Solaris Energy Infrastructure, Inc. (SEI) stock intrinsic value fair value estimate & owner earnings analysis

Solaris Energy Infrastructure (formerly Solaris Oilfield Infrastructure) has changed from a small oilfield equipment company into a company that rents power generation equipment, mostly to artificial intelligence data centers. In 2025 revenue was $622.2 million, up from $313.1 million in 2024. The power rental segment was $333.5 million of that, versus $38.6 million a year earlier. The older oilfield logistics segment (equipment and services for oil and gas producers and oilfield service companies) had revenue of $288.7 million in 2025, $274.5 million in 2024 and $292.9 million in 2023, and its segment profit before depreciation, interest and taxes fell from $115.1 million in 2023 to $97.6 million in 2024 and $88.9 million in 2025. How we measure earnings. We start from cash generated by operations, remove swings in receivables, payables, inventory and customer prepayments, subtract stock compensation as a real cost, and subtract the spending needed just to keep equipment running. Because almost all of the 2025 capital spending ($646.8 million) was for new power equipment rather than upkeep, we treated upkeep spending as no more than depreciation ($84.3 million in 2025). On that basis earnings available to owners were about $117.3 million in 2025, or $1.81 per share (Class A plus Class B shares, since both share the company's earnings equally), versus $31.7 million, or $0.63, in 2024. We cross-checked 2025 by rebuilding cash from operations from net income, depreciation, and other non-cash items less working-capital changes; it matched the reported $209.1 million exactly. Our owner-earnings figure differs from a plain net-income build only by the stock compensation and the $3.7 million cash settlement of stock awards, which we deliberately charge. Earlier years were $2.14 (2018), $2.30 (2019), $0.32 (2020), $0.09 (2021), $1.01 (2022) and $1.11 (2023). Because the September 2024 acquisition of the power business changed what this company is, and the power fleet is still being built, we did not simply take a median of past years. Instead we valued the contracts and equipment the company already has under way. What we credited (growth we can point to). (1) About 630 MW of power equipment already deployed at year-end 2025, under agreements that mostly run two to seven years; we credit the earnings of that fleet for four years only. (2) The Stateline project, about 900 MW for a data-center customer, with an initial seven-year term and revenue expected to begin in 2026. The company owns 50.1% and the customer 49.9%, so we count only the company's share after the project's own interest. (3) A 500 MW rental agreement with Hatchbo, LLC, an affiliate of an investment-grade technology company, that starts January 1, 2027 with a ten-year term and one five-year extension option. Stateline has a further $304.1 million of equipment purchase commitments, expected to be funded by its term loan and its own cash flows. By our count, about 170 MW of the planned total of roughly 2,200 MW by early 2028 has no named contract, and we did not credit it, nor any new customers or rise in rental prices. Steady-state earnings on this contracted base come to roughly $180 million a year from 2028, of which the oilfield logistics business contributes about $32 million and declines. Base case, $13.9 per share. Fleet earnings run for their contract terms; nothing is assumed for the existing fleet or Stateline after their terms end; the Hatchbo extension is credited at half of current earnings for five years; oilfield logistics earnings decline 8% a year (they fell about 12% a year from 2023 to 2025, but revenue has held steady). In 2025 owner earnings grew about 270% in total dollars; our first forward year assumes about $150 million, roughly 28% above 2025, which is below that trailing rate. Bull case, $20.3 per share. Existing fleet contracts are renewed on similar terms for five more years, Stateline and Hatchbo are both extended, and logistics declines only 4% a year. Bear case, about negative $1.5 per share. Contracts end at their stated terms with no renewals, the existing fleet's earnings stop after three years, logistics falls 12% a year, and the convertible notes ($155 million due 2030 and $747.5 million due 2031) and the company's share of the Stateline term loan must be repaid in cash out of that cash flow. In that case the company owes about $100 million more than the equipment and contracts are worth. Risks and what could make these estimates wrong. One data-center customer accounted for 88% of power revenue in 2025, and Stateline is expected to be about 41% of power capacity. Power equipment comes largely from one supplier. Debt has grown sharply: at year-end 2025 the company had $902.5 million of convertible notes and $186.0 million drawn on the Stateline loan, and its June 30, 2026 quarterly report shows long-term debt other than the convertible notes of $1,597.6 million, total liabilities of $3,051.8 million and cash of $824.1 million. We could not determine from the available filings what the new borrowings cost or when they must be repaid, and we did not model them beyond the bear case; they could make even the base case too generous. Cash flow in the first half of 2026 was helped by a $181.3 million increase in deferred customer revenue, which we removed as timing. We used the 68.5 million Class A and Class B shares outstanding in February 2026; any shares issued afterward would lower the per-share values. The convertible notes are treated as debt; if converted, they would add shares. The Hatchbo agreement can end earlier if the parties agree a power purchase or similar agreement instead. Purchase commitments of $851.9 million at year-end 2025 can be cancelled but carry penalties of 5% to 90% of the remaining price.