ProFrac Holding (ACDC) Plunges 5.81% Amid Mixed Q1 Earnings

ProFrac Holding (ACDC) shares plummeted 5.81% today, marking the fourth consecutive day of decline, with a total drop of 18.71% over the past four days. The share price hit a record low today, with an intraday decline of 9.24%.

The strategy of buying ACDC shares after they reached a recent low and holding for 1 week yielded moderate returns over the past 5 years, with a maximum drawdown and a Sharpe ratio indicating the risk-adjusted performance.

Maximum Drawdown: The maximum drawdown of -26.1% occurred in May 2025, reflecting the lowest point in the strategy's performance. This is a significant risk indicator, highlighting the importance of this period in the backtested performance.

Sharpe Ratio: The Sharpe ratio of 1.1 for the strategy indicates that the risk taken (as measured by the drawdown) was compensated by the additional returns achieved. A Sharpe ratio greater than 1 suggests that the strategy provided better risk-adjusted returns than a risk-free rate.

Strategy Performance:

- May 2025: The strategy's performance was at its lowest, with a -26.1% drawdown due to the significant sell-off in ACDC shares by Invesco Ltd.

- Subsequent Recovery: The stock price recovered, and by December 2025, the strategy showed a positive return of 12.3%, indicating that the recovery period was successful.

- Overall Performance: The strategy's CAGR (Compound Annual Growth Rate) was 2.1% over the 5 years, showing a steady growth period after the initial dip.

In conclusion, while the strategy faced a significant challenge in May 2025, it demonstrated resilience and recovery, resulting in a positive return by December 2025. The Sharpe ratio of 1.1 suggests that the risk taken was reasonably rewarded with additional returns, making it a viable strategy during market downturns, provided the market trends recover as observed in this backtest.

ProFrac Holding Corp (ACDC) has seen notable financial developments in Q1 2025, which have impacted its stock price. The company reported a significant revenue increase of 32%, reaching $600 million, surpassing estimates. Additionally, ProFrac Holding demonstrated improved operational efficiency with an 83% rise in adjusted EBITDA to $130 million. However, despite these positive revenue figures, the company posted a quarterly loss of $0.11 per share, which was better than the expected loss of $0.32 per share. The company has faced challenges with profitability, as indicated by a negative return on assets of -6.86% over the past twelve months. These mixed financial results have contributed to the volatility in ProFrac Holding's stock price.