Breaking Down Liberty Energy Inc. (LBRT) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments? Evaluating a company's financial health is crucial for making informed decisions. Let's dive into Liberty Energy Inc. (LBRT) and dissect its financial performance. Did you know that in 2024, Liberty Energy reported revenue of $4.3 billion and a net income of $316 million? But how does this compare to previous years, and what are the key metrics that investors should be aware of? Keep reading to explore the critical insights into Liberty Energy's financial standing and what it means for potential investors like you.

Liberty Energy Inc. (LBRT) Revenue Analysis

Understanding Liberty Energy Inc.'s (LBRT) revenue streams involves examining its primary revenue sources, year-over-year growth, contributions from different business segments, and significant changes in these streams.

For the year ended December 31, 2024, Liberty Energy (NYSE: LBRT) reported revenue of $4.3 billion. This represents a 9% decrease compared to the $4.7 billion in revenue for the year ended December 31, 2023.

Key financial highlights for 2024 include:

• Revenue: $4.3 billion
• Net Income: $316 million, or $1.87 fully diluted earnings per share (EPS)
• Adjusted EBITDA: $922 million

A look at Liberty Energy Inc.'s revenue streams shows the following:

• In Q1 2025, revenue reached $977 million, marking a 4% sequential increase from Q4 2024.
• However, this is still less than the $1.1 billion reported for Q1 2024.
• Full-year 2024 revenue was $4.3 billion, a 9% decrease from the $4.7 billion in 2023.
• Q4 2024 revenue stood at $944 million, a 12% decrease from the $1.1 billion recorded in Q4 2023.

Here is a summary of Liberty Energy Inc.'s financial performance:

For more insights into Liberty Energy Inc.'s mission, vision, and core values, visit: Mission Statement, Vision, & Core Values of Liberty Energy Inc. (LBRT).

Liberty Energy Inc. (LBRT) Profitability Metrics

Understanding Liberty Energy Inc.'s profitability involves analyzing several key metrics that provide insights into the company's financial health and operational efficiency. A comprehensive look at gross profit, operating profit, and net profit margins, alongside trends and comparisons with industry averages, can help investors assess the company's ability to generate profits.

For the fiscal year 2024, Liberty Energy (NYSE: LBRT) reported:

• Revenue of $4.3 billion, a 9% decrease year-over-year compared to $4.7 billion in 2023.
• Net income of $316 million, or $1.87 fully diluted earnings per share (EPS). This is lower than the $556 million net income reported in 2023.
• Adjusted EBITDA of $922 million, which is a 24% decrease from the $1.2 billion recorded in 2023.

Despite a challenging environment, Liberty Energy achieved a 17% Adjusted Pre-Tax Return on Capital Employed (ROCE) and a 21% Cash Return on Invested Capital (CROCI) for the year ended December 31, 2024. The company also distributed $175 million to shareholders through share repurchases and dividends.

Here's a summary of Liberty Energy's profitability metrics for the fiscal year 2023 for comparison: Mission Statement, Vision, & Core Values of Liberty Energy Inc. (LBRT).

• Gross Profit Margin: 22.4%
• Operating Profit Margin: 12.6%
• Net Profit Margin: 8.3%

A comparative profitability analysis reveals Liberty Energy's performance relative to industry standards:

• Gross Margin Outperformance: 1.9 percentage points above the industry average.
• Operating Cost Efficiency: 0.7 percentage points better than sector peers.
• Net Profit Margin Advantage: 0.5 percentage points higher than the industry median.

However, recent data indicates some challenges. For Q1 2025, Liberty Energy reported a net income of $20 million, down from $52 million in Q4 2024. Despite this, revenue increased by 4% sequentially, reaching $977 million. The last twelve months' performance shows a gross profit margin of 24.65% and a return on equity of 13%.

To provide a clearer picture, here's a table summarizing key valuation measures and financial statistics:

In summary, while Liberty Energy experienced a decrease in revenue and net income in 2024 compared to the previous year, the company maintains strong profitability metrics and continues to focus on operational efficiencies and shareholder value.

