A month has gone by since the last earnings report for ProPetro Holding (PUMP Quick QuotePUMP - Free Report) . Shares have lost about 15.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is ProPetro due for a breakout? 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 catalysts.

ProPetro Incurs Wider-Than-Expected Q3 Loss, Revenues Beat

ProPetro reported third-quarter adjusted net loss of 5 cents per share, wider than the Zacks Consensus Estimate of a loss of 3 cents. This underperformance was due to escalated service costs.

However, the bottom line narrowed from the year-ago quarter’s loss of 29 cents per share, attributable to better-than-expected revenue contribution from the Pressure Pumping unit. The segment reported revenues of $245.6 million, outpacing the consensus mark of $225 million.

Quarterly revenues of $250.1 million outpaced the Zacks Consensus Estimate of $227 million and increased from the year-ago quarter’s $133.71 million.

This oilfield service provider’s adjusted EBITDA in the third quarter amounted to $42 million, up from $17.4 million in the year-ago quarter. Greater activity, better pricing and increased profitability drove the Adjusted EBITDA.

ProPetro’s adjusted EBITDA of $53.98 million in its Pressure Pumping unit during the September quarter surpassed the Zacks Consensus Estimate of $51 million. Investors should know that pressure pumping is the main contributor to PUMP’s earnings.

Pressure Pumping Division

The Midland, TX-based PUMP provides hydraulic fracturing, cementing and acidizing functions through the Pressure Pumping segment. The business contributed 98.2% to ProPetro's total revenues in the quarter under review. Service revenues soared 87.1% from the prior-year quarter’s levels to $245.6 million, attributable to higher fleet strength and enhanced pricing.

Costs & Expenses

ProPetro reported service cost of $188.7 million for the third quarter, up 89.5% from the year-ago quarter’s level. General and administrative expenses were $21.35 million, down 2.1% from $21.82 million in the prior-year quarter.

Balance Sheet & Capital Expenditures

As of Sep 30, 2021, ProPetro had cash and cash equivalents worth $84.6 million and did not incur any long-term debt. It also had $69 million under its revolving credit facility. Capital expenditures in the September quarter of 2021 summed $53 million, up 571% from the third-quarter 2020 level.

Guidance

ProPetro expects full-year capital expenditures in the $155-$165 million range, based on its current and expected activity levels. It allocated approximately $30 million to its Tier IV DGB dual-fuel equipment investment of 90,000 HHP, while the rest constitutes maintenance spending, mainly.

ProPetro expects pressure pumping fundamentals to improve further as the year goes into 2022. PUMP is well equipped to respond to the slight rise in business that it anticipates in the coming months. PUMP's primary goal is to maintain capital discipline and be the most efficient frac supplier in the Permian Basin.




 

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month. The consensus estimate has shifted 51.72% due to these changes.

VGM Scores

Currently, ProPetro has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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

ProPetro has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.