Let's break down the competition between two smaller but important players in the Zacks Oil and Gas - Field Services industry: Flotek Industries FTK and ProPetro Holding Corp. PUMP. These companies provide essential services to oil and gas drillers, and they are both trying to adapt to a changing energy world.
Both companies are looking for more reliable income streams and trying to be less dependent on the ups and downs of drilling activity. FTK is getting into automated ways to measure oil and gas as it's transferred, and helping optimize mobile power sources. PUMP, through its new PROPWR division, wants to tap into the demand for industrial power beyond just oilfields. Both companies are making big bets on technology and long-term agreements to make their earnings more stable. Let's dig into their strategies to see which one might be a better investment right now.
The Case for FTK Stock
Flotek’s transformation hinges on building recurring, high-margin revenue streams. The deal with ProFrac Holding Corp. ACDC, which added 30 mobile gas monitoring and dual-fuel optimization units, marks a major step. With 22 units already under a six-year lease, the company expects $14 million in EBITDA from the deal in 2025, potentially rising to $27 million in 2026 when all assets are deployed. This shift mirrors a broader push into data analytics and power optimization, positioning FTK for steadier revenues compared to its historic chemicals-focused model.
Another exciting area for Flotek is "custody transfer automation." It is the process that decides how oil and gas revenues get split among producers, royalty owners and midstream companies. This process has typically been done manually, but Flotek’s JP3 XSPCT Analyzer brings automation and real-time data into the mix. The company has already uncovered millions of dollars in underpayments during early tests. Now, these tests are turning into monthly contracts, bringing in reliable, high-profit income. Combined with its Viper platform for ongoing monitoring, Flotek is carving out a unique spot in digital solutions for the oilfield.
Financial execution has been a key differentiator. Flotek has delivered 10 straight quarters of EBITDA improvement, growing adjusted EBITDA 93% year-over-year in Q1 2025 and trimming SG&A costs to just 11% of revenues. However, there is a risk: a large part of the company’s business relies on contracts with ProFrac, and FTK needs to get the rest of its PowerTech units working on time to meet its projected income goals.
The Case for PUMP Stock
ProPetro's main strategy is to expand beyond its traditional business of "pressure pumping" (a key part of fracking). It has launched PROPWR, a new division aimed at providing power for industrial uses, with plans to invest $230 million by 2026. This shows a clear move toward new markets. A 10-year contract to provide 80 megawatts of power to an oil and gas producer in the Permian Basin guarantees income, leading to more stable cash flow. Unlike Flotek's focus on data, PUMP is betting on large-scale infrastructure and the broader shift in energy sources.
PUMP is also prioritizing updating its equipment. The company is rolling out FORCE all-electric drilling fleets and bringing in new technologies like Aqua Prop and Par Five. These changes are improving its service profits while aligning operations with environmental goals. In the first three months of 2025, 75% of its equipment ran on cleaner "Tier IV dual-fuel" or electric systems, and half of its powerful hydraulic equipment is under long-term contracts. This helps protect the company from the wild swings in the short-term market that can hurt profits.
However, PUMP's main business is still heavily tied to drilling activity in the Permian Basin. This makes it more vulnerable to sudden changes in oil prices compared to Flotek's increasingly diverse income. The large amount of money needed for the PROPWR division and slower growth forecasts for the Permian also raise questions about how much return PUMP will get on its investments in the medium term.
Price Performance
FTK has surged over 170% in the past year, reflecting investor optimism around its strategic shift and recurring revenue model. PUMP is down nearly 30% over the same period, weighed by macro volatility and concerns around capital intensity.
Image Source: Zacks Investment ResearchValuation Comparison
Flotek trades at 1.59X forward sales, a premium to ProPetro’s 0.49X, reflecting stronger growth expectations and recurring revenue visibility. While PUMP's lower valuation might make it seem like a bargain given its assets, it also signals that investors are cautious about the risks involved in executing its plans and its large spending needs. Flotek's valuation, though richer, is supported by its improving profit margins and its shift toward more reliable earnings.
Image Source: Zacks Investment ResearchEPS Outlook
The Zacks Consensus Estimate for FTK’s 2025 EPS calls for an 85% year-over-year gain, with another 41% expected in 2026.
Image Source: Zacks Investment ResearchPUMP’s 2025 EPS is projected to drop 104%, with a sharp rebound of 365% in 2026 as PROPWR scales and fleet utilization recovers.
Image Source: Zacks Investment ResearchThis contrast highlights Flotek's more consistent earnings growth compared to PUMP's potential for a big turnaround that's still some time away.
Conclusion
Both FTK and PUMP carry a Zacks Rank #3 (Hold), reflecting mixed near-term visibility and sector headwinds. However, at this moment, FTK appears slightly better placed. Its recurring revenue growth, proven EBITDA momentum, and lower capital intensity provide a more stable path, even with concentration risk. ProPetro's long-term potential with its PROPWR division and updated equipment could be huge, but the large investments required and its continued reliance on the Permian Basin make its future outlook more unpredictable compared to Flotek's carefully planned, contract-driven shift.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Flotek Industries, Inc. (FTK): Free Stock Analysis Report ProPetro Holding Corp. (PUMP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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