 through 2028 will shift those from lease to owned, changing the cost structure. On the supply side, ongoing equipment attrition and limited spare capacity among smaller competitors are tightening the market, which supports pricing for the operators that remain.

The risks are the commodity cycle and capital intensity. Completion activity tracks operators' capital budgets and commodity prices, so any softening in oil and gas would pull demand down quickly. Pressure pumping is highly competitive, and improved pricing tends to draw idle capacity back into the market, capping recoveries. The capital demands of maintaining and buying out the fleet are continuous, and with interest coverage thin at the trough, the margin for error is small until the recovery is firmly established. A drop in commodity prices or a stalled recovery would weigh on a stock that is priced for the up-cycle to arrive and persist.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive PUMP report on boothcheck