Strong Utilization and Favorable Pricing Drove 16% Revenue Gains for Liberty in Q1; FVE up to $15

Liberty Oilfield Services posted very strong results in its first quarter of 2022, with revenue increasing 44% year over year and 16% sequentially. Operating profits were positive for the first time in two years, reaching 1% for the quarter. A favorable operating environment drove most of the top and bottom line improvements, and vertical integration from the OneStim and PropX acqusitions further boosted profits this quarter. We’re optimistic about Liberty’s ability to maintain these improvements through 2022 onward as it leverages the technology acquired through these deals across its operations. By our estimate, top line growth will average 11% over the next five years, and operating margins will improve steadily, reaching 8% by midcycle. We’re therefore increasing our fair value estimate to $15 from $12. We maintain our no-moat rating and stable moat trend.