Value
5.4/10data confidence 50%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 5.0 |
| Analyst target | 4.0 |
ACDC · Why this verdict
Why ProFrac Holding (ACDC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score3.2/10
ConfidenceHIGH
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has missed earnings expectations in each of the past four quarters, with an average shortfall of roughly 25% below consensus — a streak that signals the business is performing materially worse than analysts anticipate. Earnings | For this pillar to resolve, EPS must come in above consensus for at least 2 consecutive quarters, ending the miss streak. | →Stable |
| CounterWhen expectations are consistently reset lower after every miss, the bar eventually drops to a level the business can clear; a sufficiently reduced consensus could produce a technical beat without any fundamental improvement. | ||
Revenue has contracted approximately 25% year-over-year, reflecting a sustained demand deterioration that undermines the recovery case and points to headwinds that may be more than cyclical. Growth breakdown | If the decline is bottoming, sequential quarterly revenue would need to stabilize and turn positive for at least 2 consecutive quarters. | →Stable |
| CounterOil and gas equipment and services revenue is acutely cyclical; if drilling activity picks up from current levels, a recovery in volumes could narrow the year-over-year revenue gap more quickly than the trend suggests. | ||
Business quality registers near the floor of the scoring range, reflecting near-zero returns on equity and assets, weak gross margins, and a Piotroski F-Score of 2 out of 9 — a combination that typically indicates deteriorating financial health. Quality breakdown | Quality would need to recover to at least the mid-range before the fundamental investment case could be revisited, which requires at minimum a Piotroski score above 5 and positive returns on assets. | →Stable |
| CounterAt a low absolute valuation relative to sales, even a modest cost restructuring or volume recovery could produce an outsized improvement in operating metrics and return figures, making the depressed quality read a potential mean-reversion opportunity. | ||
The company has no identifiable competitive moat, leaving pricing power, margins, and market share vulnerable to competitor pressure during a down-cycle in oil and gas equipment demand. Quality breakdown | Evidence of pricing recovery would be visible through operating income turning positive for 2 consecutive quarters, suggesting the business can defend its position without structural competitive advantages. | →Stable |
| CounterCommodity service businesses without moats can still generate adequate returns when industry capacity is tight; a reduction in competing supply could partially substitute for structural competitive advantage during a demand recovery. | ||
The company has missed earnings expectations in each of the past four quarters, with an average shortfall of roughly 25% below consensus — a streak that signals the business is performing materially worse than analysts anticipate.
→StableEarnings
- Expectation
- For this pillar to resolve, EPS must come in above consensus for at least 2 consecutive quarters, ending the miss streak.
CounterWhen expectations are consistently reset lower after every miss, the bar eventually drops to a level the business can clear; a sufficiently reduced consensus could produce a technical beat without any fundamental improvement.
Revenue has contracted approximately 25% year-over-year, reflecting a sustained demand deterioration that undermines the recovery case and points to headwinds that may be more than cyclical.
→StableGrowth breakdown
- Expectation
- If the decline is bottoming, sequential quarterly revenue would need to stabilize and turn positive for at least 2 consecutive quarters.
CounterOil and gas equipment and services revenue is acutely cyclical; if drilling activity picks up from current levels, a recovery in volumes could narrow the year-over-year revenue gap more quickly than the trend suggests.
Business quality registers near the floor of the scoring range, reflecting near-zero returns on equity and assets, weak gross margins, and a Piotroski F-Score of 2 out of 9 — a combination that typically indicates deteriorating financial health.
→StableQuality breakdown
- Expectation
- Quality would need to recover to at least the mid-range before the fundamental investment case could be revisited, which requires at minimum a Piotroski score above 5 and positive returns on assets.
CounterAt a low absolute valuation relative to sales, even a modest cost restructuring or volume recovery could produce an outsized improvement in operating metrics and return figures, making the depressed quality read a potential mean-reversion opportunity.
The company has no identifiable competitive moat, leaving pricing power, margins, and market share vulnerable to competitor pressure during a down-cycle in oil and gas equipment demand.
→StableQuality breakdown
- Expectation
- Evidence of pricing recovery would be visible through operating income turning positive for 2 consecutive quarters, suggesting the business can defend its position without structural competitive advantages.
CounterCommodity service businesses without moats can still generate adequate returns when industry capacity is tight; a reduction in competing supply could partially substitute for structural competitive advantage during a demand recovery.
TrendMatrix Research · core thesis
Engine thesis — one sentence
With revenue declining approximately 25%, four consecutive earnings misses averaging a 25% shortfall below expectations, and business quality at minimum threshold levels, the risk profile substantially outweighs any potential recovery case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
1.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.5 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 3.3 |
| Moat | 2.5 |
| Piotroski F | 2.2 |
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 2/9
- ▸Quality concerns
Growth
0.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
- ▸Declining revenue: -25%
Momentum
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 1.1 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 2.9 |
- ▸Capitulation risk (RSI 14, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+6.5%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 5.0 |
| Price target | 5.6 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.7 |
| quality rank | 0.1 |
| growth rank | 0.3 |
Technical
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.9 |
| support resistance | 9.9 |
| 52w position | 0.0 |
| gap | 6.0 |
Risk (lower is worse)
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 8.3 |
| volatility | 0.0 |
| put call | 5.0 |
| implied vol | 0.0 |
| beta | 5.3 |
| debt equity | 3.9 |
- ▸High IV: 96%
- ▸Concentration risks: 3 MED (10-K Item 1A)
Catalyst
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 5.0 |
- ▸Earnings concerns: 0B/4M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (4)
- INSIDER:OK
- EARNINGS_PROXIMITY:35d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.0<4.5
- ASYMMETRY:-0.6=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.64
Upside
-9.7%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -56% (>40% off 52w high)
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Technical at 6.5 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.0<4.5.
The strongest dimensions are Technical at 6.5, Sentiment at 5.5, and Value at 5.4; the weakest are Growth at 0.0, Quality at 1.1, and Momentum at 2.0. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.64 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Persistent Earnings Misses
Trip ifEPS surprise exceeds 0% for 2 consecutive reported quarters.
- P2Revenue In Sharp Decline
Trip ifRevenue grows more than 5% year-over-year for 2 consecutive quarters.
- P3Quality Below Minimum Threshold
Trip ifPiotroski F-Score rises above 5 and return on assets turns positive for 2 consecutive quarters.
- P4No Competitive Moat
Trip ifOperating income rises above $0 and sustains for 2 consecutive quarters.