A month has gone by since the last earnings report for ProPetro Holding (PUMP Quick QuotePUMP - Free Report) . Shares have added about 50.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is ProPetro due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

ProPetro's Q3 Loss Wider Than Expected

ProPetro Holding reported third-quarter adjusted net loss of 29 cents per share, wider than the Zacks Consensus Estimate of 25 cents per share. The bottom line also compared unfavorably with the year-ago quarter’s earnings of 33 cents. The underperformance reflects lower year-over-year activity levels and pricing.

Meanwhile, quarterly revenues of $133.71 million missed the Zacks Consensus Estimate of $137 and declined more than 75% from the year-ago quarter’s levels.

The oilfield service provider’s pressure pumping revenues of $131.3 million missed the Zacks Consensus mark of $135 million and declined 80% year over year. Adjusted EBITDA in the third quarter amounted to $17.4 million, down from $131.9 million in the year-ago quarter.

On a positive note, ProPetro’s adjusted EBITDA of $26.7 million for its Pressure Pumping unit in the September-end quarter beat the Zacks Consensus Estimate of $17.6 million. Investors should know that pressure pumping is the main contributor to the company’s earnings. The upside was the outcome of the company’s effective performance and productive cost management.

Pressure Pumping Division

The Midland, TX-based company provides hydraulic fracturing, cementing and acidizing functions through the Pressure Pumping segment. The business contributed 98.2% to the company's total revenues in the quarter under review. Service revenues plunged 75.3% from the prior-year quarter’s levels to $133.7 million due to significant fall in the number of hydraulic fracturing fleets.

Costs & Expenses

ProPetro reported service cost of $99.6 million in the third quarter, down 74.9% from the year-ago quarter’s levels. General and administrative expenses came in at $21.8 million, down 20.8% from $27.6 million in the prior-year quarter.

Balance Sheet & Capital Expenditures

As of Sep 30, ProPetro had cash and cash equivalents worth $54.3 million and did not incur any long-term debt. ProPetro also has $31.6 million under its revolving credit facility. Capital expenditures for the September-end quarter summed $7.9 million, down 90.9% from the level in third-quarter 2019.

Guidance

ProPetro’s outlook continues to remain ambiguous for the remaining year as the North American oil field is yet to revitalize its activities to produce a competitive return.

However, the company is optimistic about sustaining strong customer relationships, a debt-free balance sheet and deep bench of committed talent.




 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

At this time, ProPetro has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise ProPetro has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.