Smart Sand, Inc. (SND): A Bull Case Theory

We came across a bullish thesis on Smart Sand, Inc. (SND) on Substack by Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on SND. Smart Sand, Inc. (SND)’s share was trading at $2.10 as of April 30^th. SND’s trailing P/E was 26.19 according to Yahoo Finance.

Oil and gas workers operating high horsepower pumps on a hydraulic fracturing site.

Smart Sand (SND) is a publicly traded producer of high-quality Northern White proppant, a specialized sand used in hydraulic fracturing to extract oil and gas from shale formations. With mining operations based in Wisconsin and Illinois, SND supplies premium sand to major shale basins across the U.S., playing a critical role in the energy production supply chain. While in-basin competitors like AESI and Alpine Silica benefit from lower transportation costs, SND’s sand quality allows it to maintain a stable customer base despite the logistical disadvantage. In 2024, SND reported $311 million in revenue and $38.8 million in adjusted EBITDA, reflecting a 12.4% margin. The company trades at just 0.3x revenue and 3.3x EV/EBITDA—less than half the valuation of AESI—offering significant potential for rerating. Although a brief sand price spike in 2022 didn’t meaningfully impact earnings, the long-term trend is more promising: prices have risen steadily from $11.50/ton in 2020 to $22/ton in 2024, driven by the increasing length and complexity of well laterals. In 2024 alone, SND’s sand volumes grew 17% year-over-year, suggesting sustained demand for its premium product even as in-basin volumes surge. Founder and CEO Charles E. Young owns 18% of the company, underscoring strong insider alignment. In addition, SND initiated a special dividend in late 2024 and launched a $10 million share buyback program—material for a company with a $91 million market cap. While the cyclical nature of oilfield services remains a factor, demand for sand continues to grow, particularly in the Permian basin, where SND’s peers also operate. If revenues continue to rise, a rerating occurs, and buybacks reduce the share count, SND’s stock could rise from its current $2.12 to as high as $8.88 by 2027, offering a compelling opportunity for small-cap value investors with a tolerance for cyclicality.

Smart Sand, Inc. (SND) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 9 hedge fund portfolios held SND at the end of the fourth quarter which was 7 in the previous quarter. While we acknowledge the risk and potential of SND 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 SND 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.