LBRT Stock Up 28% in a Month: Should Investors Hold or Move On?

Liberty Energy Inc. LBRT has delivered a robust 28.4% gain in its share price over the past month, outperforming both its sector’s gain of 11.7% and its sub-industry’s rise of 14.7%. This outperformance signals strong relative strength and highlights the company’s favorable positioning. With such momentum, LBRT stands out as a compelling candidate in terms of investor attention that is worth tracking closely.

Stock Price Change Over the Past Month

Liberty Energy is a leading North American oilfield services company, specializing in hydraulic fracturing, wireline, proppant delivery, sand mining and natural gas solutions across major North American shale basins. The company operates approximately 40 active frac fleets and emphasizes next-generation technologies such as digiFleets and dual-fuel systems to improve efficiency and lower emissions. Through Liberty Power Innovations (LPI), it is expanding into distributed power generation for data centers and industrial customers. With a strong technology focus, vertical integration and a broad basin footprint, Liberty Energy positions itself as an innovation-driven completions leader.

However, for investors, the key debate is whether LBRT’s strong run has more room to extend or if the rally has priced in much of the upside. With the company’s diversification strategy and the evolving technology focus playing a critical role, the stock’s prospects warrant a closer examination before deciding whether to buy, hold or take profits.

Factors Favoring LBRT Stock’s Growth

Strong Position in High-Growth Data Center Power Market: Liberty Energy’s LPI distributed power platform is targeting about 3 gigawatts of deployment by 2029, primarily serving hyperscale data centers. The company has already secured firm reservations, including a 1 GW framework agreement and additional 330 MW commitments, anchored by long-term Energy Services Agreements (ESAs). These contracts are structured for high-teens unlevered returns and long-duration cash flows. With AI-driven data center demand expected to surge through 2030, Liberty Energy is positioned in a structural growth market that is far less cyclical than oilfield services.

Long-Term, Grid-Parity Economics With Inflation Advantage: Management emphasized that its gas recip-based power solution is competitive with grid pricing today and expected to become structurally cheaper over time due to lower fuel inflation relative to grid transmission upgrades. The ability to provide predictable 15-year pricing through ESAs creates strong customer value and revenue visibility. This inflation-resistant power model may provide durable margin expansion and recurring earnings starting meaningfully in 2027 and beyond.

Technological Differentiation in Core Completions Business: Liberty Energy continues investing in AI-driven automation, including Atlas and Atlas IQ platforms, which enhance real-time data analytics and operational efficiency. The company reported about a 14% reduction in maintenance cost per unit of work through digiTechnologies. In a competitive pricing environment, superior technology allows Liberty Energy to defend market share and capture quality-driven demand from E&Ps seeking efficiency and continuous pumping operations.

Balanced Capital Allocation and Shareholder Returns: In 2025, Liberty Energy returned $77 million to its shareholders via dividends and buybacks while investing heavily in growth initiatives. The company maintains $281 million in liquidity and a moderate net debt. Project-level financing is expected to fund much of the power expansion, limiting corporate leverage expansion and preserving financial flexibility.

Challenges for LBRT Stock

Elevated Investment Risk Amid Rising Power Competition: Liberty Energy’s distributed power strategy requires heavy upfront capital in 2026, yet meaningful EBITDA contribution is not expected until 2027, creating a near-term cash flow gap. This extended investment phase coincides with rising competitive intensity, as OEMs and gray-market turbine suppliers enter the data center power market. If excess capital or alternative supply models pressure pricing, projected high-teens returns could compress, weakening the long-term payoff and increasing valuation risk before earnings scale.

Near-Term EBITDA Expected to Decline in 2026: Management indicated that 2026 adjusted EBITDA will likely decline year over year as frac pricing resets lower following the request for proposal season in the second half of 2025, with pricing down low-to-mid single digits versus late 2025 levels. While revenues are expected to remain roughly flat, improved utilization is not sufficient to offset pricing pressure and incremental LPI development costs of $15-$20 million. Additionally, the fourth quarter of 2025 benefited from unusually strong activity that management characterized as somewhat anomalous, suggesting earnings normalization ahead. Together, these factors point to margin compression and softer profitability in the near term.

Exposure to Volatile Oilfield Services Pricing: Frac pricing is down relative to late 2025, and oil markets remain range-bound due to structural surplus and geopolitical uncertainty. If oil prices weaken further, E&P spending could decline, putting additional pressure on fleet utilization and margins. Until power becomes a larger earnings contributor, Liberty Energy remains meaningfully exposed to upstream volatility.

Heavy Capital Requirements and Execution Risk: Projected 2026 power-related capex could exceed $700 million-$900 million (including deposits and project spending). Even with project financing, large-scale execution across multiple gigawatt-scale developments carries construction, permitting and operational risks. Delays or cost overruns could materially impact expected high-teens returns.

Final Verdict on LBRT Stock

Liberty Energy has rallied sharply, reflecting strong positioning in North American completions and growing excitement around its distributed power platform. Long-term contracts in the data center market, technology-driven efficiency gains and disciplined capital returns support a constructive multi-year outlook.

However, near-term EBITDA is expected to decline in 2026 amid frac pricing resets, rising LPI development costs and heavy capex commitments. Oilfield services exposure also leaves earnings vulnerable to commodity volatility. With growth prospects balanced by execution and margin risks, a wait-and-see approach appears prudent for this Zacks Rank #3 (Hold) company — allowing investors to participate in structural upside while waiting for clearer earnings traction.

Stocks to Consider

Investors interested in some better-ranked stocks in the oil and gas field services might look at stocks like Archrock, Inc. AROC, Oceaneering International, Inc. OII and TechnipFMC plc FTI. While Archrock sports a Zacks Rank #1 (Strong Buy) at present, Oceaneering International and TechnipFMC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock started as a broader energy services provider but has steadily refocused its business to become a premier compression services company, primarily supporting natural gas production, processing and transportation. The Zacks Consensus Estimate for AROC’s 2025 earnings indicates 52.4% year-over-year growth.

Houston, TX-based Oceaneering International is one of the leading suppliers of offshore equipment and technology solutions to the energy industry. The Zacks Consensus Estimate for OII’s 2025 earnings indicates 76.3% year-over-year growth.

Newcastle & Houston-based TechnipFMC plc is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The Zacks Consensus Estimate for FTI’s 2025 earnings indicates 24.7% year-over-year growth.

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

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