Should You Buy Solaris Energy Infrastructure for Growth & Innovation?

Energy equipment and technology provider Solaris Energy Infrastructure (SEI) has had a rough start in 2025, with its stock down more than 19% year to date. Meanwhile, peers NOV Inc. NOV and Matrix Service Company (MTRXSEI) have fared better, posting gains of 4.7% and 2.8%, respectively. Despite this short-term underperformance, SEI presents a strong investment case supported by robust financials, strategic expansion and technological advancements. Here’s why we believe the stock has solid long-term potential.

SEI’s Strong Revenue Growth Supported by Business Expansion

Solaris Energy Infrastructure has consistently demonstrated revenue growth, fueled by strategic business expansion and high client retention. In fourth-quarter 2024, the company posted a 15% year-over-year revenue increase, highlighting strong demand for its infrastructure solutions. Higher utilization rates and successful project completions have contributed to this growth, while an improved gross margin—up 200 basis points—reflects operational efficiencies. Management has reaffirmed double-digit revenue growth guidance for 2025, further reinforcing SEI’s long-term potential.

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Robust Financial Position Aids Solaris Energy’s Shareholder Returns

A strong balance sheet, accompanied by substantial cash flows, enables SEI to fund growth initiatives while maintaining shareholder-friendly policies. Solaris Energy Infrastructure has consistently repurchased shares and paid dividends, underscoring confidence in future earnings. Its disciplined capital allocation strategy ensures sustainable investor value, making the stock an attractive pick for long-term holders seeking both growth and income.

Technological Advancements Driving SEI’s Competitive Edge

Solaris Energy Infrastructure continues to invest in cutting-edge technology to enhance operational efficiency and maintain its competitive edge. AI-driven automation and cloud-based solutions have improved project execution and client engagement. These advancements position SEI well, as digital transformation accelerates across the energy sector, further supporting stock price appreciation.

Solaris Energy’s Expansion Into High-Growth Renewable Energy Markets

SEI is aggressively expanding into renewable energy, particularly in grid modernization and battery storage. The company secured $500 million in new contracts in 2024, primarily in solar and wind infrastructure. These projects are expected to meaningfully contribute to revenues in 2025 and beyond. With government incentives and corporate decarbonization efforts driving demand, Solaris Energy Infrastructure is well-positioned to benefit from the accelerating energy transition.

Favorable Regulatory and Policy Tailwinds for SEI

The U.S. Inflation Reduction Act (IRA) and increased federal investments in energy infrastructure provide a favorable policy backdrop for SEI. Tax credits and funding programs are expected to accelerate project approvals and reduce costs, creating significant growth opportunities. Additionally, new partnerships with utilities leveraging these incentives should further strengthen SEI’s market position and attract more institutional investors.

Solaris Energy Infrastructure Backed by Strong Earnings Outlook

Despite its recent dip, SEI’s stock has experienced a meteoric rise over the past year, surging over 168%, while NOV Inc. declined 22% and Matrix Service Company dropped 6%.

SEI, NOV and MTRX 1-Year Stock Performance

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The company’s strong earnings outlook adds further credibility to its growth trajectory. The Zacks Consensus Estimate for Solaris Energy Infrastructure’s 2025 earnings suggests a 14% increase, followed by a remarkable 111% growth projection for 2026. Such substantial earnings expansion, coupled with SEI’s ongoing strategic initiatives, reinforces its long-term investment appeal.

Image Source: Zacks Investment Research

Conclusion: SEI Stock Is a Buy

Solaris Energy Infrastructure, along with NOV Inc. and Matrix Energy Company, operates within the Zacks Oil and Gas - Mechanical & Equipment industry, but its growth trajectory stands out. While the stock has faced short-term pressure, its strong revenue performance, technological advancements, expansion into renewable markets, and favorable regulatory backdrop position it for sustained upside. With robust earnings growth expected in the coming years, SEI presents an attractive buying opportunity for investors seeking exposure to the evolving energy infrastructure sector.

Solari Energy Infrastructure carries a Zacks Rank #2 (Buy) at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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