Here’s What You Need to Know About Why Liberty Energy Inc.
Liberty Oilfield Services Zacks.com’s most popular stock search is LBRT. Here are some facts to help you understand the stock’s future performance.
Shares of this provider of hydraulic fracturing services have returned +2.7% over the past month versus the Zacks S&P 500 composite’s +1% change. Over this time, the Zacks Oil and Gas – Field Services sector, which Liberty Oilfield Services is part of, has seen 18.7% growth. The key question now is: Where does the stock go in the near future?
Media reports and rumors about significant changes in a company’s prospects can make their stock ‘trending,’ which leads to an immediate price increase. However, there are fundamental facts that will ultimately dominate the decision-making process for buy-and-hold.
Earnings Estimate Revisions
Zacks values the impact of future earnings projections on a company’s earnings. This is because we value it more than any other factor. Because we believe that the fair market value of a stock is determined by the future value of its earnings stream.
The stock’s sell-side analysts are responsible for revising earnings estimates to reflect changes in business trends. The fair value of a stock increases if its earnings estimates rise. An increase in fair value over the current market price will drive investors to buy the stock. This leads to the stock price moving higher. Empirical research has shown a strong correlation between near-term stock price movements and revisions to earnings estimates.
Liberty Oilfield Services will post earnings of $0.71 a share for the current quarter. That is an increase of +336.7% year-overyear. The Zacks Consensus estimate has changed by +0.2% over the past 30 days.
Consensus earnings estimates of $2.04 for current fiscal year indicate a +300% year-over-year increase. Over the past 30 days, this estimate has fluctuated by +1.4%.
The consensus earnings estimate of $3.23 for the next fiscal years indicates an increase of +58% over the report that Liberty Oilfield Services was expected to release a year ago. The estimate has changed by +1.6% in the last month.
Our stock rating tool Zacks Rank has an excellent track record of external audits. This proprietary stock rating tool is a more definitive indicator of a stock’s near term price performance. Zacks Rank effectively harnesses power of earnings estimate revisions. Liberty Oilfield Services is ranked #3 on the Zacks Rank (Hold), based on the magnitude of the recent revision to the consensus estimate.
Below is a chart that shows the evolution of the forward 12-month consensus EPS estimation for the company.
12 Months of EPS
Projectioned Revenue Growth
Although earnings growth is an excellent indicator of a company’s financial health, it is not enough if the business isn’t able grow its revenues. A company can’t increase its earnings for extended periods of time without increasing revenues. It is important to understand a company’s potential revenue growth.
Liberty Oilfield Services’ consensus estimate of $1.19 Billion for the current quarter indicates a +74.7% increase in year-over-year sales. For the next fiscal year, the $4.12 billion and $5.24 trillion estimates indicate a change of +66.7% versus +27.2%.
Last Reported Results and Surprising History
Liberty Oilfield Services reported $1.19 billion revenues in the quarter just ended. This represents an increase of +81.8% over the previous year. The same period saw $0.78 EPS, compared to -$0.22 last year.
The reported revenues are a surprise at +13.4% when compared to the Zacks Consensus estimate of $1.05 trillion. The surprise in EPS was +23.81%.
Liberty Oilfield Services has exceeded consensus EPS estimates three more times in the past four quarters. Over this period, each company beat consensus revenue estimates.
Valuation
An investment decision cannot be efficient if it doesn’t consider the stock’s valuation. It is crucial to assess whether the stock’s current price accurately reflects the intrinsic value and growth prospects of the underlying company.
It is possible to compare the current value of a company to its historical valuation multiples such as price-to earnings (P/E), cost-to–sales (P/S) and cash flow (P/CF) to determine if its stock is fair, overvalued or undervalued. Comparing it to other companies on these parameters can give a good idea of its stock price.
The Zacks Style Scores system organizes stocks into five categories. A is better than B, B is better that C, and so forth. This helps in identifying whether a stock has been overvalued, correctly valued, or temporarily undervalued.
This rating indicates that Liberty Oilfield Services has a grade of A, which means it trades at a lower price than its peers. Click here to view the valuation metrics used to determine this grade.
Conclusion
These facts and other Zacks.com information might help you decide if it is worth paying attention to market buzz surrounding Liberty Oilfield Services. The Zacks Rank #3 of Liberty Oilfield Services suggests it could perform in line to the broader market in near-term.
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Liberty Energy Inc. (LBRT) : Free Stock Analysis Report