LBRT Stock Risk & Deep Value Analysis
Liberty Energy Inc
Energy • Oil & Gas Equipment & Services
DVR Score
out of 10
What You Need to Know About LBRT Stock
We analyzed Liberty Energy Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran LBRT through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Aggressive. Here's what we found.
LBRT Risk Analysis & Red Flags
What Could Go Wrong
Liberty Energy's significant increase in debt via convertible notes, coupled with a drastic decline in operating cash flow ($8.4M in Q1 2026 vs $192.1M Q1 2025) and negative free cash flow, poses substantial financial risk. If the $1.3B capital from the notes isn't effectively deployed to generate significantly improved returns or market conditions continue to worsen, the company could face an increasing leverage burden and potential future dilution for minimal equity value creation.
Risk Matrix
Overall
Aggressive
Financial
High
Market
High
Competitive
Medium
Execution
Medium
Regulatory
Low
Red Flags
- ⚠
Negative free cash flow in Q1 2026 (OCF $8.4M - Capex $157.0M = -$148.6M)
- ⚠
Significant decline in Adjusted EBITDA (-25% YoY) and Operating Cash Flow (-96% YoY) in Q1 2026
- ⚠
Total debt increased by approximately 5x (from ~$246.6M to $1.28B) due to convertible notes
- ⚠
Softening U.S. completions market with reported pricing pressure
Upcoming Risk Events
- 📅
Continued decline in Adjusted EBITDA and Operating Cash Flow in Q2 2026
- 📅
Persistent pricing pressure in the U.S. completions market
- 📅
Worsening commodity price environment for oil and gas
When to Reconsider
- 🚪
Exit if quarterly Operating Cash Flow remains negative or deteriorates further
- 🚪
Sell if Adjusted EBITDA declines for two consecutive quarters, indicating sustained margin compression
- 🚪
Exit if frac services pricing continues to erode, impacting revenue and profitability
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What Does Liberty Energy Inc (LBRT) Do?
Market Cap
$5.52B
Sector
Energy
Industry
Oil & Gas Equipment & Services
Employees
5,700
Liberty Energy Inc. provides hydraulic fracturing services and related technologies to onshore oil and natural gas exploration, and production companies in North America. The company offers wireline services, proppant delivery solutions, field gas processing and treating, compressed natural gas (CNG) delivery, data analytics, related goods comprising sand mine operations, and technologies; and well site fueling and logistics. As of as of December 31, 2024, the company owned and operated a fleet of approximately 40 active hydraulic fracturing; and two sand mines in the Permian Basin. In addition, the company provides services primarily in the Permian Basin, the Williston Basin, the Eagle Ford Shale, the Haynesville Shale, the Eagle Ford Shale, the Denver-Julesburg Basin, the Western Canadian Sedimentary Basin, the Powder River Basin the Appalachian Basin (Marcellus Shale and Utica Shale), the Anadarko Basin, the Uinta Basin, the San Juan Basin, and the Beetaloo Basin. Liberty Energy Inc. was formerly known as Liberty Oilfield Services Inc. and changed its name to Liberty Energy Inc. in April 2022. The company was founded in 2011 and is headquartered in Denver, Colorado.
Visit Liberty Energy Inc WebsiteInvestment Thesis
Liberty Energy is a top-tier provider in the North American frac services market, known for its operational efficiency. While recent financial performance shows a mix of revenue beats and profitability declines, the company has secured substantial capital via convertible notes to navigate current market conditions. The investment thesis is predicated on its ability to leverage this capital to maintain market leadership, potentially consolidate assets, and benefit from any cyclical upturn in E&P activity, rather than disruptive 10x growth.
Is LBRT Stock Undervalued?
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LBRT Price Targets & Strategy
12-Month Target
$34.50
Bull Case
$38.00
Bear Case
$28.00
Valuation Basis
Based on a moderate premium to the current average analyst price target, reflecting recent earnings beat and market momentum, while acknowledging industry headwinds and limited long-term growth. Not indicative of 10x potential.
Entry Strategy
Consider small tactical entries on dips towards $30-$31 (potential near-term support) for short-term cyclical plays, but not recommended for long-term growth investors.
Exit Strategy
Take profit above $36, consider exiting if the stock breaks below $28 (support) or if Q2 2026 Adjusted EBITDA shows further significant declines.
Portfolio Allocation
0-1% for aggressive risk tolerance, only as a short-term cyclical trade due to limited 10x growth prospects.
Price Targets & Strategy
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Is LBRT Financially Healthy?
Valuation
P/E Ratio
36.72
Forward P/E
107.30
Price/Book
1.48
Price/Sales
0.78
Profitability
Gross Margin
19.74%
Operating Margin
1.90%
Net Margin
3.71%
Return on Equity
7.39%
Revenue Growth
-4.02%
EPS
$0.91
Balance Sheet
Current Ratio
1.22
Quick Ratio
0.88
Debt/Equity
0.27
Total Debt
$1.30B
Cash & Equivalents
$699.00M
Cash Flow
EBITDA
$597.34M
Other
Beta (Volatility)
0.60
Dividend Yield
1.06%
Does LBRT Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Stable
Moat Sources
2 Identified
Liberty Energy's moat stems from its operational scale and efficiency in a capital-intensive and specialized industry, creating a barrier to entry for new competitors. However, this moat is inherently vulnerable to the highly cyclical nature of commodity prices, the variable spending of E&P clients, and competitive pricing pressures during downturns, limiting its long-term durability in generating outsized returns.
