ACDC · ProFrac Holding
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $4.49
Note written ·
Price against the kill line
29.8% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $4.49, on record since 11 November 2026. The shares are down 40.3% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $4.49, over the 50-day average of closes, which would show the shares leading the S&P 500. A fourth-quarter 2026 Stimulation Services adjusted EBITDA margin above 9% would also show the case working.
Research onlyNot in the portfolio.
Key figures from the filings · Energy
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 511
- Revenue, change on a year (%)
- +26.8
- Gross margin (%)
- 21.2
- Operating margin (%)
- −6.7
- Free cash flow, four quarters ($M)
- −15.9
- Net cash, cash less debt ($M)
- −861
- Enterprise value to sales (×)
- 0.8
- Free-cash-flow yield (%)
- −2.8
All filed numbers
What ProFrac Holding reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 511 | +26.8 | 21.2 | −6.7 |
| first filed | 498 | −0.8 | 22.1 | −7.6 |
| first filed | 450 | −25.1 | 21.2 | −10.3 |
| first filed | 437 | −4.0 | 22.9 | −24.1 |
| first filed | 403 | −29.9 | 19.6 | −19.5 |
| first filed restated | 502 | −13.4 | 25.3 | −11.6 |
| Pre-tax income ($M) | −71.0 |
| Net income ($M) four quarters: −387 | −80.7 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +6.6 |
| Operating cash flow ($M) | 133 |
| Capital spending ($M) | 149 |
| Free cash flow ($M) | −15.9 |
| Cash and short-term investments ($M) | 43.6 |
| Debt ($M) long-term debt | 905 |
| Net cash, cash less debt ($M) | −861 |
| Deferred revenue ($M) +450.0% on a year | 4.4 |
| Backlog, orders not yet delivered ($M) −80.7% on a year | 2.9 |
| Receivables ($M) | 348 |
| Inventory ($M) | 195 |
| Shareholders' equity ($M) | 505 |
| Market value ($M) | 574 |
| Enterprise value, market value plus net debt ($M) | 1,435 |
| Enterprise value to sales (×) | 0.8 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 1.1 |
| Free-cash-flow yield (%) | −2.8 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.2% of shares outstanding sold short, 5.2 days of average trading to cover, +4.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $2.9M | $0 |
| 12 monthsfrom | $6.9M | $0 |
The thesis
ProFrac's shares are more likely to lag the S&P 500 than lead it over the next three months. The case, that rising hydraulic-fracturing (frac) prices will lift segment margins, failed its first test: the third-quarter Stimulation Services adjusted margin was 9%, the same as the second quarter, against management's guide for improvement. The fourth-quarter 2026 report, expected around March 2027, decides whether pricing is reaching earnings.
ProFrac's 5 November 2026 release shows Stimulation Services revenue of $421 million and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $37 million, against $430 million and $39 million in the second quarter. Consolidated revenue was $511 million against $498 million, and consolidated adjusted EBITDA fell to $65 million from $69 million. The company reported a $74 million net loss.
The shares closed at $3.19 on 12 November 2026, 61.2% below the 52-week intraday high of $8.22 set on 19 May 2026. The three-month price change is −40.6%. The 52-week closing low is $2.71, set on 5 November 2026, the day of the results.
Bullish and bearish views on ProFrac Holding Corp.
The bull case on ProFrac Holding Corp. (ACDC), in brief: management still guides to improvement. The bear case: the margin did not move.
Bull case
- Management still guides to improvement. The 5 November 2026 release expects fourth-quarter Stimulation Services results to improve sequentially on price increases and steady activity, partly offset by year-end seasonality. An Earnings Whispers summary of the call, dated 5 November 2026, reports management saw leading-edge frac pricing recovered roughly 50–60% of the way off the trough, with 2027 bids accelerating.
- Debt service eased. The September amendment cut quarterly term-loan amortization from $15 million to zero through the first quarter of 2028 and extended the maturity to February 2030 (Form 8-K, filed 16 September 2026). Principal debt was about $1.05 billion at 30 September 2026, down from roughly $1.10 billion at 30 June 2026.
- Liquidity rose in the quarter. Liquidity was about $97 million at 30 September 2026, including $79 million of availability under the asset-based loan facility, up from about $72 million at 30 June 2026 (ProFrac releases, 6 August 2026 and 5 November 2026).
- The controlling family bought into the slide. A Form 4 filed 26 August 2026 reported an open-market purchase of 607,227 shares at an average $4.72 on 21 August to 25 August 2026, reported by Dan H. Wilks and THRC Holdings, LP, each a 10% owner. The shares now trade well below that price, and no later insider purchase has been filed.