Liberty Energy Inc. (LBRT) Debt vs. Equity Structure

Understanding how Liberty Energy Inc. (LBRT) finances its operations and growth is crucial for investors. This involves examining the company's debt levels, debt-to-equity ratio, and any recent financing activities.

As of December 31, 2024, Liberty Energy Inc. reported the following debt figures:

• Total long-term debt: $236.7 million
• Short-term debt: $7.3 million

Liberty Energy Inc.'s debt-to-equity ratio offers insight into the company's financial leverage. As of December 31, 2024, the debt-to-equity ratio was approximately 0.17. This ratio is calculated by dividing the total liabilities by shareholder equity. A ratio of 0.17 indicates that Liberty Energy Inc. has $0.17 of debt for every dollar of equity, suggesting a relatively conservative approach to financing its operations. When compared to industry standards, it’s important to consider the capital-intensive nature of the energy sector. The company's debt-to-equity ratio is lower than some of its peers, which could indicate a more cautious financial strategy or stronger equity base.

Recent financial activities provide additional context to Liberty Energy Inc.'s debt management. In 2023, Liberty Energy Inc. successfully amended and extended its revolving credit facility, increasing the borrowing capacity from $350 million to $450 million. This amendment also extended the maturity date to November 2027, providing the company with enhanced financial flexibility and liquidity. As of December 31, 2024, the company had $213 million outstanding and $237 million available under the credit facility.

Liberty Energy Inc. strategically balances debt financing with equity funding to support its growth initiatives and manage its capital structure. The company's relatively low debt-to-equity ratio suggests a preference for equity funding, which reduces financial risk and provides stability. This approach is further supported by the company’s proactive management of its credit facility, ensuring access to additional capital when needed while maintaining a healthy balance sheet.

The following table summarizes key aspects of Liberty Energy Inc.'s debt profile:

For more detailed insights into Liberty Energy Inc.'s financial health, you can refer to this comprehensive analysis: Breaking Down Liberty Energy Inc. (LBRT) Financial Health: Key Insights for Investors

Liberty Energy Inc. (LBRT) Liquidity and Solvency

Assessing Liberty Energy Inc.'s (LBRT) liquidity involves examining key financial ratios and statements to understand its ability to meet short-term obligations. These metrics provide insights into the company's financial health and its capacity to manage its working capital effectively.

Key indicators and trends for evaluating Liberty Energy Inc.'s (LBRT) liquidity:

• Current and Quick Ratios: These ratios measure a company's ability to pay off its current liabilities with its current assets. The current ratio includes all current assets, while the quick ratio excludes inventory, which is generally less liquid.
• Analysis of Working Capital Trends: Monitoring the trends in working capital (current assets minus current liabilities) helps to assess whether a company is efficiently managing its short-term assets and liabilities.
• Cash Flow Statements Overview: Examining the cash flow statement provides a comprehensive view of how cash is generated and used by the company through its operating, investing, and financing activities.

Here's a breakdown of Liberty Energy Inc.'s (LBRT) liquidity position based on its recent financial data:

Current and Quick Ratios:

As of December 31, 2024, Liberty Energy Inc. (LBRT) reported a current ratio of 2.4x and a quick ratio of 2.0x. These ratios indicate a strong liquidity position, suggesting the company has sufficient current assets to cover its short-term liabilities.

Analysis of Working Capital Trends:

Liberty Energy Inc.'s (LBRT) working capital as of December 31, 2024, was $479 million, compared to $348 million at the end of the prior year. The increase in working capital reflects improved management of short-term assets and liabilities, contributing to enhanced liquidity.

Cash Flow Statements Overview:

For the year ended December 31, 2024:

• Net cash provided by operating activities was $439 million.
• Net cash used in investing activities was $197 million.
• Net cash used in financing activities was $48 million.

The strong cash flow from operations indicates that Liberty Energy Inc. (LBRT) is generating substantial cash from its core business activities, which supports its liquidity position.

Liberty Energy Inc. (LBRT) demonstrates a robust liquidity position supported by healthy current and quick ratios, increasing working capital, and strong cash flow from operations. This financial stability enables the company to meet its short-term obligations and invest in future growth opportunities.

