Liberty Energy stock price has had a relatively mixed performance in 2021 as oil and gas prices surged. After soaring to the year-to-date high of $20 in April, the stock has retreated by about 32%, giving it a market cap of over $2.8 billion.
A turnaround story
Liberty Energy is a large company that operates in key oil basins in the United States. It is one of the top fracking pioneers that provides its services and equipment to companies like PDC Energy, Conoco-Philips, Parsley Energy, and WPX Energy among others. The company’s products include high-pressure pumps, engines, transmissions, and radiators.
It competes with giants like Halliburton, Universal Pressure Pumping, and Calfrac Well Services among others. Liberty Energy’s role in America’s energy sector is important as demand for oil and gas soars.
Liberty Energy has had a strong performance recently. After dipping to $965 million in 2020, the company’s revenue bounced back to over $2.4 billion in 2021 as crude oil and gas prices rebounded. In the most recent quarter, the company’s revenue jumped to $943 million, a 19% increase from the first quarter. Its net income after tax rose to $105 million while diluted income per share rose to 55 cents.
Liberty Energy also boosted its revenue guidance for the third quarter. The company expects that its revenue will rise by 18% in Q3 as it continues to reactivate its fleets. At the same time, the firm boosted its capital expenditure as it invests in technology.
Oil prices have pulled back from their highest levels this year as worries of a recession remain. However, demand for American oil and gas is at a record high as Europe decouples from Russia. These events will likely continue supporting companies like Liberty Energy and Halliburton. At the same time, the company recently announced plans to start its capital returns to investors by buying back shares worth over $250 million.
Liberty Energy stock price forecast
The daily chart shows that the LBRT stock price surged to a high of $20 earlier this year. It then formed a double-top pattern whose neckline was at $13.6. In price action analysis, this pattern is usually a bearish sign. The stock has moved slightly below the 25-day and 50-day exponential moving averages (EMA).
It has also formed a symmetrical triangle pattern that is shown in black. Now, with the gap between the upper and lower lines of the triangle being still wide, there is a likelihood that the stock will remain in a consolidation phase in the near term.
This consolidation could see it retest the important psychological level at $12 since it has formed a mid-cycle small head and shoulders pattern.