NCSM - Embedded Expectations Analysis - 2018 05 23
NCS Multistage Holdings, Inc. (NCSM:USA) currently trades below corporate average valuations relative to UAFRS-based (Uniform) Earnings, with an 11.9x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about growth, technology, and expensesSpecifically, management may lack confidence in the sustainability of market share growth in Canada, driven by concerns about the declining rig count in the country, and may have concerns about an extended spring breakup due to historically higher levels of precipitation that could unfavorably impact activity in the second half of the year. Additionally, they may lack confidence in their ability to drive further adoption in the U.S., driven by concerns about their ability to highlight the operational advantages of their pinpoint technology, and may be downplaying concerns about competition driving prices down. Lastly, they may be concerned about increasing SG&A costs, and may lack confidence in the sustainability of adjusted EBITDA as a percentage of total revenue and diluted earnings per share improvements
NCS Multistage Holdings is a holding company. Through its subsidiaries, the company is a provider of products and support services that facilitate the optimization of oil and natural gas well completions and field development strategies. The company's primary offering is its fracturing systems products and services, which enable pinpoint stimulation. In addition to fracturing systems, the company sells products for well construction, including its AirLock casing buoyancy system, liner hanger systems and toe initiation sleeves. The company also provides tracer diagnostics services for well completion and reservoir characterization that utilize downhole chemical and radioactive tracers.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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