Atlas Energy Solutions Inc. (AESI): A Bull Case Theory

We came across a bullish thesis on Atlas Energy Solutions Inc. (AESI) on Substack by Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on AESI. Atlas Energy Solutions Inc. (AESI)’s share was trading at $13.53 as of April 30^th. AESI’s trailing and forward P/E were 24.60 and 9.80 respectively according to Yahoo Finance.

Atlas Energy Solutions (AESI) represents a unique opportunity to invest in the ongoing shale revolution by owning a critical input: proppant, or sand, used to keep hydraulic fractures open. While rig counts and frac fleets have declined, well laterals and perforation density continue to rise, driving growing demand for sand. AESI, alongside Smart Sand (SND) and the soon-to-be-public Alpine Silica (a ProFrac spin-off), is one of the few public players in this space. AESI stands out due to its strong positioning with in-basin sand production in the Permian, allowing it to avoid the high logistics costs associated with SND’s Northern White sand, which is mined in Wisconsin and Illinois. Although Northern White fetches a premium price, AESI benefits from lower transportation costs and strong customer demand for more accessible proppant, even if quality differences persist. AESI generated $1.1 billion in revenue and $288 million in EBITDA in 2024, with strong 26% EBITDA margins, and is guiding toward a 25% increase in volumes sold for 2025. This growth is expected to be further supported by rising proppant prices.

The company is also innovating aggressively. It recently completed the 42-mile Dune Express conveyor belt—the second largest in North America—which delivers sand directly in the Delaware Basin. AESI is rolling out autonomous trucks and a new multi-trailer system that increases sand delivery per trip from 23.5 to 105 tons, aiming to reduce labor-related costs, which make up the bulk of trucking expenses. Despite these strengths, AESI’s share price has dropped from $24 to $14, partially due to macroeconomic pressures on small caps and a recent acquisition of a power generation business. While such vertical integration might ultimately enhance margins, it risks a “conglomerate discount” from investors wary of scope expansion. This acquisition, although partially financed with stock (causing some dilution), could pay off if the power business achieves high standalone valuations like peers such as Kodiak Gas Services. The founder’s 13% ownership aligns incentives for thoughtful capital allocation, and AESI offers a 7% dividend yield that could support the stock.

While a rerating is uncertain, AESI’s 2025 growth projections alone could lift the stock from $13.69 to $21.81. Even without a multiple expansion, the fundamentals suggest limited downside. Demand for sand continues to rise even as other shale service segments face cyclicality. AESI’s dominance in the Permian Basin, operational efficiency, and innovative logistics infrastructure position it well for future outperformance.

Atlas Energy Solutions Inc. (AESI) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held AESI at the end of the fourth quarter which was 11 in the previous quarter. While we acknowledge the risk and potential of AESI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AESI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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