For more insights into Liberty Energy Inc.'s (LBRT) core values, explore: Mission Statement, Vision, & Core Values of Liberty Energy Inc. (LBRT).

Liberty Energy Inc. (LBRT) Valuation Analysis

Determining whether Liberty Energy Inc. (LBRT) is overvalued or undervalued involves analyzing several key financial metrics and market indicators. Here's a breakdown:

• Access Breaking Down Liberty Energy Inc. (LBRT) Financial Health: Key Insights for Investors

Valuation Ratios:

• Price-to-Earnings (P/E) Ratio: The trailing P/E ratio as of April 2025 is around 5.85 to 8.0. The forward P/E ratio is significantly higher at 18.08 to 20.49.
• Price-to-Book (P/B) Ratio: The Price-to-Book ratio is 0.90.
• Enterprise Value-to-EBITDA (EV/EBITDA): The EV/EBITDA ratio is 2.43 to 3.07.

Stock Price Trends:

• 52-Week High: $24.75
• 52-Week Low: $9.50
• Current Price: Around $11.06 to $12.08 as of April 18-20, 2025.
• The stock price has decreased by approximately -44.16% to -48.28% in the last 52 weeks.

Dividend Information:

• Annual Dividend: $0.32 per share.
• Dividend Yield: Approximately 2.62% to 2.93%.
• Payout Ratio: Around 19.74% to 21.13%.
• Dividend Frequency: Quarterly, with the next ex-dividend date expected to be June 6, 2025.

Analyst Consensus:

• The consensus rating is 'Moderate Buy' or 'Overweight.'
• The average 12-month price target is approximately $19.40 to $21.46.
• Price targets range from a low of $16.00 to a high of $25.00 to $27.30.

Here is a table summarizing key valuation metrics for Liberty Energy Inc. (LBRT):

Based on recent analyst ratings, thirteen analysts cover Liberty Energy Inc. Six analysts have a 'hold' recommendation, four have a 'buy' recommendation, and three have a 'strong buy' recommendation.

Given the data, Liberty Energy Inc. appears to have mixed signals regarding its valuation. The low P/E ratio might suggest it is undervalued, but the higher forward P/E ratio indicates expectations of future earnings growth. Analyst ratings lean towards a buy, with a potential upside based on the average price target.

Liberty Energy Inc. (LBRT) Risk Factors

Liberty Energy Inc. (LBRT) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges detailed in recent earnings reports and filings.

Industry Competition: The oilfield services sector is intensely competitive. Liberty Energy Inc. competes with other major service providers and smaller regional players. The intensity of this competition can pressure pricing and margins, affecting profitability. Factors such as technological innovation and service differentiation play crucial roles in maintaining a competitive edge. Failure to keep pace with industry advancements or offer competitive pricing could adversely affect the company's market share and financial performance.

Regulatory Changes: Changes in environmental regulations and policies significantly impact Liberty Energy Inc.’s operations. Stricter regulations on hydraulic fracturing, waste disposal, and emissions could increase operational costs and limit the company’s ability to operate in certain regions. Compliance with these regulations requires ongoing investment in technology and processes, potentially affecting capital expenditure and operational efficiency.

Market Conditions: As a provider of hydraulic fracturing services, Liberty Energy Inc.’s performance is closely tied to the exploration and production (E&P) activities of oil and gas companies. Fluctuations in commodity prices, particularly oil and natural gas, directly influence E&P spending. A downturn in commodity prices typically leads to reduced drilling activity, which in turn decreases demand for Liberty Energy Inc.’s services. Economic cycles, geopolitical events, and global supply-demand dynamics can all contribute to commodity price volatility, creating uncertainty in the market.

Operational Risks: Operational risks include equipment failures, supply chain disruptions, and logistical challenges. Hydraulic fracturing operations are complex and require specialized equipment and skilled personnel. Equipment malfunctions or failures can lead to costly downtime and delays. Disruptions in the supply chain for essential materials like proppant (frac sand) and chemicals can also impede operations and increase costs. Efficient logistics and transportation are critical for delivering services to remote locations, and any disruptions can negatively impact service delivery and profitability.

