However, this nasty sell-off in the stock market and a pull-back in crude prices has dramatically derailed that momentum. In fact, LBRT has crashed through its IPO opening price of $21.20. That said, it is not all bad news for the stock. Yesterday, shares plummeted down to about $20, but, buyers stepped in and pushed the stock back to close well off its lows.
Analysts Very Bullish on LBRT
And today we have a slew of bullish analyst initiations as the quiet period has expired. Some of the initiations are quite striking, actually. For instance, Goldman Sachs has assigned a Buy and $34 target on it, representing upside of 66% from current prices. Similarly, JP Morgan gave LBRT an Overweight rating with the same $34 target. The fact that two tier one firms are being so aggressive with their price targets is certainly noteworthy.
To round out the initiations, Morgan Stanley went with an Overweight and $27 target; Piper Jaffray an Overweight and $28 target; Wells Fargo an Outperform; and Evercore ISI assigned an Outperform and $30 target. So, clearly, analysts' sentiment on LBRT is decisively on the bullish side. For good reason, in our opinion, as its fundamentals and growth rates are indeed impressive.
Overview & Financials
For some more background, LBRT is an independent provider of hydraulic fracturing services to onshore oil and natural gas E&P companies in North America. It has grown from one hydraulic fracturing fleet in December 2011 to 19 active standard fleets in December 2017. Encouragingly, the company says that demand for its services currently exceeds its capacity. Consequently, it expects to deploy three additional standard fleets, in addition to upgrading four existing fleets to high pressure fleets by 2Q18.
It primarily serves oil and gas E&P companies operating in the Permian Basin, the Eagle Ford Shale, the Denver-Julesberg Basin, the Williston Basin, and the Powder River Basin. Some of its notable customers include Extraction Oil & Gas, SM Energy Company, Continental Resources, Devon Energy, Newfield Exploration, Anadarko Petroleum, and Noble Energy.
Taking a quick look at the financials, LBRT provided preliminary results for 4Q17. For the quarter, it forecasts revenue will be between $445-$448 million, representing an impressive year/year growth rate of 187% at the mid-point. This increase is primarily attributable to the combined effect of an increase in average active rigs deployed and improved pricing for its services.
LBRT also estimates that its net income will be $54-$61 million, up dramatically from 44.4 million in the year ago period. In addition, the company estimates that Adjusted EBITDA will be within a range of $90-$95 million for the three months ended December 31, 2017, as compared to $9.9 million for the same period in 2016.