Solaris Energy Infrastructure, Inc.

Where It Passes

Where It Falls Short

• Valuation0% pass✗ 28▾

  All 13 investors flag SEI's valuation

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value2.2%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=2.2%, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)

  ✗Dreman< 8x

  Price / Book Value per Share

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation Reasonableness

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=-6.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical Average

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low302% of trailing low ($21.14)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+1.17%; #2935/6340 (top 46.3%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.2000; #4187/6449 (top 64.9%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.1470; #4077/5247 (top 77.7%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-16.68%; #3445/4519 (top 76.2%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-13.58%; #3627/6202 (top 58.5%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Profitability6% pass✓ 11✗ 24▾

  15 of 16 flag SEI's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)2/12 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)7/12 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)6.2%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)21.8% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$30.2M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR488.9%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  ROE5.9%

  ✗Lynch> 15%

  EBIT / Enterprise Value2.2%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=2.2%, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets1.41%

  ✓PiotroskiROA > 0

  ROA Change YoY1.40% -> 1.41% (delta: +0.01%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=9.76%, ROA=1.41%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue13.2%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity5.9%

  ✗Dreman> 12%

  Margin of Safety

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity7.2% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency7/11 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue22.8%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity5.9%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend17.0% (2023) -> 21.8% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin 17.0% -> 21.8%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+1.17%; #2935/6340 (top 46.3%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+5.87%; #2352/5226 (top 45.0%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0207; #1474/5884 (top 25.1%)

  ✓AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Verdicts8% pass✓ 1✗ 11▾

  Split decision: 11 FAIL · 4 NEUTRAL · 1 PASS

  Overall verdict

  ✗GrahamFAIL (2/9)✓BuffettPASS (4/9)✗LynchFAIL (1/7)•GreenblattNot ranked•PiotroskiNEUTRAL (F-Score 6)✗DremanFAIL (3/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (0/6)✗MarksFAIL (2/5)✗AckmanFAIL (3/9)✗TempletonFAIL (3/8)•SleepNEUTRAL (4/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)✗SchlossFAIL (2/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage25% pass✓ 5✗ 10▾

  9 of 12 flag SEI's debt & leverage — Graham, Lynch, Dreman +6 more

  LT Debt vs Net Current AssetsLT Debt $1.7B vs NCA $478.5M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.33, IC: 6.0x

  ✓BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity1.35

  ✗Lynch< 0.33

  Cash - Long-term Debt$-1.3B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change27.21% -> 8.40%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities2.10

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity1.35

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels1.35

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=6.0x, D/EBITDA=0.8x

  ✓MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity1.35

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-1.3462; #3507/4210 (top 83.3%)

  ✗AsnessTop 30% of eligible cross-section
• Growth25% pass✓ 5✗ 8▾

  6 of 8 flag SEI's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR488.9%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 320.5% vs Rev: 73.8%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency7/11 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth6.9%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin 17.0% -> 21.8%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR43.3%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Cash Flow30% pass✓ 4✗ 8▾

  7 of 10 flag SEI's cash flow — Lynch, Dreman, Pabrai +4 more

  Free Cash Flow Proxy$30.2M

  ✓BuffettPositive and growing

  FCF Positive and Growing$-1.1B

  ✗LynchPositive and growing

  Operating Cash Flow$209.1M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=9.76%, ROA=1.41%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=-6.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive3/11 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency11/11 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-1.1B

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-16.68%; #3445/4519 (top 76.2%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Efficiency50% pass✓ 6✗ 5▾

  4 of 8 pass — Greenblatt, Piotroski, Munger +1 more object

  Current Ratio2.10

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)13.3%

  ✓Buffett> 10%

  ROIC - WACC+3.3%

  ✓BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)

  ✗Greenblatt> 25%

  Current Ratio Change YoY3.83 -> 2.96

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.28x -> 0.29x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities2.10

  ✓Dreman> 1.5

  Return on Invested Capital5.7%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=16.5%; FY2024: ROIC=6.2%; FY2025: ROIC=14.3%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC3.5% (RR=61% x ROIC=5.7%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)3/5 years above 12% (latest 14.3%)

  ✓SleepROIC > 12% in a majority of years