SEI · Solaris Energy Infrastructure
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $52.00
Note written ·
Price against the kill line
22.7% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
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 below $52.00, on record since 10 November 2026. The shares are down 3.1% 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 below $52.00, which would erase the rebound that followed the 4 November results and the run of analyst target raises. A fourth-quarter 2026 adjusted EBITDA result below $165 million, or a cut to the $220–260 million first-quarter 2027 range, would also break the case.
Research onlyNot in the portfolio.
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 6 November 2026
- Revenue, latest quarter ($M)
- 341
- Revenue, change on a year (%)
- +104.4
- Operating margin (%)
- 19.6
- Free cash flow, four quarters ($M)
- −1,063
- Net cash, cash less debt ($M)
- −1,316
All filed numbers
What Solaris Energy Infrastructure 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 ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 341 | +104.4 | 19.6 |
| first filed | 219 | +46.9 | 25.8 |
| first filed | 196 | +55.3 | 25.8 |
| first filed | 180 | +86.6 | 22.2 |
| first filed | 167 | +122.4 | 22.7 |
| first filed | 149 | +102.1 | 23.8 |
| Pre-tax income ($M) | 49.1 |
| Net income ($M) four quarters: 74.9 | 34.6 |
| Diluted shares, change on a year (%) | Not reported |
| Operating cash flow ($M) | 574 |
| Capital spending ($M) | 1,637 |
| Free cash flow ($M) | −1,063 |
| Cash and short-term investments ($M) | 400 |
| Debt ($M) long-term debt | 1,716 |
| Net cash, cash less debt ($M) | −1,316 |
| Deferred revenue ($M) | 87.0 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 284 |
| Inventory ($M) | 52.2 |
| Shareholders' equity ($M) | 1,275 |
| Market value ($M) | Not available |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not available |
| Price to book value (×) | Not available |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): the share of shares outstanding is not available, 5.7 days of average trading to cover, +1.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $542K | $0 |
| 12 monthsfrom | $1.3M | $300.6M |
The thesis
Solaris Energy Infrastructure is modestly more likely than not to beat the S&P 500 over the next three months. The company beat its third-quarter guidance, raised its next two quarters and signed its largest power contract. The fourth-quarter report, expected about 24 February 2027, shows whether adjusted earnings land in the new $165–185 million range and whether the megawatts earning revenue rise from the third-quarter level of about 820.
The company reported on 4 November 2026 that third-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $136.1 million, above the $110–130 million range it had guided. Revenue was $341.1 million. The shares closed at $50.55 on 5 November 2026 and at $64.50 on 12 November 2026, after Citi, Piper Sandler, Needham and Northland Securities adjusted their targets between 9 November 2026 and 11 November 2026.
The market has recovered most of the post-report drop but not the summer level. The 12 November 2026 close sits 25.2% below the 52-week intraday high of $86.19 set on 18 June 2026. The three-month price change is 2.1%.
Bullish and bearish views on Solaris Energy Infrastructure, Inc.
The bull case on Solaris Energy Infrastructure, Inc. (SEI), in brief: third quarter beat the guided range. The bear case: revenue-earning capacity fell.
Bull case
- Third quarter beat the guided range. Adjusted EBITDA was $136.1 million against guidance of $110–130 million, per the company's 4 November 2026 results release filed with the SEC. The Power Solutions segment earned $127.0 million, up 32% from the second quarter.
- Guidance was raised again. Fourth-quarter 2026 adjusted EBITDA guidance moved to $165–185 million from $145–180 million. First-quarter 2027 moved to $220–260 million from $200–240 million, per the same release.
- A 900-megawatt contract was signed. On 29 October 2026 the company signed a 15-year power contract for about 900 megawatts with an existing investment-grade customer. Deployments start in the first half of 2027, per the company's release.
- Contracted capacity is large. Long-term contracted capacity is 3.2 gigawatts, per the 4 November 2026 release.
- Analysts raised targets after the report. Needham maintained Buy and raised its target to $126 from $104 on 11 November 2026. Citi maintained Buy and raised its target to $104 on 9 November 2026. Piper Sandler maintained Overweight and raised its target to $85 on 9 November 2026, per Benzinga headlines.
- A director bought shares in the open market. Director A. J. Teague bought 670 shares at an average $60.77 between 9 November 2026 and 11 November 2026, per an SEC Form 4 filed 12 November 2026. He also bought 7,800 shares at an average $64.23 on 8 September 2026.
Bear case
- Revenue-earning capacity fell. Average capacity earning revenue was about 820 megawatts in the third quarter, down 14% from about 950 megawatts in the second, as temporary third-party generation was released, per the 4 November 2026 release.
- Capital spending and debt are heavy. Third-quarter capital expenditure was $547.2 million. Debt attributable to the company was $2.40 billion against $493.2 million of cash, per the same release. The $850 million revolver was undrawn.
- Targets are far apart. Wells Fargo maintained Overweight but lowered its target to $65 on 6 November 2026, per Benzinga, against Needham's $126 on 11 November 2026. The 12 November 2026 close of $64.50 is near the low end of that range.