Bear case
- The margin did not move. Stimulation Services margin stayed at 9% while revenue slipped to $421 million from $430 million. Earnings-call summaries attribute the result to higher materials and labor costs offsetting modest pricing gains, and Earnings Whispers reports management expects logistics, consumables and labor inflation to persist into 2027.
- Proppant weakened. Proppant Production revenue fell to $101 million in the third quarter from $121 million in the second, and its adjusted EBITDA was about $2 million (Earnings Whispers, 5 November 2026, citing the release).
- Consolidated profit fell short of expectations. Earnings Whispers reported on 5 November 2026 that consolidated adjusted EBITDA of $65 million was below a consensus in the mid-to-high $70 million range. The same report says the chief executive now expects positive net income in 2027, a timeline it describes as having drifted.
- Analysts cut targets after the report. On 9 November 2026, Morgan Stanley lowered its price target to $4 from $4.50 with an underweight rating, and Piper Sandler lowered its target to $5 with a neutral rating. The $3.19 close on 12 November 2026 is below both.
- Cash is thin against the debt. Of about $44 million of total cash at 30 September 2026, about $25 million sits at Flotek and is not accessible to ProFrac, leaving about $19 million at the parent (release, 5 November 2026). Principal debt is about $1.05 billion. Panabee reported in September 2026 that a ProFrac subsidiary sold about 2.3 million Flotek shares to affiliate lenders in exchange for the cancellation of $60 million of 2026 term loans.
Price setup
The shares closed at $3.19 on 12 November 2026. That is below the 50-day average of closes at $4.45 and the 200-day average at $5.50, both as of the same close. The 52-week closing low is $2.71 on 5 November 2026.
Closes since the results: $2.71 on 5 November 2026, $3.00 on 6 November 2026, $3.42 on 9 November 2026, $3.53 on 10 November 2026, $3.43 on 11 November 2026 and $3.19 on 12 November 2026. The rebound from the closing low reached $3.53 and then gave back part of the gain over two sessions. Morgan Stanley's $4 target and Piper Sandler's $5 target are both above the last close.
The next test of the operating case is the fourth-quarter report, which falls outside the next 30 days. The third-quarter Form 10-Q was filed on 5 November 2026.
The ticker is also confused with unrelated names in retail chatter, which makes sentiment data for the shares unreliable.
Catalysts ahead
- ~March 2027 (est.): Fourth-quarter 2026 results. Shows whether Stimulation Services adjusted EBITDA margin rose above 9%, which decides the frac-pricing recovery case.
What would change the view
A daily close above $4.49, over the 50-day average of closes, which would show the shares leading the S&P 500. A fourth-quarter 2026 Stimulation Services adjusted EBITDA margin above 9% would also show the case working.
What it trades with
ProFrac's revenue comes from completion activity and frac pricing among US oil and gas producers, so the shares track oil prices, producer capital budgets and other pressure-pumping and oilfield-services names. ProFrac consolidates a majority stake in Flotek Industries (NYSE: FTK), so Flotek revenue and margin flow into ProFrac's reported results. The Wilks family controls the company.
The evidence, claim by claim (8)
- Third-quarter 2026 Stimulation Services revenue was $421 million and adjusted EBITDA was $37 million, a 9% margin, against $430 million, $39 million and 9% in the second quarter. ProFrac third-quarter 2026 results release · as of
- Third-quarter 2026 consolidated revenue was $511 million and adjusted EBITDA was $65 million (13% of revenue), against $498 million and $69 million (14%) in the second quarter; net loss was $74 million. ProFrac third-quarter 2026 results release · as of
- Liquidity was about $97 million at quarter end, including $79 million of asset-based loan availability; principal debt was about $1.05 billion; about $25 million of $44 million total cash is at Flotek. ProFrac third-quarter 2026 results release · as of
- Management expects fourth-quarter 2026 Stimulation Services results to improve sequentially on price increases and steady activity, partly offset by year-end seasonality; 2026 capital spending guidance is $160 million to $180 million including Flotek. ProFrac third-quarter 2026 results release · as of
- Proppant Production revenue fell to $101 million from $121 million in the second quarter, with adjusted EBITDA of about $2 million. Earnings Whispers via Finviz, 5 November 2026 · as of
- Morgan Stanley cut its ProFrac price target to $4 from $4.50 (underweight); Piper Sandler lowered its target to $5 (neutral). Analyst-rating news · as of
- The September amendment cut quarterly term-loan amortization to zero through the first quarter of 2028 and extended maturity to February 2030. ProFrac Form 8-K, filed 16 September 2026 · as of
- Dan H. Wilks and THRC Holdings, LP, each a 10% owner, reported an open-market purchase of 607,227 shares at an average $4.72 on 21 August to 25 August 2026. SEC Form 4, filed 26 August 2026 · as of
Sources
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