Tetra Technologies (TTI) is a Zacks Rank #1 (Strong Buy) that sits on the smaller side of the oil games with a market cap of just $500 million. The stock has seen a dramatic decline over the past few weeks, but earnings estimates are still quite high. Let’s explore more about this stock in this Bull Of The Day article.

The description

TETRA Technologies, Inc., together with its subsidiaries, operates as a diversified oil and gas services company. It operates through the Fluids and Completions and Water and Reflux Services segments. The Completion Fluids & Products segment manufactures and markets clear brines, additives and related products and services for the oil and gas industry. The company was incorporated in 1981 and is headquartered in The Woodlands, Texas.

Most Recent Earnings Report

I see the most recent earnings report was a huge beat. The company posted EPS of $0.06 as Wall Street sought $0.00. This difference of 6 cents translates into a positive earnings surprise of 600%.

Following the report, analysts covering the stock maintained their earnings estimates for the next quarter. The following quarter saw an increase, but the full year numbers moved the most.

Earnings history

When I look at a stock, the first thing I do is see if the company beats the number. This tells me right away what the market expectations were for the company and how management communicated with the market. A constantly beating stock has a direction communicating to Wall Street expectations that can be met. This is what you want to see.

For TTI, I see two beats, a meet and a lack of the Zacks consensus estimate. It’s always good to see, but that alone isn’t enough to make the company a Zacks #1 ranking (Strong Buy).

The average positive earnings surprise over the past year is 30%.

Revisions to earnings estimates

The Zacks ranking tells us which stocks are seeing their earnings estimates rise. For AVT, I see yearly estimates increasing.

In the past 60 days, I see some increases.

Full year 2022 fell from $0.11 to $0.20.

Next year also rose from $0.28 to $0.30.

A positive move in earnings estimates like this is why this stock is a Zacks Rank #1 (Strong Buy).

Evaluation

TTI’s valuation is a little steep, but given that Jamie Dimon and a slew of others are seeing oil prices rise much higher, it’s probably a good name to get exposure to. The forward multiple is 20x, which is a lot, but so is the 68% revenue growth the company reported in the latest earnings report. The price to book is 4.8x and also a bit high. The price at the multiple of sales is 1.2x.

Zacks names ‘only one best choice for doubling up’

From thousands of stocks, 5 Zacks experts have each picked their favorite to skyrocket by +100% or more in the coming months. Of these 5, Research Director Sheraz Mian selects one to have the most explosive advantage of all.

It’s a little-known chemical company that’s up 65% year-on-year, but still very cheap. With relentless demand, rising earnings estimates for 2022 and $1.5 billion for stock buybacks, retail investors could step in at any time.

This company could rival or surpass other recent Zacks stocks which are expected to double, such as Boston Beer Company which jumped +143.0% in just over 9 months and NVIDIA which jumped +175.9% in one. year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.