- The shares did not hold the report-day reaction. The close fell to $50.55 on 5 November 2026, the session after a quarter that beat guidance. The recovery to $64.50 by 12 November 2026 came in six sessions, so the price has moved sharply in both directions.
- Two businesses are mixed in the totals. The oilfield logistics segment produced $56.9 million of third-quarter revenue, so reported totals combine data-center power with oilfield activity.
Price setup
The last close is $64.50 (12 November 2026). It is above the 200-day average of $63.62 and below the 50-day average of $66.73, both from adjusted daily closes. The close of $63.30 on 14 August 2026 is the three-month reference point.
The shares closed at $61.87 on 10 November 2026 and $64.80 on 11 November 2026. The 52-week closing low is $40.64, set on 17 December 2025. The 52-week intraday high is $86.19 from 18 June 2026.
The Form 10-Q for the third quarter was filed with the SEC on 6 November 2026. The only insider purchases among recent Form 4 filings are Teague's on 8 September 2026 and 9 November to 11 November 2026. The other filings since mid-August are routine director share awards dated 23 August 2026.
Catalysts ahead
- ~24 February 2027 (est.): Fourth-quarter and full-year 2026 results, based on the 24 February 2026 date of the prior-year report. Tests whether adjusted EBITDA lands in the $165–185 million guided range and whether average revenue-earning megawatts rise from about 820.
What would change the view
A daily close below $52.00, which would erase the rebound that followed the 4 November results and the run of analyst target raises. A fourth-quarter 2026 adjusted EBITDA result below $165 million, or a cut to the $220–260 million first-quarter 2027 range, would also break the case.
The risks this note tracks, each with what would confirm it:
- Fourth-quarter earnings fall short of the raised $165–185 million range as temporary capacity is released and new capacity is delayed. Confirmed by: fourth-quarter 2026 adjusted EBITDA below $165 million, or average revenue-earning megawatts staying near or below 820.
- Heavy debt-funded capital spending raises fixed costs before new capacity earns revenue. Confirmed by: rising interest expense in quarterly filings without matching growth in Power Solutions revenue.
- Further equity issuance dilutes shareholders while expansion continues. Confirmed by: a new share offering or stock-funded acquisition announced before the fourth-quarter report.
- AI data-center power stocks and long-term yields pull the shares down regardless of company results. Confirmed by: renewed declines in other AI data-center power stocks alongside rising long-term Treasury yields.
What it trades with
The Power Solutions business serves technology-company customers building data centers, so the shares are exposed to hyperscaler capital spending news and to long-term interest rates, which raise the cost of the company's debt-funded expansion. The oilfield logistics segment adds a smaller link to oilfield activity.
Solaris has Class A and Class B shares, which affects share counts and earnings per share.
The evidence, claim by claim (7)
- Third-quarter 2026 revenue $341.1 million; total adjusted EBITDA $136.1 million versus the $110–130 million guided range; Power Solutions adjusted EBITDA $127.0 million, up 32% from the second quarter. Company Q3 2026 results release, Form 8-K exhibit 99.1 · as of
- Fourth-quarter 2026 adjusted EBITDA guidance raised to $165–185 million from $145–180 million; first-quarter 2027 range raised to $220–260 million from $200–240 million. Company Q3 2026 results release, Form 8-K exhibit 99.1 · as of
- Signed a 15-year power contract for about 900 megawatts with an existing investment-grade customer; deployments begin in the first half of 2027. Company Q3 2026 results release, Form 8-K exhibit 99.1 · as of
- Average capacity earning revenue about 820 megawatts in the third quarter, down 14% from about 950 megawatts in the second quarter; long-term contracted capacity 3.2 gigawatts. Company Q3 2026 results release, Form 8-K exhibit 99.1 · as of
- Third-quarter capital expenditure $547.2 million; debt attributable to Solaris $2.40 billion; cash attributable to Solaris $493.2 million; $850 million revolver undrawn. Company Q3 2026 results release, Form 8-K exhibit 99.1 · as of
- Needham raised its Solaris price target to $126 from $104 (Buy); Citi raised its target to $104 (Buy); Piper Sandler raised its target to $85 (Overweight). Benzinga headlines, 9 November to 11 November 2026 · as of
- Director A. J. Teague bought 670 shares at an average $60.77 on 9 November to 11 November 2026. SEC Form 4 filed 12 November 2026 · as of
Sources
Related · shared themes
PSIX
Power Solutions International
Power Solutions International's record third-quarter profit, raised second-half outlook and new multi-year engine supply deal support the…
CAT
Caterpillar
Caterpillar's shares look more likely to lag the S&P 500, as political risk to data-center building and margins near the bottom of target…
AGX
Argan
Argan's order book shrank to $2.518 billion in its latest quarter, so the shares are more likely to lag the S&P 500 over three months; the…
IESC
IES Holdings
IES Holdings' data-center electrical backlog is real, but the shares closed at $177.32 on 11 November 2026, 56.6% below the 52-week high…