Solaris Energy Infrastructure, Inc. (NYSE:SEI) saw its stock price plummet 5.66% in after-hours trading on Monday, as investors reacted to reports of weak earnings and alarming financial metrics. The sharp decline comes after a detailed analysis revealed several red flags in the company's financial performance.

According to recent reports, SEI's earnings quality has come under intense scrutiny. While the company reported a profit of US$15.8 million for the year ending March 2025, it alarmingly burned through US$261 million in cash during the same period. This significant discrepancy between reported profits and free cash flow has raised serious concerns among analysts and investors. Adding to the worries, SEI's high accrual ratio of 0.42 suggests poor future profitability prospects.

Further compounding the issue, SEI has been actively diluting shareholder value by issuing 53% more new shares over the last year. This dilution has led to a 25% decline in earnings per share, despite the company's reported net income growth. The combination of weak cash generation, high accruals, and substantial share dilution paints a troubling picture of SEI's financial health, prompting today's after-hours sell-off as investors reassess the company's long-term prospects.