Liberty Energy Inc (LBRT, Financial), a leading oilfield services company, has seen a significant surge in its stock price over the past three months. The company's stock price has risen by 42.60%, from a modestly undervalued position to its current price of $18.61. This impressive performance has been driven by a combination of strong profitability, strategic acquisitions, and positive market sentiment. Let's delve deeper into the factors contributing to Liberty Energy's recent success.
Stock Performance and Valuation
Liberty Energy's stock has been on a steady upward trajectory, gaining 3.56% over the past week and a whopping 42.60% over the past three months. The company's market cap now stands at $3.17 billion. According to the GF Value, a measure defined by GuruFocus.com that calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates, Liberty Energy is currently modestly undervalued with a GF Value of $23.66. This is a significant improvement from three months ago when the stock was significantly undervalued with a GF Value of $22.77.
Company Overview
Liberty Energy Inc operates in the oil and gas industry, providing hydraulic fracturing services in major basins throughout North America. The company's 2020 acquisition of Schlumberger's OneStim business segment has positioned Liberty as one of the largest pressure pumpers in North America, adding wireline operations, two Permian frac sand mines, and an expanded technological portfolio to its business.
Profitability Analysis
Liberty Energy's profitability has been a key driver of its recent stock performance. The company's Profitability Rank stands at 5/10, indicating average profitability. However, its operating margin of 16.59% is better than 63.01% of companies in the industry. Furthermore, the company's ROE, ROA, and ROIC, which stand at 41.06%, 23.44%, and 35.81% respectively, are all higher than the majority of companies in the industry. Over the past 10 years, the company's profitability has been better than 33.12% of companies.
Growth Prospects
Despite a Growth Rank of 3/10, indicating below-average growth, Liberty Energy has shown promising signs. The company's 3-year and 5-year revenue growth rates per share are better than 39.44% and 27.38% of companies, respectively. Moreover, the company's future revenue growth rate is expected to be 3.49% over the next 3 to 5 years. The company's 3-year EPS growth rate is also impressive, better than 80.03% of companies.
Major Stock Holders
Liberty Energy's stock is held by several prominent investors. Jim Simons (Trades, Portfolio) is the largest holder with 1,625,100 shares, representing 0.95% of the company's stock. HOTCHKIS & WILEY and First Eagle Investment (Trades, Portfolio) hold 519,070 and 208,411 shares, respectively, representing 0.3% and 0.12% of the company's stock.
Competitive Landscape
Liberty Energy operates in a competitive industry with major players such as NexTier Oilfield Solutions Inc (NEX, Financial) with a market cap of $2.42 billion, Weatherford International PLC (WFRD, Financial) with a market cap of $6.76 billion, and TechnipFMC PLC (FTI, Financial) with a market cap of $9.25 billion.
Conclusion
In conclusion, Liberty Energy's impressive stock performance can be attributed to its strong profitability, strategic acquisitions, and positive market sentiment. Despite facing stiff competition, the company's growth prospects and profitability metrics suggest that it is well-positioned for future success. Investors should keep a close eye on this stock as it continues to make waves in the oil and gas industry.
