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Investing.com - Barclays downgraded ProPetro Holding (NYSE:PUMP) from Overweight to Equalweight on Monday, while reducing its price target to $5.00 from $6.00. The stock, which has declined nearly 9% in the past week and is trading at an EV/EBITDA multiple of 2.6x, appears undervalued according to InvestingPro analysis.
The downgrade comes as Barclays lowered its EBITDA estimates for ProPetro to $181 million for 2025 and $157 million for 2026, down from previous forecasts of $183 million and $196 million respectively. The company’s current EBITDA stands at $232 million for the last twelve months, with InvestingPro data showing moderate debt levels and liquid assets exceeding short-term obligations. Get access to 5+ additional ProTips and comprehensive analysis in the Pro Research Report.
The new $5.00 price target is based on a distributed power business valuation of $99 million, combined with a 4.0x multiple on the firm’s 2026 ex-power EBITDA of $171 million and 4.0x multiple on 2026 corporate expenses of $51 million using current net debt.
This valuation approach differs from the previous methodology, which had applied mid-cycle profitability of $19.5 million EBITDA per fleet and a mid-cycle multiple of 2.9x EBITDA for ProPetro’s completions business, while using a 5.5x multiple on 2026 EBITDA for its ProPWR business.
The rating change reflects Barclays’ revised outlook for ProPetro’s earnings potential over the next two years, particularly noting the significant reduction in 2026 EBITDA expectations.
In other recent news, ProPetro Holding Corp reported disappointing financial results for the second quarter of 2025. The company announced a net loss, with a loss per share of $0.07, which fell short of analysts’ expectations for a gain of $0.03. Revenue also did not meet forecasts, coming in at $326 million compared to the anticipated $330.51 million. These results have drawn attention from investors and analysts alike. The financial shortfall has prompted discussions about the company’s performance and future strategies. Analysts from various firms are likely to reassess their positions on ProPetro in light of these developments. The missed earnings and revenue targets underscore challenges that the company may need to address moving forward.
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