TP of $38 reflects a blend of two methodologies: 1) a 7x EBITDA multiple on the EBITDA potential at the currently planned 1.7GW and 3.5x our forecast of logistics EBITDA (inclusive of another 500MW of growth), and 2) updated DCF reflecting a $34 fair value. We then blend the two approaches at a 2/3rd weight applied to the multiples-based valuation and 1/3rd weight to our DCF to yield our new $38 target price as we believe investors would also apply greater weight to multiples vs a DCF approach. 

We have a High Risk rating for Solaris due to its high sensitivity to both AI-related sentiment and oil prices.

Key risks for SEI include a faster-than-anticipated expansion of new utility scale power plants, a sharp downshift in the rate of power demand growth, rising competition eroding potential returns on future contracts, material delivery delays for its new equipment, or a material erosion in earnings power for their base business.