NexTier Oilfield Solutions Inc. (NYSE:NEX) shareholders might be concerned after seeing the share price drop 28% in the last quarter. On the other hand, over the last twelve months the stock has delivered rather impressive returns. During that period, the share price soared a full 105%. So it is important to view the recent reduction in price through that lense. The real question is whether the business is trending in the right direction.
While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
See our latest analysis for NexTier Oilfield Solutions
Because NexTier Oilfield Solutions made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last year NexTier Oilfield Solutions saw its revenue grow by 128%. That's a head and shoulders above most loss-making companies. Meanwhile, the market has paid attention, sending the share price soaring 105% in response. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
NexTier Oilfield Solutions is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for NexTier Oilfield Solutions in this interactive graph of future profit estimates.
A Different Perspective
We're pleased to report that NexTier Oilfield Solutions shareholders have received a total shareholder return of 105% over one year. Notably the five-year annualised TSR loss of 8% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand NexTier Oilfield Solutions better, we need to consider many other factors. For instance, we've identified 2 warning signs for NexTier Oilfield Solutions that you should be aware of.