ProFrac Holding (NASDAQ:ACDC) Sees Significant Growth in ROCE, Exceeding Industry Average

ProFrac Holding has a ROCE of 0.5%, lower than the Energy Services industry average of 10%. However, the company's ROCE has improved significantly, with the company generating pre-tax profits after previously generating losses five years ago. The company has also utilized 338% more capital than it was five years ago, indicating profitable reinvestment opportunities and potential for future growth.

ProFrac Holding Corp. (ACDC), a key player in the Energy Services industry, is set to release its second-quarter 2025 earnings results on August 7, 2025. Analysts anticipate a loss of $0.24 per share and revenue of $532.93 million, according to a recent report [2]. This outlook underscores the company's ongoing challenges, particularly in the face of a significant year-over-year decline in earnings.

Despite the expected loss, it is crucial to consider the company's recent financial performance. ProFrac has shown improvement in its return on capital employed (ROCE), which has increased to 0.5%, although it remains below the industry average of 10% [1]. This improvement indicates a positive trend, as the company has transitioned from generating losses to pre-tax profits over the past five years. Furthermore, ProFrac has utilized 338% more capital than it did five years ago, suggesting potential for future growth and profitability [1].

The upcoming earnings report will provide further insight into the company's financial health. Analysts have revised their estimates, reflecting a more bearish outlook on the company's earnings prospects. The consensus EPS estimate has been revised 35.59% lower over the last 30 days [1]. This indicates a collective reassessment of the company's financial performance, with analysts collectively downgrading their initial estimates.

The stock price of ACDC has been subject to various analyst ratings, with a new average price target of $6.50 after recent downgrades from firms including Bank of America and Morgan Stanley [2]. The stock has a market capitalization of $1.21 billion, a price-to-earnings ratio of -5.08, and a beta of 1.69. The company's 50-day moving average is $8.12 and its 200-day moving average is $7.16.

Investors should also pay attention to insider activity. Major shareholder Holdings Lp Thrc acquired 207,163 shares of the stock in a transaction on May 16, 2025, while Chairman Matthew Wilks purchased 69,176 shares on May 12, 2025. This indicates a positive sentiment among insiders, who have collectively acquired 733,996 shares valued at $4,356,960 over the last three months [2].

In conclusion, while ProFrac Holding Corp. faces significant challenges in the near term, its improving ROCE and increasing capital utilization suggest potential for future growth. The upcoming earnings report will provide further clarity on the company's financial health and stock performance. Investors should closely monitor the release and consider the broader market conditions and analyst sentiment when making investment decisions.

References:
[1] https://www.nasdaq.com/articles/analysts-estimate-profrac-holding-corp-acdc-report-decline-earnings-what-look-out
[2] https://www.marketbeat.com/instant-alerts/profrac-acdc-to-release-earnings-on-thursday-2025-07-31/