ProPetro Holding (NYSE:PUMP) reported fourth quarter 2020 GAAP loss of $.44 per share, missing consensus by $.23 per share. Revenues for the quarter were $154 million, increasing by 15% sequentially. Actual fourth quarter 2020 revenues were inline management’s prior guidance.
The increase in revenues during the fourth quarter was attributed to higher well completion activity. For the fourth quarter, the company had an effective utilization of 9.6 fleets, higher when compared to the third quarter of 2020 effective utilization of 8.5 fleets.
Adjusted EBITDA was $24 million, an increase of 41% when compared to the prior quarter.
The company estimated first quarter 2021 effective utilization between 9.5 to 11 fleets. The current guidance is lower than management’s prior forecast of 10.5 to 11.5 fleets.
Despite the recent deep freeze in Texas, the company expects improved well completion activity and pricing throughout the year.
Balance Sheet
At the end of Dec. 31, 2020, the company had total liquidity of $121 million, comprised of $69 million of cash and $52 million available under its revolving credit facility. The company has no debt.
We are maintaining our Buy rating and increasing our price target by $3 to $13 for ProPetro. Our price target is based on a 7.5x EV/EBITDA multiple and a 2021 Adjust EBITDA of $165 million, which is higher than our prior estimate of $122 million. Our estimate includes recovery of both well completion activity and pricing power throughout 2021.