What's Driving Earthstone Energy Inc's Surprising 39% Stock Rally?
Earthstone Energy Inc (NYSE:ESTE), an independent oil and natural gas development and production company, has seen a significant surge in its stock price over the past three months. Despite a 5.53% decrease over the past week, the company's stock has increased by an impressive 39.46% over the past three months. This article will delve into the factors contributing to this remarkable performance and provide an in-depth analysis of the company's financial health and growth prospects.
Unpacking Earthstone Energy's Stock Performance
Earthstone Energy's stock price currently stands at $19.94, with a market capitalization of $2.12 billion. The company's GF Value, a measure of intrinsic value defined by GuruFocus.com, is currently at $20.85. This suggests that the stock is fairly valued. However, three months ago, the GF Value was $22.33, indicating that the stock was significantly undervalued at that time. This undervaluation may have contributed to the subsequent surge in the stock price.
Company Overview: Earthstone Energy Inc
Earthstone Energy Inc operates in the oil and gas industry, focusing on the acquisition, development, exploration, and production of onshore, crude oil and natural gas reserves. The company's operations are primarily conducted in the Midland Basin of West Texas and the Eagle Ford Trend of South Texas. Earthstone Energy's business model and strategic operations have played a crucial role in its impressive stock performance.
Profitability Analysis
Earthstone Energy's Profitability Rank stands at 7 out of 10, indicating a high level of profitability. The company's Operating Margin is 45.11%, which is better than 87.37% of companies in the same industry. Furthermore, the company's ROE, ROA, and ROIC, which measure the company's profitability in relation to its equity, assets, and invested capital respectively, are all higher than the majority of companies in the same industry. Over the past 10 years, the company has been profitable for 6 years, which is better than 59.18% of companies in the same industry.
Growth Prospects
Earthstone Energy's Growth Rank is 7 out of 10, indicating a high level of growth. The company's 3-year and 5-year revenue growth rates per share are both higher than the majority of companies in the same industry. Furthermore, the company's future total revenue growth rate and EPS without NRI growth rate are also higher than the majority of companies in the same industry. These figures suggest that Earthstone Energy has strong growth prospects.
Top Holders of Earthstone Energy Stock
The top three holders of Earthstone Energy's stock are Chuck Royce (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), and Paul Tudor Jones (Trades, Portfolio). Chuck Royce (Trades, Portfolio) holds 845,438 shares, representing 0.8% of the company's stock. First Eagle Investment (Trades, Portfolio) holds 383,029 shares, representing 0.36% of the company's stock. Paul Tudor Jones (Trades, Portfolio) holds 352,647 shares, representing 0.33% of the company's stock.
Competitive Landscape
Earthstone Energy's main competitors in the oil and gas industry include Talos Energy Inc (NYSE:TALO) with a market capitalization of $1.96 billion, Gulfport Energy Corp (NYSE:GPOR) with a market capitalization of $2.3 billion, and Sitio Royalties Corp (NYSE:STR) with a market capitalization of $1.94 billion. Despite the intense competition, Earthstone Energy's strong financial performance and growth prospects position it well in the industry.
Conclusion
In conclusion, Earthstone Energy's impressive stock performance can be attributed to its strong financial health, high profitability, and robust growth prospects. The company's strategic operations in the Midland Basin of West Texas and the Eagle Ford Trend of South Texas have also contributed to its success. Despite the intense competition in the oil and gas industry, Earthstone Energy stands out as a strong performer with promising future prospects.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
