FLOC

Flowco is a high-margin oilfield production-equipment business (gas lift / vapor recovery) that came public in early 2025 and used the $461.8M of IPO proceeds to slash debt — long-term debt fell 73.6% to $168M, total liabilities dropped 61.5% to $288M, and the 10-K shows $818.7M of debt repaid in the year. That deleveraging plus a 43.6% operating margin and $294M of operating cash flow (+64.1%) against $127M of capex leaves the company generating real free cash, funding a $50M buyback (953,229 shares retired at $15.72, below today's $21.18) and a $0.08 quarterly dividend. ROE is a healthy 18.1% and the balance sheet is now clean. On headline numbers — P/E 17.1, P/S 1.7 — this looks cheap for 32% revenue growth.

But two things temper the bull case. First, the growth is acquisition-driven, not organic: FY2025's jump (revenue $74.5M in FY2023 → $259M FY2024 → $342M FY2025) reflects a full year of FPS and Flogistix from the June 2024 Business Combination versus only ten days/six months in 2024, per the MD&A — so the trailing growth rate overstates the run-rate. Second, the cheapness is partly an optical illusion of the Up-C structure: the $571M market cap and 27.0M share count capture only Flowco Holdings' ~28.4% economic interest in Flowco LLC; the Class B / LLC unitholders (GEC and White Deer affiliates, who control the majority of voting power) hold the rest. On a whole-entity basis (~90M units, ~$168M net debt) EV/EBITDA sits closer to ~7x and EV/EBIT ~14x — fair, not bargain. The Tax Receivable Agreement also routes 85% of certain tax benefits to insiders, a structural drag on Class A holders.