| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 36.65 | 49 |
| Intrinsic value (DCF) | 5.95 | -76 |
| Graham-Dodd Method | 17.18 | -30 |
| Graham Formula | n/a |
Liberty Energy Inc. (NYSE: LBRT) is a leading provider of hydraulic fracturing, wireline services, and proppant delivery solutions to North American onshore oil and gas exploration and production companies. Operating primarily in key shale basins such as the Permian, Eagle Ford, and Williston, Liberty Energy leverages advanced pressure pumping technologies, data analytics, and proprietary logistics to enhance well productivity. The company owns and operates two strategically located sand mines in the Permian Basin, ensuring cost-efficient proppant supply. With approximately 30 active frac fleets as of 2021, Liberty Energy serves major E&P clients, emphasizing sustainability through its NextGen electric frac fleet technology. Headquartered in Denver, Colorado, Liberty Energy is well-positioned in the high-growth oilfield services sector, benefiting from resilient U.S. shale demand and operational scale.
Liberty Energy presents a compelling investment case due to its strong market position in North American pressure pumping, diversified service offerings, and vertical integration with in-basin sand mines. The company’s $4.3B revenue (2023) and $316M net income reflect operational efficiency, while a moderate beta (0.71) suggests lower volatility relative to peers. Risks include cyclical exposure to oil prices, capital intensity ($651M in 2023 capex), and debt levels ($534M). However, robust operating cash flow ($829M) and a dividend yield (~1.7%) provide downside cushion. Investors should monitor Permian activity trends and adoption of electric fleets, a potential differentiator.
Liberty Energy’s competitive edge stems from its integrated service model, combining hydraulic fracturing, wireline, and sand logistics under one roof. Its Permian sand mines reduce proppant costs, a critical advantage given sand’s ~15–20% weight in frac costs. The company’s NextGen electric fleets, with lower emissions and fuel costs, position it favorably amid ESG scrutiny. However, Liberty operates in a fragmented market dominated by larger players like Halliburton. While its asset-light approach (30 fleets vs. Halliburton’s ~50) allows agility, scale limitations may hinder pricing power during downturns. Data analytics capabilities and pumpdown perforating services add niche differentiation. Liberty’s regional focus on the Permian (50%+ activity) aligns with industry consolidation but exposes it to basin-specific risks. Competitors with broader international footprints may better withstand North American cyclicality.