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Why Is Liberty Oilfield Services (LBRT) Down 15.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for Liberty Oilfield Services (LBRT - Free Report) . Shares have lost about 15.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Liberty Oilfield Services due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Liberty Oilfield Q1 Loss Narrower Than Expected
Liberty Oilfield Services posted first-quarter loss per share of 3 cents, 81.3% narrower than the Zacks Consensus Estimate and far improved from the year-ago loss of 21 cents.
The outperformance reflects the impact of strong execution, higher activity and increased service pricing, which more than offset rising costs.
Total revenues came in at $792.8 million, ahead of the Zacks Consensus Estimate of $743 million and 43.6% above the year-ago level of $552 million.
Meanwhile, first-quarter adjusted EBITDA was $91.8 million against the prior-year quarter figure of $31.7 million.
LBRT further announced that it is rebranding as Liberty Energy. The company said the new name is intended to reflect its transition to an all-round provider of well-completion services.
Balance Sheet & Capital Expenditure
As of Mar 31, Liberty had approximately $32.9 million in cash and cash equivalents. The pressure pumper’s long-term debt of $211.2 million represented a debt-to-capitalization of 14.6%. Further, the company’s liquidity — cash balance, plus revolving credit facility — amounted to $222 million.
In the reported quarter, the company spent $90.1 million on its capital program.
Guidance
The Ukraine conflict and sweeping international curbs on Moscow have aggravated the oil supply shortage. This means upstream operators are drilling more wells to increase output that has remained depressed over the past two years due to lack of investment, supply chain issues, scarcity of labor and equipment attrition. In this context, Liberty management sees strong commodity prices driving frac service usage through the remainder of 2022. With crude demand set to keep increasing and eventually surpass pre-covid record, most of the domestic fracking capacity is on the verge of being exhausted. In the second quarter, the company sees some 10% sequential revenue growth, plus higher margins on improved activity and pricing. However, cost inflation might dent some of that.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 660% due to these changes.
VGM Scores
At this time, Liberty Oilfield Services has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Liberty Oilfield Services has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Liberty Oilfield Services (LBRT) Down 15.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Liberty Oilfield Services (LBRT - Free Report) . Shares have lost about 15.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Liberty Oilfield Services due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Liberty Oilfield Q1 Loss Narrower Than Expected
Liberty Oilfield Services posted first-quarter loss per share of 3 cents, 81.3% narrower than the Zacks Consensus Estimate and far improved from the year-ago loss of 21 cents.
The outperformance reflects the impact of strong execution, higher activity and increased service pricing, which more than offset rising costs.
Total revenues came in at $792.8 million, ahead of the Zacks Consensus Estimate of $743 million and 43.6% above the year-ago level of $552 million.
Meanwhile, first-quarter adjusted EBITDA was $91.8 million against the prior-year quarter figure of $31.7 million.
LBRT further announced that it is rebranding as Liberty Energy. The company said the new name is intended to reflect its transition to an all-round provider of well-completion services.
Balance Sheet & Capital Expenditure
As of Mar 31, Liberty had approximately $32.9 million in cash and cash equivalents. The pressure pumper’s long-term debt of $211.2 million represented a debt-to-capitalization of 14.6%. Further, the company’s liquidity — cash balance, plus revolving credit facility — amounted to $222 million.
In the reported quarter, the company spent $90.1 million on its capital program.
Guidance
The Ukraine conflict and sweeping international curbs on Moscow have aggravated the oil supply shortage. This means upstream operators are drilling more wells to increase output that has remained depressed over the past two years due to lack of investment, supply chain issues, scarcity of labor and equipment attrition. In this context, Liberty management sees strong commodity prices driving frac service usage through the remainder of 2022. With crude demand set to keep increasing and eventually surpass pre-covid record, most of the domestic fracking capacity is on the verge of being exhausted. In the second quarter, the company sees some 10% sequential revenue growth, plus higher margins on improved activity and pricing. However, cost inflation might dent some of that.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 660% due to these changes.
VGM Scores
At this time, Liberty Oilfield Services has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Liberty Oilfield Services has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.