Stabilis Solutions
NASDAQ: SLNG
$3.98 ▼ -0.02  (-0.50%)
At close: Jul 10, 2026 · 3:59 PM UTC
Financial Ratios
Market Cap74.76 Mn
P/E-21.63
P/S1.22
Div. Yield0.00
ROIC (Qtr)0.00
Revenue Growth (1y) (Qtr)-40.14
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About

Stabilis Solutions, Inc. provides turnkey clean energy production, storage, transportation and fueling solutions using liquefied natural gas to multiple end markets across North America. The company also builds power and control systems for the energy industry in China through its 40 percent owned joint venture BOMAY Electric Industries, Inc. With over 580 million gallons of LNG delivered through more than 60,000 truck deliveries during its 22 year operating history,…

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Sector: Energy Industry: Oil & Gas Integrated CIK: 0001043186

Investment Thesis

▲ Bull case
  • The company emphasized that commissioning contracts for data center projects are set to begin in the Q2 FY26 and continue through the end of the year providing a clear pathway to offset the revenue decline from the concluded marine contracts. These projects are described as six to twelve month efforts that align with the typical timeline for data center construction and testing phases. Management noted that the pipeline of similar commissioning opportunities is robust with multiple discussions underway across different regions and customers. The ability to convert commissioning work into bridge power arrangements if grid or pipeline connections are delayed adds further durability to the revenue stream. This flexibility means that the company can maintain utilization of its LNG assets even when external infrastructure faces setbacks. Overall the data center vertical is positioned to drive a meaningful recovery in the second half of 2026 and set the stage for stronger performance in 2027.
  • Aerospace demand remains a strong growth driver with customers requiring high purity LNG and reliable delivery for launch operations and supporting technologies. The firm’s multi source LNG model allows it to serve aerospace clients without being constrained by the capacity of its own liquefaction facilities. By combining internal production with third party supply arrangements the company can scale to meet expanding launch schedules and technical specifications. Management highlighted that aerospace represents a long term growth platform supported by the company’s ability to provide fit‑for‑purpose solutions for demanding technical requirements. The ongoing increase in launch activity and the associated LNG consumption creates a recurring revenue base that is less tied to cyclical industrial demand. This segment therefore offers a stable upside that can complement the more project‑based nature of data center and marine work.
  • Although the Galveston LNG project experienced a termination of its original offtake agreement the company remains actively engaged with other potential customers to fill the available capacity. The termination was driven by a requested modification that the original counterparty would not accept not by a fundamental lack of interest in the project. Management expressed confidence that the original counterparty will return to do business once the project advances further or reaches completion. The macro environment around Gulf Coast LNG bunkering is described as amazingly strong reinforcing the need for reliable fit‑for‑purpose supply on the water. The project continues to be viewed as a key component of the long term value creation strategy especially for serving multiyear demand in the Port of Galveston and the broader Gulf Coast marine market. Successful resolution of the offtake situation would unlock a significant scalable asset that could generate durable cash flows for years to come.
  • The company’s multi source LNG supply model provides a structural advantage that lets it pursue larger opportunities in data center aerospace marine and industrial markets without waiting for internal production expansion. This model allows the firm to source LNG from multiple providers combine it with its own logistics storage and regasification assets and deliver a complete end‑to‑end solution. The flexibility inherent in this approach reduces capital intensity and accelerates time to market for new contracts. Advance payments received for the upcoming data center project are already funding the required capital expenditures which are expected to be in the range of ten to twelve million dollars over the coming months. The vessel lease entered in anticipation of the marine bunkering contract is expected to be subchartered in the second quarter with an effective date in the third quarter and is anticipated to be net neutral. These factors together strengthen the balance sheet and provide liquidity to support growth initiatives while maintaining financial discipline.
▼ Bear case
  • The first quarter results showed a sharp decline with revenue down approximately forty% year over year and adjusted EBITDA turning negative seven hundred thousand dollars reflecting the impact of the two large multiyear contracts that ended at the end of 2025. This near term headwind is not merely a seasonal fluctuation but a direct consequence of the loss of significant contracted volume in marine and behind the meter power generation markets. While management points to a recovery later in the year the company remains dependent on the successful ramp up of new commissioning and bridge power contracts to replace that lost revenue. Any delay in the start up of those projects would prolong the period of reduced earnings and strain cash flow. The reliance on advance payments that are restricted to specific projects also limits the flexibility to use those funds for general corporate needs. Consequently the near term outlook remains vulnerable to execution risks in the emerging data center vertical.
  • The Galveston LNG project faces uncertainty around financing and offtake despite the company’s continued commitment to its development. The termination of the original offtake agreement was triggered by a requested modification that the counterparty would not accept raising questions about the ease of securing project financing under the current terms. Although the company is in active discussions with other potential customers there is no guarantee that a new offtake will be obtained on comparable terms or within a timely manner. The need to renegotiate or replace the offtake could push back the final investment decision and extend the construction timeline. Any further delay would postpone the anticipated cash inflows from the project and increase carrying costs during the extended development period. This uncertainty represents a material risk to the long term growth narrative that hinges on the Galveston asset.
  • The vessel lease entered in 2025 to support the marine bunkering contract continues to generate costs that are excluded from adjusted EBITDA as an extraordinary item. Management expects to subcharter the vessel in the second quarter with an effective date in the third quarter but acknowledges that the Iran war has disrupted rechartering activity and created delays. Until a subcharter agreement is finalized the company will bear the lease expense which could pressure operating results if the subcharter terms are less favorable than anticipated. Even if the subcharter ends up net neutral the timing of the arrangement means that the cost burden will persist for several months affecting quarterly profitability. Furthermore the success of the subcharter is contingent on market conditions for vessel availability and pricing which are outside the company’s direct control. This exposure adds a layer of volatility to the cost structure that investors should consider.
  • Revenue growth beyond the near term depends heavily on the company’s ability to convert its pipeline of data center commissioning opportunities into sustained bridge power or long term behind the meter contracts. Management admitted that the longer term bridge solution is less attractive to clients compared to shorter commissioning work which could limit the duration and size of future contracts. If the market continues to favor short term commissioning engagements the company may face a cycle of constantly seeking new projects rather than building recurring revenue streams. Additionally the firm’s reliance on third party LNG supply for many of its growth initiatives introduces counterparty risk and potential margin pressure if supply costs rise or availability tightens. The George West liquefaction facility is not expected to return to full utilization in the near term meaning the company will remain dependent on external sources to meet incremental demand. These factors collectively create challenges to achieving scalable profitable growth over the medium to long term.

Product and Service Breakdown of Revenue (2025)

Peer Comparison

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S.No. Ticker Company Market CapP/EP/STotal Debt (Qtr)
1 XOM Exxon Mobil Corp 6,326.01 Bn0.00 Bn0.00 Mn-
2 PBR Petrobras - Petroleo Brasileiro Sa 3,284.86 Bn0.00 Bn0.00 Mn95.45 Bn
3 BP Bp Plc 558.99 Bn0.00 Bn0.00 Mn59.82 Bn
4 TTE TotalEnergies SE 523.98 Bn-0.21 Bn2.61 Mn0.00 Bn
5 CVX Chevron Corp 328.11 Bn0.00 Bn0.00 Mn5.83 Bn
6 EQNR Equinor Asa 77.88 Bn2.60 Bn0.00 Mn22.16 Bn
7 NFG National Fuel Gas Co 7.37 Bn0.00 Bn0.00 Mn2.38 Bn
8 DEC Diversified Energy Co 1.02 Bn0.00 Bn0.00 Mn2.89 Bn