Stabilis Solutions, Inc. (SLNG) stock intrinsic value fair value estimate & owner earnings analysis

Stabilis Solutions produces and distributes small-scale liquefied natural gas (LNG) to customers in marine bunkering, aerospace, industrial, remote power, and utility markets, largely along the U.S. Gulf Coast and in Mexico. The business also holds a 40%-owned joint venture (BOMAY) that makes electrical control systems for the energy industry in China; this is a minority equity stake, not an operating presence, and does not change our view of the company as a U.S.-based business. Over the past five years, cash generated from operations after adjusting for the reinvestment needed just to keep the existing fleet and plant running has hovered close to breakeven, swinging from meaningfully negative in weak years to solidly positive in the unusually strong 2022, when a spike in natural gas price spreads lifted revenue to nearly $99 million before settling back into the high-$60-million to low-$70-million range in 2023-2025. We treat that 2022 spike as a favorable but non-recurring pricing environment rather than a sustainable step-up in earning power. On a normalized basis, owner earnings per share over this period have averaged close to zero, and 2025's figure - a loss of about $0.07 per share - is representative of where the business sits today. Two things distinguish today's picture from a mature, steady-state LNG distributor. First, spending on trucks, containers, and plant has consistently run ahead of depreciation in recent years, even in years when revenue was flat or falling - money we count fully as a cost of doing business under our approach, even though a good portion of it appears to be funding capacity for contracts that have not yet started. Second, the company has just signed two contracts that could meaningfully change its trajectory: a multi-year time charter for a Jones Act-compliant LNG bunkering vessel (signed December 2025, commencing 2026) and a multi-year take-or-pay contract, worth roughly $200 million over its term, to supply LNG for behind-the-meter power generation at a data center, with deliveries expected to begin in the first quarter of 2027. Both are tied to a proposed new LNG liquefaction facility in Galveston, Texas that is still under construction. Because neither of these contracts had started generating cash as of the most recent fiscal year, our near-term forecast does not assume an immediate jump in earnings - we expect 2026 to look similar to or slightly worse than 2025, since the vessel charter and facility construction add cost before the offsetting revenue arrives. The improvement in our base case begins in 2027, when data-center deliveries are scheduled to start, and builds through the rest of the decade as both new contracts reach full run-rate alongside the existing distribution business. Our base case assumes this transition goes reasonably well: the Galveston facility and bunkering vessel come online close to plan, the data-center contract performs as written, and the legacy distribution business - fairly concentrated, with its three largest customers accounting for two-thirds of 2025 revenue - holds roughly steady. That points to a value in the high two-dollar range per share, with a meaningful share of that value resting on Stabilis continuing to win new multi-year contracts to replace ones that eventually expire, rather than on any single contract lasting forever. Our bear case reflects real, disclosed risk rather than a generic discount. The company has flagged that its current working capital may not be sufficient to fund the Galveston facility and the data-center contract's start-up costs, raising the risk of a dilutive equity or debt raise. There is also a precedent for contracts not being renewed: an earlier truck-to-vessel bunkering agreement in Galveston ended when the customer chose not to extend it. If the new bunkering and data-center contracts are delayed, scaled back, or require dilutive financing, and legacy revenue keeps drifting down as it has since 2022, owner earnings could stay negative for several more years, leaving per-share value only modestly above zero. Our bull case assumes the data-center contract is the first of several similar wins, marine bunkering scales quickly as new Jones Act-compliant vessels enter Gulf Coast trade, and the Galveston facility unlocks higher-margin volume across both businesses - pushing revenue meaningfully above its 2022 peak on the back of better-quality, longer-term contracts rather than a one-off price spike. Two accounting judgments are worth noting. We removed swings in working capital and stock-based compensation from our earnings figure, since these are timing items or non-cash charges rather than the ongoing economic engine of the business; cash actually received from the Chinese joint venture (as opposed to its non-cash equity earnings) was left in place, since it is real distributed cash. We also treated all of 2023's and 2025's capital spending as a cost of maintaining the existing business - even though some of it likely represents early investment in the Galveston facility and bunkering vessel - because revenue did not grow in those years; this is a deliberately conservative convention that probably understates the company's true current earning power to the extent that spending is really funding the contracts described above, and we account for that upside instead through the pace of the recovery we model starting in 2027. Putting these together, the margin-of-safety price sits at a significant discount to our base-case estimate, reflecting the wide range of outcomes tied to successful execution of two large, not-yet-started contracts. Confirmation that data-center deliveries have begun (expected in the first quarter of 2027) and that the Galveston facility and bunkering vessel have been funded without heavy shareholder dilution would strengthen confidence in the estimate.