JPMorgan Cuts ProFrac's Earnings Forecast On Lower Reinvestment And Industry Attrition

JP Morgan analyst Arun Jayaram reiterated an Underweight rating on ProFrac Holding Corp. ACDC with a price forecast of $7.

On March 6, the company reported fourth-quarter sales of $454.7 million, which missed the consensus of $479.3 million and reported net loss of $105.0 million vs. a loss of $45.2 million a year ago quarter.

The analyst writes that the results showed EBITDA and FCF misses due to seasonality and a weaker macro environment.

Management highlighted an increase in ACDC’s active fleet count, which has reached its highest level since mid-2024, with six additional fleets secured since the fourth-quarter low point, adds the analyst.

Jayaram notes that the company anticipates the lower average pricing to offset modestly higher activity in Stimulation Services year-over-year.

Also, the company expects continued industry-wide equipment attrition due to higher hours pumped per fleet and lower reinvestment levels, adds the analyst.

The analyst estimates 29.3 average fleets in the first quarter of 2025, resulting in Stimulation Services EBITDA (~$10.9 million annualized EBITDA/fleet) of $80 million.

Jayaram anticipates that the company’s profitability will improve as utilization increases across its business units throughout the year, although at a slower pace.

Consequently, the analyst revised the 2025-26 EBITDA forecast to $472 million and $588 million, down from $543 million and $680 million, respectively.

Also, the analyst sees 2025-26 FCF generation of $78 million and $184 million, respectively and capital expenditure of $340 million and $447 million, respectively.

Investors can gain exposure to the stock via Invesco Oil & Gas Services ETF PXJ.

Price Action: ACDC shares are down 1.65% at $7.15 at the last check Monday.

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