Derek Podhaizer, an analyst from Piper Sandler, has initiated a new Buy rating on Solaris Energy Infrastructure (SEI).
Derek Podhaizer has given his Buy rating due to a combination of factors influencing Solaris Energy Infrastructure (SEI). The company is undergoing a significant transformation by expanding into Power Services, driven by the acquisition of Mobile Energy Rentals in July 2024. This strategic move positions SEI at the forefront of the increasing demand for power generation, particularly from generative AI data centers and production-oriented oil and gas markets. The shift towards distributed power generation is becoming more permanent as power demands rise and grid connectivity faces delays.
Furthermore, SEI’s planned capacity of 680MW, coupled with their balance-of-plant solutions and multi-year contracts, provides a solid foundation to capitalize on industry growth. The valuation of SEI is based on a sum-of-the-parts (SOTP) approach, with a $37 price target reflecting the potential of Power Solutions’ significant contribution to EBITDA by 2026. The expansion into Power Services, led by an experienced industry veteran, signals SEI’s commitment to capturing the benefits of the electrification movement, thereby justifying the Buy rating.
SEI’s price has also changed dramatically for the past six months – from $12.020 to $30.020, which is a 149.75% increase.