Mammoth Energy Services, Inc. (NASDAQ:TUSK) is a company involved in providing oilfield services, infrastructure services, and energy logistics. It operates in a competitive industry with peers like KLX Energy Services Holdings, Inc. (KLXE), Select Energy Services, Inc. (WTTR), Smart Sand, Inc. (SND), NCS Multistage Holdings, Inc. (NCSM), and ProPetro Holding Corp. (PUMP). These companies are all part of the energy sector, focusing on various services related to oil and gas production.
In evaluating TUSK's financial performance, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are crucial metrics. TUSK's ROIC is -21.61%, which is significantly lower than its WACC of 19.41%. This results in a ROIC to WACC ratio of -1.11, indicating that TUSK is not generating enough returns to cover its cost of capital. This is a red flag for investors as it suggests inefficiency in capital utilization.
Comparing TUSK to its peers, KLXE has a ROIC of -11.77% and a WACC of 10.91%, resulting in a ROIC to WACC ratio of -1.08. Although KLXE is also underperforming, its ratio is slightly better than TUSK's. On the other hand, WTTR shows a positive ROIC of 3.07% against a WACC of 9.05%, with a ROIC to WACC ratio of 0.34, indicating better capital efficiency compared to TUSK.
Among the peers, NCSM stands out with a ROIC of 6.40% and a WACC of 6.65%, resulting in a ROIC to WACC ratio of 0.96. This suggests that NCSM is almost covering its cost of capital, making it the most efficient in capital utilization among the companies listed. This performance highlights NCSM as a potentially more attractive investment option for those seeking better capital efficiency.
In contrast, PUMP has a ROIC of -16.02% and a WACC of 7.79%, leading to a ROIC to WACC ratio of -2.05, which is worse than TUSK's. This comparison shows that while TUSK is underperforming, it is not the least efficient among its peers. However, investors might still prefer companies like NCSM, which demonstrate a positive ROIC to WACC ratio, indicating more effective capital utilization.
