Smart Sand, Inc.'s (NASDAQ:SND) Stock is Soaring But Financials Seem Inconsistent: Will The Uptrend Continue?

Simply Wall St

Thu, February 12, 2026 at 3:17 AM GMT+9 3 min read

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SND

+5.30%

Smart Sand’s (NASDAQ:SND) stock is up by a considerable 108% over the past three months. However, we wonder if the company’s inconsistent financials would have any adverse impact on the current share price momentum. Specifically, we decided to study Smart Sand’s ROE in this article.

ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.

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How Do You Calculate Return On Equity?

The formula for return on equity is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity

So, based on the above formula, the ROE for Smart Sand is:

1.6% = US$3.9m ÷ US$240m (Based on the trailing twelve months to September 2025).

The ‘return’ is the yearly profit. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.02 in profit.

Check out our latest analysis for Smart Sand

Why Is ROE Important For Earnings Growth?

So far, we’ve learned that ROE is a measure of a company’s profitability. We now need to evaluate how much profit the company reinvests or “retains” for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.

Smart Sand’s Earnings Growth And 1.6% ROE

It is hard to argue that Smart Sand’s ROE is much good in and of itself. Even when compared to the industry average of 8.0%, the ROE figure is pretty disappointing. For this reason, Smart Sand’s five year net income decline of 8.5% is not surprising given its lower ROE. However, there could also be other factors causing the earnings to decline. For instance, the company has a very high payout ratio, or is faced with competitive pressures.

However, when we compared Smart Sand’s growth with the industry we found that while the company’s earnings have been shrinking, the industry has seen an earnings growth of 50% in the same period. This is quite worrisome.

NasdaqGS:SND Past Earnings Growth February 11th 2026

Earnings growth is a huge factor in stock valuation. It’s important for an investor to know whether the market has priced in the company’s expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. If you’re wondering about Smart Sand’s’s valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry.

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Is Smart Sand Using Its Retained Earnings Effectively?

Summary

On the whole, we feel that the performance shown by Smart Sand can be open to many interpretations. Even though it appears to be retaining most of its profits, given the low ROE, investors may not be benefitting from all that reinvestment after all. The low earnings growth suggests our theory correct. Wrapping up, we would proceed with caution with this company and one way of doing that would be to look at the risk profile of the business. To know the 3 risks we have identified for Smart Sand visit our risks dashboard for free.

Have feedback on this article? Concerned about the content? Get in touch** with us directly.**_ Alternatively, email editorial-team (at) simplywallst.com._

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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