Investment Thesis
ProFrac is in severe financial distress with negative profitability across all measures (-19.0% net margin, -51.4% ROE) and deteriorating operational performance (revenue down 11.4% YoY). The company faces acute liquidity stress (0.81x current ratio, only $22.9M cash) while servicing $832.7M in long-term debt with negative interest coverage (-1.6x), creating existential solvency risk.
ACDC Strengths
- Positive operating cash flow of $189.5M provides near-term runway despite negative earnings
- Free cash flow of $19.6M remains positive, indicating some operational cash generation
- Modest insider activity (4 Form 4 filings) suggests limited major leadership departures
ACDC Risks
- Deeply unprofitable with -$369.0M net income and -11.6% operating margin indicating fundamental business dysfunction
- Critical liquidity crisis: current ratio of 0.81x and quick ratio of 0.56x signal inability to cover short-term obligations
- Unsustainable debt burden with $832.7M long-term debt against $717.5M equity and negative interest coverage ratio of -1.6x
- Revenue contraction of -11.4% YoY combined with widening losses suggests market demand deterioration in oil & gas services
- High financial leverage (1.16x debt/equity) with negative ROE of -51.4% destroying shareholder value
Key Metrics to Watch
- Operating cash flow trend - critical to determine if positive OCF can be sustained
- Quarterly revenue trends and orders - key indicator of demand recovery in oil & gas services
- Debt restructuring or refinancing announcements - essential given negative interest coverage
- Cash balance and burn rate - immediate solvency concern with only $22.9M cash against $1.7B liabilities
- Return to profitability timeline - when/if operating losses can be eliminated
ACDC Financial Metrics
Revenue
$1.9B
Net Income
$-369.0M
EPS (Diluted)
$-2.22
Free Cash Flow
$19.6M
Total Assets
$2.6B
Cash Position
$22.9M
ACDC Profitability Ratios
Gross Margin
N/A
Operating Margin
-11.6%
Net Margin
-19.0%
ROE
-51.4%
ROA
-14.3%
FCF Margin
1.0%
ACDC Balance Sheet & Liquidity
Current Ratio
0.81x
Quick Ratio
0.56x
Debt/Equity
1.16x
Debt/Assets
65.8%
Interest Coverage
-1.63x
Long-term Debt
$832.7M
Disclaimer: This analysis is generated by Claude AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research and consult with a qualified financial advisor before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: Mar 19, 2026 |
Data as of: 2025-12-31 |
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