Mammoth Energy Services, Inc. (TUSK): A Bull Case Theory

We came across a bullish thesis on Mammoth Energy Services, Inc. (TUSK) on Substack by Hidden Rock Capital. In this article, we will summarize the bulls’ thesis on TUSK. Mammoth Energy Services, Inc. (TUSK)'s share was trading at $2.73 as of 29th May.

Mammoth Energy Services (TUSK) announced the sale of most of its infrastructure business for $109 million and, notably, a significant share repurchase program authorizing up to the lesser of $50 million or 10 million shares by March 2026. This move underscores how undervalued TUSK is in the market.

With approximately 48 million shares outstanding and a post-transaction cash position of $160 million, the company’s market capitalization—at a stock price of $2.25 per share—sits at just $108 million. This means TUSK is currently trading below net cash, with no net debt, assigning effectively negative value to its remaining oilfield services and fracking proppant businesses.

The new buyback authorization, if fully executed, would retire over 20% of the current share base, creating a tighter float and likely driving a rerating of the stock. Even assuming zero value for the operating business, a simple valuation based solely on cash would imply a share price above $3.30, representing roughly 50% upside from current levels.

With the infrastructure sale proceeds strengthening the balance sheet and the repurchase plan adding a clear capital allocation catalyst, TUSK stands out as an extremely mispriced asset. The stock’s decline since previous coverage seems disconnected from the underlying value, and the latest developments reinforce a high-conviction opportunity.

Unless there is a material risk being overlooked, TUSK’s current price offers a compelling entry point with limited downside and a clean path to significant upside based purely on its cash position and pending buyback activity.

This update follows the author’s earlier bullish thesis from October 2024, when TUSK was trading around $4.50 after securing a $188 million settlement from PREPA that left it with an estimated pro forma net cash position covering 70% of its market cap. At the time, the company appeared significantly undervalued, with its infrastructure segment positioned as the primary growth driver.

Since then, however, the stock has declined sharply—now trading near $2.73 (down 39.3%)—despite meaningful balance sheet improvements. Against this backdrop, the latest developments, including the infrastructure sale and new share repurchase program, underscore the market’s pessimistic expectations that TUSK's management will find a way to destroy value at the company.

Mammoth Energy Services, Inc. (TUSK) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 9 hedge fund portfolios held TUSK at the end of the first quarter which was 9 in the previous quarter. While we acknowledge the potential of TUSK as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.