Stonegate Capital Partners has initiated coverage on Nine Energy Services, Inc. (NYSEAM: NINE), focusing on the company's emergence from Chapter 11 bankruptcy and its financial reset. In a research note released Monday, the firm emphasized that Nine Energy's first-quarter 2026 results marked a pivotal transition, though comparability under generally accepted accounting principles was limited due to fresh-start accounting and the impact of severe weather.
The company reported adjusted EBITDA that was burdened by January and February weather conditions and a $5.5 million non-cash inventory write-down that management did not add back. However, Stonegate noted that the quarter's read-through was positive, as Nine Energy experienced no material customer or vendor losses, and pricing across its technology and service offerings remained mostly unchanged quarter-over-quarter. Service-line pricing was largely stable compared to exit rates in 2025.
According to Stonegate, for an oilfield services company exiting restructuring, stable pricing is a crucial indicator. It suggests that the margin pressure in the first quarter was driven by utilization disruption and timing rather than customer concessions or competitive share loss. The firm sees second-quarter guidance as a cleaner benchmark for the company's post-emergence earnings power, as the first quarter was distorted by fresh-start accounting, weather, and the inventory write-down.
Commercial stability was identified as a critical indicator, with the lack of material customer or vendor losses and stable pricing signaling that the restructuring did not impair Nine Energy's market relevance. Stonegate believes that upside for the company is more tied to normalization and mix rather than a broad activity recovery. Specifically, gas-basin exposure, completion tools, and international growth provide the clearest levers for EBITDA improvement. The full announcement is available at this link.
