$0.00
$1.33
bear $0.00
base $0.36
bull $1.33
margin of safety $0.60
market price* $2.71
Business condition attached to the margin of safety
Two consecutive quarters of positive operating cash flow (before purchases of aircraft and equipment), showing that the fleet bought in 2025 and 2026 is producing cash.
Mammoth Energy Services is a much smaller and different company than it was a year ago. In 2025 it sold most of its utility infrastructure work (April, about $108.7 million), its hydraulic fracturing equipment (June, $15.0 million), a sand processing plant (September) and its engineering business (December, about $30.0 million). What remains is a small collection of businesses: equipment and aircraft rental, fiber-optic construction, natural sand for oil and gas drilling, remote-site accommodations and directional drilling. Revenue from these businesses was $44.3 million in 2025 against $45.6 million in 2024. In the first half of 2026 revenue rose to $48.1 million from $24.0 million a year earlier, and the company reported a small operating profit of $1.8 million for the six months (a $0.9 million loss in the first quarter and a $2.6 million profit in the second). Why the past earnings do not help. The company's history is dominated by Puerto Rico power-grid work and by oilfield services. Our owner-earnings figures per share for 2017 through 2025 swing from $9.02 (2018) to negative $1.92 (2025): $2.76, $9.02, $0.11, $1.27, negative $0.47, $1.50, $0.30, negative $0.51, negative $1.92. In 2024 the company collected large sums from the Puerto Rico power utility, which produced $180.7 million of operating cash flow that year, and most of that business has since been sold. Because the company was transformed by the 2025 sales, only the current, much smaller business describes what shareholders own, and that business has not yet produced positive cash flow. We therefore do not use an earnings level as the anchor. In 2025 the company spent $70.6 million on property and equipment, mostly aircraft and rental equipment (rental-segment purchases of $70.0 million versus $0.4 million in 2024); our method counts all of it as upkeep when revenue is not growing, which is why 2025 looks so negative. Without those fleet purchases, 2025 owner earnings would have been about negative $23 million. What the shares appear to be worth. With no proven earning power, the value rests on what the company holds after its obligations. At June 30, 2026 it had $50.9 million of cash and $26.2 million of marketable securities, or about $77.0 million, plus restricted cash. Against that stands $39.9 million of income taxes payable at year-end 2025, leaving roughly $37.1 million, or about $0.77 per share on roughly 48.2 million shares. The company also holds $106.1 million of property and equipment and $39.6 million of sand reserves (year-end 2025 book values), and it spent a further $55.7 million on equipment in the first half of 2026. We do not credit these at book value, because nothing in the filings yet shows them earning cash. Operating cash flow was negative $10.0 million in the first half of 2026, about the same as the negative $9.8 million in the first half of 2025, even though revenue doubled. Bear case: about $0.00 per share. Cash burn stays at the first-half 2026 pace of about $20 million a year for two years, consuming roughly $40 million. Puerto Rico municipalities and Foreman Electric Services appealed the court order approving the 2024 settlement with the Puerto Rico power utility; the company has promised to reimburse the utility if it is later forced to pay the municipalities, and backed that promise with an $18.4 million letter of credit. It had $12.1 million of restricted cash at year-end 2025 (it set aside $19.3 million as collateral in 2024), so if the full letter of credit were drawn we count the uncovered part, about $6.3 million, as a loss. Together these exhaust the liquid resources of about $37.1 million. The sand business shows why: 2025 sand revenue was $16.6 million against $18.1 million of cost of revenue before depreciation. We assign nothing to the remaining fleet and mine because no evidence shows them earning a return in this case. This is a case in which little is left for shareholders, but the company does not appear to owe more than it holds. Base case: about $0.36 per share. Cash burn continues at about $20 million for the next twelve months, which is in line with the first half of 2026 and with 2025 excluding the fleet purchases, and then stops. This is the middle case rather than a proven one: the reasons to expect the burn to end are the swing to an operating profit in the second quarter of 2026 (revenue of $26.1 million) and the fleet already purchased. We credit no earnings beyond breakeven. For reference, owner earnings fell from negative $0.51 per share in 2024 to negative $1.92 in 2025, and our first-year assumption of about negative $0.41 per share (a $20 million burn) is better than 2025 only because 2025 carried the $70.6 million of fleet purchases. The result is about $17.1 million, or $0.36 per share. Growth in revenue, aircraft leasing and recovery of the roughly $20.0 million still owed by the Puerto Rico power utility at year-end 2025 are left out, because none has a contract or track record we can point to. Bull case: about $1.33 per share. The 2025 and 2026 equipment purchases produce what the second quarter of 2026 suggests: about $5 million a year of owner earnings (roughly half of the second quarter's annualized operating profit, allowing for upkeep), starting after a further $10 million of burn, and lasting ten years, after which we credit nothing. Ten years of $5 million discounted at 6% is about $36.8 million, added to $27.1 million of liquid resources, or about $63.9 million in total. What would prove this wrong: two or three quarters of positive operating cash flow would show the fleet is earning and would point toward the bull case; a court ruling against the Puerto Rico settlement or further cash burn would point toward the bear case. We could not determine from the filings how much of the first-half 2026 cash burn came from paying down taxes and working capital versus operations, or how much the company will collect from the Puerto Rico power utility and when. The tax balance is as of December 31, 2025; a later figure was not available to us.