Financial Risks: Financial risks include debt levels and liquidity. Liberty Energy Inc.'s financial stability depends on its ability to manage its debt obligations and maintain sufficient liquidity to fund operations and capital expenditures. Economic downturns or industry-specific challenges can strain cash flow, making it difficult to meet financial obligations. Effective financial risk management is essential to ensure the company’s long-term solvency and stability.

Strategic Risks: Strategic risks involve decisions related to capital allocation, acquisitions, and market expansion. Incorrect investment decisions or poorly executed acquisitions can lead to financial losses and missed opportunities. Expanding into new geographic markets or service lines carries inherent risks, including unfamiliar regulatory environments and competitive landscapes. Careful strategic planning and risk assessment are necessary to mitigate these risks and achieve sustainable growth.

Mitigation Strategies: Liberty Energy Inc. employs several strategies to mitigate these risks. These include:

• Diversification of Services: Expanding its service offerings beyond hydraulic fracturing to include other oilfield services can reduce reliance on a single market segment.
• Technological Innovation: Investing in research and development to improve efficiency, reduce costs, and comply with environmental regulations.
• Strategic Partnerships: Forming alliances with other companies to share resources, access new markets, and enhance service capabilities.
• Financial Prudence: Maintaining a strong balance sheet with manageable debt levels and sufficient liquidity to weather economic downturns.

For instance, in the 2024 fiscal year, Liberty Energy Inc. reported a revenue of $3.9 billion. However, operational challenges and market volatility led to increased costs, impacting net income. The company's annual report highlighted specific instances of supply chain disruptions that increased material costs by approximately 15%. To counteract these challenges, Liberty Energy Inc. has focused on improving operational efficiencies and securing long-term supply contracts to stabilize costs.

Recent Filings: In their most recent filings, Liberty Energy Inc. emphasized the ongoing efforts to comply with evolving environmental regulations and highlighted investments in technologies aimed at reducing emissions. The company allocated approximately $20 million in 2024 to environmental compliance and research, demonstrating a commitment to sustainable operations.

Explore more about Liberty Energy Inc.'s investor profile: Exploring Liberty Energy Inc. (LBRT) Investor Profile: Who’s Buying and Why?

Liberty Energy Inc. (LBRT) Growth Opportunities

Liberty Energy Inc. (LBRT) is strategically positioned to capitalize on several key growth drivers. These include technological innovation, expansion into new markets, and strategic partnerships.

Analysis of key growth drivers:

• Product Innovations: Liberty Energy Inc. consistently invests in research and development to enhance its service offerings. This commitment allows the company to improve efficiency and reduce operational costs for its clients.
• Market Expansions: The company strategically targets growing shale plays and basins, extending its geographical footprint to capture emerging opportunities.
• Acquisitions: Liberty Energy Inc. may pursue strategic acquisitions to consolidate its market position and expand its service capabilities.

Future revenue growth projections and earnings estimates for Liberty Energy Inc. (LBRT) are based on several factors, including increased drilling and completion activities in key shale regions and continued efficiency gains through technological advancements. While specific figures can vary depending on market conditions, analysts generally expect steady revenue growth, driven by increased demand for hydraulic fracturing services. Keep in mind that these are estimates and are not guaranteed.

Strategic initiatives and partnerships may significantly drive future growth for Liberty Energy Inc. (LBRT). These include:

• Long-term agreements: Securing long-term contracts with major exploration and production companies provides a stable revenue stream and enhances predictability.
• Technology collaborations: Partnering with technology providers to develop and implement innovative solutions can improve service quality and efficiency.

Liberty Energy Inc. (LBRT) possesses several competitive advantages that position it favorably for future growth:

• Advanced Technology: The company's focus on developing and deploying innovative technologies, such as its digiFrac electric fleets, differentiates it from competitors.
• Operational Efficiency: Liberty Energy Inc.'s commitment to optimizing its operations and reducing costs enhances its profitability and competitiveness.
• Strong Customer Relationships: Building and maintaining strong relationships with key customers ensures repeat business and provides a competitive edge.

For additional insights into Liberty Energy Inc. (LBRT), consider exploring: Exploring Liberty Energy Inc. (LBRT) Investor Profile: Who’s Buying and Why?