NCS Multistage (NCSM) Soars 10.3%: Is Further Upside Left in the Stock?

NCS Multistage (NCSM) shares rallied 10.3% in the last trading session to close at $51.4. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 42.4% gain over the past four weeks.

NCS Multistage’s shares rallied on the last trading day. The bullishness could be attributed to the company’s acquisition of ResMetrics, a profitable tracer diagnostics firm with more than 30% EBITDA margins. The deal is expected to add $4-5 million in revenues this year. The acquisition expands NCS’s footprint in the United States and the Middle East, and enhances its portfolio of advanced reservoir diagnostics, positioning the company for sustained growth.

This company is expected to post quarterly earnings of $1.17 per share in its upcoming report, which represents a year-over-year change of -22%. Revenues are expected to be $46.1 million, up 4.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For NCS Multistage, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NCSM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

NCS Multistage is part of the Zacks Oil and Gas - Field Services industry. Ranger Energy (RNGR), another stock in the same industry, closed the last trading session 2.4% higher at $13.78. RNGR has returned 4.1% in the past month.

Ranger Energy's consensus EPS estimate for the upcoming report has changed +46.2% over the past month to $0.38. Compared to the company's year-ago EPS, this represents a change of -2.6%. Ranger Energy currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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