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Liberty Oilfield Services (LBRT) Down 5.1% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Liberty Oilfield Services (LBRT). Shares have lost about 5.1% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Liberty Oilfield Q2 Loss Wider Than Expected

Liberty Oilfield Services reported second-quarter 2021 loss per share of 29 cents, wider than the Zacks Consensus Estimate of a loss of 12 cents. The underperformance reflects higher operating expenses, which soared to $617.3 million from $161.9 million in the second quarter of 2020.

However, the bottom line compared favorably with the year-ago quarter’s loss of 55 cents due to strong execution and contribution from the onshore hydraulic fracturing business in the United States and Canada that the company acquired from Schlumberger (SLB Quick QuoteSLB - Research Report) in January.

Total revenues came in at $581.3 million, below the Zacks Consensus Estimate of $595 million, but surged from the year-ago level of $88.4 million.

The second-quarter adjusted EBITDA was $36.6 million against the prior-year quarter loss of $8.3 million. Meanwhile, Liberty’s fleet count most likely stayed around the low 30s throughout the quarter.

Balance Sheet & Capital Expenditure

As of Jun 30, Liberty had approximately $30.7 million in cash and cash equivalents. The pressure pumper’s long-term debt of $105.2 million represented a debt-to-capitalization of 7.9%. Further, the company’s liquidity — cash balance, plus revolving credit facility — amounted to $277 million.

In the reported quarter, the company spent $37.7 million on its capital program.

Guidance

Liberty management sees continued economic expansion driving rising energy usage while lack of capital spending in the energy sector would limit supply. At the same time, the company is not immune to macro issues like trucking shortages, completion delays by clients and labor scarcity. Liberty expects its near-term deployed fleet count to stay essentially flat.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -124.93% due to these changes.

VGM Scores

At this time, Liberty Oilfield Services has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Liberty Oilfield Services has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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