Why Earthstone Energy Inc's Stock Skyrocketed 35% in a Quarter
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. The company's stock has gained 10.09% over the past week and a remarkable 35.20% over the past three months. This article will delve into the factors contributing to this impressive performance and provide an in-depth analysis of the company's financial health and growth prospects.
Stock Performance and Valuation
Earthstone Energy's stock price currently stands at $21.3, with a market capitalization of $2.26 billion. The company's GF Value, a measure of intrinsic value defined by GuruFocus.com, is $20.94. This figure is slightly lower than the stock's current price, indicating that the stock is fairly valued. Three months ago, the GF Value was $22.33, suggesting that the stock was significantly undervalued at that time. This undervaluation may have contributed to the stock's subsequent rally.
Company Overview
Earthstone Energy Inc operates in the Oil & Gas industry. The company focuses on the acquisition, development, exploration, and production of onshore, crude oil and natural gas reserves. It is also active in corporate mergers and the acquisition of oil and natural gas properties. The company's reserve portfolio consists of assets in the Midland Basin of West Texas, and the Eagle Ford Trend of South Texas. Its operations are all in the upstream segment of the oil and natural gas industry and are conducted onshore in the United States.
Profitability Analysis
Earthstone Energy's Profitability Rank is 7/10, indicating strong profitability potential. The company's Operating Margin is 45.11%, better than 87.37% of 982 companies in the same industry. Its ROE is 29.03%, ROA is 11.96%, and ROIC is 18.29%, all of which are higher than industry averages. The company has been profitable for 6 out of the past 10 years, outperforming 59.29% of 953 companies.
Growth Prospects
Earthstone Energy's Growth Rank is 7/10, indicating strong growth potential. The company's 3-Year Revenue Growth Rate per Share is 39.30%, and its 5-Year Revenue Growth Rate per Share is 23.90%, both of which are higher than industry averages. The company's future total revenue growth rate estimate is 7.23%, better than 65.64% of 259 companies. Its 3-Year EPS without NRI Growth Rate is 522.70%, outperforming 99.71% of 691 companies.
Major Shareholders
Chuck Royce (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), and Paul Tudor Jones (Trades, Portfolio) are the top three holders of Earthstone Energy Inc's stock. Chuck Royce (Trades, Portfolio) holds 845,438 shares, representing 0.8% of the total shares. First Eagle Investment (Trades, Portfolio) holds 383,029 shares, accounting for 0.36% of the total shares. Paul Tudor Jones (Trades, Portfolio) holds 352,647 shares, representing 0.33% of the total shares.
Competitive Landscape
Earthstone Energy Inc's main competitors include Talos Energy Inc (NYSE:TALO) with a market capitalization of $1.99 billion, Gulfport Energy Corp (NYSE:GPOR) with a market capitalization of $2.34 billion, and Sitio Royalties Corp (NYSE:STR) with a market capitalization of $1.99 billion.
Conclusion
In conclusion, Earthstone Energy Inc's impressive stock performance can be attributed to its strong profitability, robust growth prospects, and strategic operations in the oil and natural gas industry. The company's stock is currently fairly valued, suggesting that it may still offer investment value. However, as with any investment, potential investors should conduct thorough research and consider the company's financial health, growth prospects, and competitive landscape before making an investment decision.
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.
