Nuverra Environmental Solutions, Inc. (NES)

Nuverra Environmental Solutions, Inc. (NES) Industrial Operations Profile

Nuverra Environmental Solutions, Inc. delivers water logistics and oilfield services, specializing in water transfer, disposal, and rental solutions for shale oil and gas development across the Rocky Mountain, Northeast, and Southern regions. As a subsidiary of Select Energy Services, Nuverra addresses critical needs in the energy sector.

What Is the Investment Thesis for NES?

Nuverra Environmental Solutions, Inc. presents a focused investment opportunity within the oilfield services sector, specifically in water logistics and disposal. The company's strategic positioning in key shale regions, coupled with its comprehensive service offerings, supports sustained revenue generation. However, the negative P/E ratio of -0.77 and a profit margin of -40.0% indicate financial challenges that require careful consideration. Future growth hinges on Nuverra's ability to optimize operational efficiencies and capitalize on the increasing demand for water management solutions in shale development. Investors should monitor the company's progress in improving profitability and leveraging its subsidiary status under Select Energy Services, Inc. to enhance market penetration and service delivery. The beta of 1.63 suggests higher volatility compared to the market, adding another layer of risk assessment.

Based on FMP financials and quantitative analysis

NES Key Highlights

• P/E ratio of -0.77, indicating the company is currently not profitable.
• Gross Margin of 20.8%, reflecting the company's efficiency in managing production costs.
• Operates a fleet of over 388 trucks across three divisions, supporting extensive water logistics operations.
• Manages a network of 40 salt water disposal wells, providing critical disposal services for oil and gas production.
• Beta of 1.63, suggesting higher volatility compared to the broader market.

Who Are NES's Competitors?

NES is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are NES's Key Strengths?

• Comprehensive water logistics and oilfield services.
• Strategic locations in key shale regions.
• Established network of salt water disposal wells.
• Subsidiary of Select Energy Services, Inc.

What Are NES's Weaknesses?

• Negative P/E ratio and profit margin.
• High beta indicating higher volatility.
• Dependence on oil and gas prices.
• AI analysis pending, indicating potential gaps in understanding.

What Could Drive NES Stock Higher?

• Increasing demand for water management services in shale development.
• Potential for strategic partnerships and acquisitions to expand service offerings.
• Development of sustainable water management solutions (2026-2027).
• Geographic expansion into new shale plays (2027-2028).

What Are the Key Risks for NES?

• Negative return on equity (-28.8%) — the business is not currently generating profit on shareholder capital.
• Insider selling — insiders were net sellers of roughly $60.9M recently.
• Fluctuations in oil and gas prices affecting drilling activity.
• Increasing environmental regulations impacting disposal costs.
• Intense competition in the oilfield services sector.
• Economic downturns reducing demand for oilfield services.

What Are the Growth Opportunities for NES?

• Expansion of Water Disposal Capacity: The increasing stringency of environmental regulations and the rising volume of produced water from shale formations drive the need for expanded water disposal capacity. Nuverra can capitalize on this by developing new disposal wells and optimizing existing facilities. The market for water disposal services is projected to grow as shale production increases, offering a significant revenue opportunity for Nuverra. Timeline: Ongoing.
• Enhancement of Water Transfer Services: Efficient water transfer is crucial for hydraulic fracturing operations. Nuverra can enhance its water transfer services by investing in advanced pipeline infrastructure and mobile transfer technologies. This would enable faster and more reliable water delivery, improving operational efficiency for oil and gas operators. The market for water transfer services is expected to grow, driven by the increasing demand for hydraulic fracturing. Timeline: Ongoing.
• Geographic Expansion into New Shale Plays: Nuverra can expand its operations into emerging shale plays to diversify its revenue streams and reduce its reliance on existing regions. This would involve establishing new facilities and service networks in areas with growing oil and gas production. The geographic expansion would allow Nuverra to capture new market share and increase its overall revenue. Timeline: 2027-2028.
• Development of Sustainable Water Management Solutions: The industry is increasingly focused on sustainable water management practices. Nuverra can develop and offer innovative solutions for water recycling and treatment, reducing the environmental impact of oil and gas operations. This would position Nuverra as a leader in sustainable water management and attract environmentally conscious customers. Timeline: 2026-2027.
• Strategic Partnerships and Acquisitions: Nuverra can pursue strategic partnerships and acquisitions to expand its service offerings and market reach. This could involve partnering with technology companies to develop advanced water management solutions or acquiring smaller service providers to increase its geographic footprint. Strategic partnerships and acquisitions would accelerate Nuverra's growth and enhance its competitive position. Timeline: Ongoing.

