OYO Geospace Corp.

Company Description

OYO Geospace Corp. designs and manufactures instruments and equipment used by energy services companies in exploration and monitoring activities. The company was founded 1980 and has a market cap of $636 million.

Higher energy prices have energy companies spending more money, a dynamic that lifted OYO to excellent Q1 results on Feb 1 that handily beat expectations.

First-Quarter Results

Revenue for the period was up 65% from last year to $43 million. Earnings were also strong, coming in at $1.30, 24% ahead of the Zacks Consensus Estimate, where the company now has an average earnings surprise of 42% over the last four quarters.

The company noted that the good quarter was driven by a surge in demand for its GSR wireless acquisition system, delivering 29,000 channels during the quarter and increasing its numbers of channels sold, rented or available for rent to 60,000.

Looking forward, OYO was optimistic on its near-term outlook, saying it sees continued strong demand to purchase and rent its GSR units.

Financial Profile

The good quarter also enabled OYO to strengthen its balance sheet, with cash and equivalents up $24 million from last year to $33 million against total debt of just $7.7 million.

Estimates

The analyst agree with the optimistic outlook, with the current year up 71 cents in the last 2 months to $3.60. The next-year estimate is pegged at $4.89, a bullish 36% growth projection.

Valuation

In light of the recent gains, OYO trades at a premium to its peers with a forward P/E of 27X.

6-Month Chart

On the chart, OYO just hit a new multi-year high at $104.87 after jumping on the good quarter. The MACD below the chart is confirming the breakout, with the short-term moving average advancing ahead of the long-term average. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.