Is ProPetro Holding (PUMP) Pricing Reflect Recent Share Price Weakness Accurately

• If you are wondering whether ProPetro Holding's current share price lines up with its underlying worth, this article walks through the key numbers that matter.
• The stock last closed at US$9.31, with returns of a 2.1% decline over 7 days, a 13.8% decline over 30 days, a 5.2% decline year to date, a 7.1% decline over 1 year and a 10.7% decline over 3 years, while the 5 year return stands at 17.4%.
• Recent share price moves come against the backdrop of ongoing developments in the energy services space and investor attention on contract quality, capital discipline and balance sheet strength. These themes help frame how you might judge whether ProPetro is being priced cautiously or generously right now.
• Based on Simply Wall St's valuation checks, ProPetro scores a 4 out of 6, which suggests the stock screens as undervalued on several measures. Next we will look at how traditional valuation tools stack up against a more holistic way of thinking about value that we will return to at the end.

Find out why ProPetro Holding's -7.1% return over the last year is lagging behind its peers.

Approach 1: ProPetro Holding Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business could be worth today by projecting its future cash flows and then discounting those back to a present value.

For ProPetro Holding, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow stands at a loss of $19.96 million. Analysts provide explicit forecasts out to 2028, with free cash flow projected at $70 million in that year. Beyond that, Simply Wall St extrapolates further out to 2035, with annual projections ranging from a loss of $113.45 million in 2026 to positive free cash flows in later years.

After discounting this stream of projected cash flows in dollars, the DCF model arrives at an estimated intrinsic value of about $131.49 per share. Compared with the recent share price of $9.31, the model output implies the shares trade at a 92.9% discount to this estimate. This points to the stock being heavily undervalued on this specific methodology.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests ProPetro Holding is undervalued by 92.9%. Track this in your watchlist or portfolio, or discover 883 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for ProPetro Holding.

Approach 2: ProPetro Holding Price vs Sales

For many profitable companies, price-based multiples are a simple way to gauge what you are paying for each dollar of the business. In ProPetro Holding's case, the preferred metric is the Price to Sales, or P/S, ratio, which compares the market value of the company with its revenue.

What counts as a "normal" or "fair" P/S often reflects how quickly revenue is expected to grow and how risky those cash flows appear. Higher growth and lower perceived risk usually support a higher multiple, while slower growth or higher risk tend to point to a lower one.

ProPetro currently trades on a P/S of 0.75x, compared with the Energy Services industry average of 1.15x and a peer average of 1.11x. Simply Wall St also calculates a proprietary Fair Ratio of 0.63x for ProPetro, which indicates the P/S level that might be appropriate given factors such as its growth profile, margins, industry, market cap and company specific risks.

This Fair Ratio can be more informative than simple peer or industry comparisons because it adjusts for company level characteristics rather than assuming one size fits all. Since ProPetro's actual P/S of 0.75x is above the Fair Ratio of 0.63x, the shares screen as somewhat expensive on this metric.

Result: OVERVALUED

P/S ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1446 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your ProPetro Holding Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St's Community page you can use Narratives, where you describe your story for ProPetro Holding, link it to your own forecasts for revenue, earnings and margins, and get a Fair Value that you can compare with the current share price to decide if it looks attractive or not. That Fair Value updates automatically as new earnings or news arrives, and different investors can express very different views. For example, one Narrative suggests ProPetro is worth around $13.11 a share, while another anchors closer to the low analyst target of $5.00. This shows how the same company can support very different yet clearly framed decisions.

Do you think there's more to the story for ProPetro Holding? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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