What Opportunities Does NES Have?

• Expansion of water disposal capacity.
• Enhancement of water transfer services.
• Geographic expansion into new shale plays.
• Development of sustainable water management solutions.

What Threats Does NES Face?

• Fluctuations in oil and gas prices.
• Increasing environmental regulations.
• Intense competition in the oilfield services sector.
• Economic downturns affecting drilling activity.

What Are NES's Competitive Advantages?

• Established network of salt water disposal wells provides a competitive advantage.
• Strategic locations in key shale regions offer proximity to customers.
• Comprehensive service offerings create a one-stop solution for water management.
• Long-term relationships with oil and gas operators ensure recurring revenue.

What Does NES Do?

Nuverra Environmental Solutions, Inc., established in 2007 and formerly known as Heckmann Corporation until its rebranding in May 2013, is a key provider of water logistics and oilfield services to the oil and natural gas industry. Headquartered in Houston, Texas, Nuverra focuses on supporting the development and ongoing production of oil and natural gas from shale formations across the United States. The company's services encompass water transfer, disposal, rental, and other essential services required during the drilling, completion, and production phases of shale oil and natural gas extraction. Nuverra operates through three distinct divisions: the Rocky Mountain, the Northeast, and the Southern divisions. Each division is equipped with a fleet of trucks and a network of salt water disposal wells, operating under brand names such as Landtech, Nuverra, Heckmann, and Clearwater. These divisions also maintain and lease rental equipment, including tanks, loaders, manlifts, light towers, winch trucks, and other specialized equipment, to oil and gas operators. As of February 23, 2022, Nuverra Environmental Solutions, Inc. operates as a subsidiary of Select Energy Services, Inc., enhancing its capabilities and market reach within the oilfield services sector.

What Products and Services Does NES Offer?

• Provides water transfer services for hydraulic fracturing operations.
• Offers salt water disposal services for produced water from oil and gas wells.
• Rents and leases specialized equipment, including tanks, loaders, and winch trucks.
• Manages and operates a network of salt water disposal wells.
• Offers oilfield labor services to support drilling and completion activities.
• Operates a 60-mile underground twin pipeline network in the Southern Division.

How Does NES Make Money?

• Generates revenue through water transfer and disposal services.
• Earns income from the rental and leasing of oilfield equipment.
• Receives fees for oilfield labor services.
• Operates salt water disposal wells, charging fees for disposal services.

What Industry Does NES Operate In?

Nuverra Environmental Solutions operates within the oilfield services sector, which is heavily influenced by oil and gas prices, drilling activity, and environmental regulations. The demand for water management services, including water transfer and disposal, is driven by the increasing production from shale formations. The industry is competitive, with companies like ALTS, CHRA, DRTT, HTCO, and LICY vying for market share. Nuverra's focus on water logistics positions it to capitalize on the growing need for sustainable water management solutions in oil and gas operations.

Who Are NES's Key Customers?

• Oil and gas operators focused on shale development.
• Companies involved in drilling and completion activities.
• Producers requiring water management solutions.
• Clients in the Rocky Mountain, Northeast, and Southern regions.

Company Profile

Nuverra Environmental Solutions, Inc. operates in the Waste Management industry within the Industrials sector. It is headquartered in Scottsdale, US. The company is led by CEO Charles Thompson. NES has traded publicly since 2017.

ROE -29%Key Financial Metrics

Return on equity for Nuverra Environmental Solutions, Inc. stands at -28.8%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is -23.1%, showing how much profit it generates from its asset base. A current ratio of 2.21 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is -130.3%, the inverse of the P/E and a quick read on earnings relative to price.

Net sellingInsider Activity

The most recent 12 insider filings for Nuverra Environmental Solutions, Inc. break down as 9 sales and 3 purchases. On net that is roughly 7.0M shares disposed (about $60.9M), a signal worth weighing alongside the fundamentals.

NES Financials

NES Latest News

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NES Analyst Consensus

NES MoonshotScore

NES Industrials Stock FAQ

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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