Moat Erosion Risks
- •Prolonged downturn in North American E&P spending and activity
- •Intensified pricing competition from larger, diversified oilfield service providers
- •Rapid technological shifts that could render existing assets less competitive
LBRT Competitive Moat Analysis
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LBRT Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (General sentiment for O&G services often tied to commodity prices, no specific viral trends detected.)
Institutional Sentiment
Positive (Bank of America upgrade to Buy on April 25, 2026; stock hit 52-week high post-Q1 earnings.)
Insider Activity (Form 4)
Director bought 9,696 shares (value not specified). Insider sold 25,000 shares (value not specified).
Options Flow
Normal options activity (No specific unusual options activity reported in real-time intelligence.)
Earnings Intelligence
Next Earnings
Estimated early-July 2026 (for Q2 2026)
Surprise Probability
Medium (Q1 beat estimates, but underlying profitability trends are concerning, making Q2 less predictable)
Historical Earnings Pattern
Stock rallied post-Q1 2026 earnings, hitting a 52-week high, suggesting positive market reaction to beats or favorable guidance, despite underlying financial challenges.
Key Metrics to Watch
Competitive Position
Top Competitor
PROPETRO HOLDING CORP (PUMP)
Market Share Trend
Stable (No material market share shifts reported in the provided research, strong in its niche but operating in a softening market.)
Valuation vs Peers
Trading at a trailing P/E of 37.18, which is likely in line or at a slight premium to some direct frac service peers given its recent performance, but does not suggest significant undervaluation for 10x growth.
Competitive Advantages
- •Operational efficiency and scale in North American hydraulic fracturing services
- •Integrated service offerings (frac, wireline, perforating)
- •Strong safety record and customer relationships within its niche
Market Intelligence
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What Could Drive LBRT Stock Higher?
Near-Term (0-6 months)
- •Q2 2026 Earnings Report (~July 2026)
- •Potential stabilization of frac services pricing in North America
Medium-Term (6-18 months)
- •Effective deployment of capital from $1.3B convertible notes for efficiency gains
- •Modest scaling of 'power solutions' offerings
Long-Term (18+ months)
- •Sustained, significant rebound in North American E&P spending (highly cyclical)
- •Industry consolidation leading to enhanced market power (unlikely for 10x potential)
Catalysts & Growth Drivers
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What's the Bull Case for LBRT?
- ✓
Acceleration in Adjusted EBITDA and Operating Cash Flow growth
- ✓
Clear strategic roadmap for capital deployment from convertible notes with positive ROI
- ✓
Evidence of sustained recovery in frac services demand and pricing
Bull Case Analysis
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Competing with LBRT
See how Liberty Energy Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Liberty Energy Inc LBRT | $5.5B | 0.1 | 36.7 | $3.9B | 3.7% | -4.0% | |
Chevron Corp CVX | $317.8B | 0.1 | 20.3 | — | — | — | Compare → |
EOG Resources Inc EOG | — | 1.2 | — | — | — | — | Compare → |
Slb NV SLB | $79.4B | 0.9 | 23.5 | $40.0B | 9.4% | -1.6% | Compare → |
Exxon Mobil Corp XOM | $644.6B | 2.0 | 22.3 | $85.1B | 8.9% | -4.5% | Compare → |
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How Liberty Energy Inc Makes Money
Liberty Energy Inc. makes money by providing hydraulic fracturing and other completion services to exploration and production (E&P) companies, primarily in the U.S. and Canada. When an oil or gas well is drilled, Liberty Energy's specialized equipment and crews help 'frac' the well by injecting high-pressure fluids to create fissures in rock formations, allowing hydrocarbons to flow more easily. They also offer complementary services like wireline, perforating, and engineering. Their revenue is generated by charging for these critical services, equipment usage, and associated materials to maximize the output of energy wells.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Liberty Energy Inc (LBRT)?
As of May 1, 2026, Liberty Energy Inc has a DVR Score of 0.1 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Liberty Energy Inc?
Liberty Energy Inc's market capitalization is approximately $5.5B. The company operates in the Energy sector within the Oil & Gas Equipment & Services industry.
What ticker symbol does Liberty Energy Inc use?
LBRT is the ticker symbol for Liberty Energy Inc. The company trades on the NYQ.
What is the risk level for LBRT stock?
Our analysis rates Liberty Energy Inc's overall risk as Aggressive. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of LBRT?
Liberty Energy Inc currently has a price-to-earnings (P/E) ratio of 36.7. This is above the market average, suggesting the stock may be priced for high growth expectations.
Does Liberty Energy Inc pay a dividend?
Yes, Liberty Energy Inc pays a dividend with a current yield of approximately 1.06%.
Is Liberty Energy Inc's revenue growing?
Liberty Energy Inc has reported revenue growth of -4.0%. Revenue has been declining, which warrants closer examination.
Is LBRT stock profitable?
Liberty Energy Inc has a profit margin of 3.7%. The company is profitable but margins are modest.
How often is the LBRT DVR analysis updated?
Our AI-powered analysis of Liberty Energy Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on May 1, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for LBRT (Liberty Energy Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.