Investors and analysts are weighing Kodiak Gas Services’ growth prospects after the company announced a power-supply deal in September. The agreement runs for six years. It will supply 76 megawatts of power to a West Texas data center.
The deal supports Kodiak’s strategy to expand its power-generation portfolio. The company is targeting 2 gigawatts of capacity by 2030.
Analysts are factoring the agreement into their forecasts. Some project revenue of $2.1 billion by 2029. They also project earnings of $447.2 million by 2029. One analysis sees potential upside of 57% to the current share price if sentiment improves, while other outlooks are more cautious.
Analysts have highlighted the capital intensity of Kodiak’s growth strategy as a risk. Another concern is a recent shelf registration for approximately $127.1 million of common stock.