Core Viewpoint - Forum Energy Technologies (FET) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][4]. Earnings Estimates - The Zacks Consensus Estimate for Forum Energy for the fiscal year ending December 2025 is projected at $2 per share, reflecting a substantial increase of 332.6% from the previous year's reported figure [9]. - Over the past three months, the Zacks Consensus Estimate for Forum Energy has risen by 17.6%, indicating a trend of increasing earnings expectations [9]. Zacks Rating System - The Zacks rating system is based solely on changes in a company's earnings picture, which is a critical factor in determining stock price movements [2][3]. - The system classifies stocks into five groups, with only the top 5% receiving a Zacks Rank 1 (Strong Buy) rating, highlighting their superior earnings estimate revisions [10][11]. - Historically, Zacks Rank 1 stocks have generated an average annual return of +25% since 1988, showcasing the effectiveness of the rating system [8]. Market Implications - The upgrade to Zacks Rank 1 for Forum Energy suggests an improvement in the company's underlying business, which is expected to lead to increased buying pressure and a rise in stock price [6][4]. - The correlation between earnings estimate revisions and near-term stock movements indicates that tracking these revisions can be beneficial for investment decisions [7].

Core Insights - Three stocks with strong value characteristics and a buy rank are highlighted for investors to consider on March 31st Group 1: Kingstone Companies, Inc. (KINS) - Kingstone is a property and casualty insurance company with a Zacks Rank of 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 22.6% over the last 60 days [1] - The company has a price-to-earnings ratio (P/E) of 8.94, significantly lower than the S&P 500's P/E of 20.18 [1] - Kingstone possesses a Value Score of A [1] Group 2: Forum Energy Technologies, Inc. (FET) - Forum designs, manufactures, and supplies products for the energy industry and also carries a Zacks Rank of 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 17.7% over the last 60 days [2] - Forum has a P/E ratio of 10.15, which is comparable to the industry average of 10.20 [2] - The company possesses a Value Score of A [2] Group 3: Northeast Community Bancorp, Inc. (NECB) - Northeast Community Bancorp is the holding company for NorthEast Community Bank and holds a Zacks Rank of 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 4.6% over the last 60 days [3] - The company has a P/E ratio of 7.36, which is lower than the industry average of 9.20 [3] - Northeast Community possesses a Value Score of B [3]

Group 1 - Forum Energy Technologies (FET) is outperforming its peers in the Oils-Energy sector with a year-to-date gain of approximately 32.6%, compared to the sector average gain of about 5.1% [4] - FET is ranked 8 in the Zacks Sector Rank, which evaluates the strength of 16 individual sector groups based on the average Zacks Rank of the stocks within those groups [2] - The Zacks Rank system indicates that FET has a Zacks Rank of 2 (Buy), reflecting a favorable earnings outlook and positive analyst sentiment [3] Group 2 - The Zacks Consensus Estimate for FET's full-year earnings has increased by 17.7% over the past quarter, indicating improved analyst sentiment [4] - FET belongs to the Oil and Gas - Mechanical and Equipment industry, which has gained an average of 3.4% this year, further highlighting FET's strong performance within its industry [6] - Another stock in the Oils-Energy sector, Nextracker (NXT), has also shown strong performance with a year-to-date increase of 23.8% and a Zacks Rank of 1 (Strong Buy) [5]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lead to limited upside or downside risks [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify these opportunities [3] Group 2: Company Spotlight - Forum Energy Technologies (FET) - FET has shown a price increase of 12.3% over the past four weeks, indicating growing investor interest [4] - The stock has gained 32.6% over the past 12 weeks, with a beta of 2.33, suggesting it moves 133% higher than the market [5] - FET has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [7] - FET is trading at a Price-to-Sales ratio of 0.31, suggesting it is undervalued at 31 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides FET, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Financial Performance - Total revenue for 2024 was $816.4 million, an increase of $77.6 million, or 10.5%, compared to 2023[195] - The Drilling and Completions segment generated $470.8 million in revenue, a decrease of $31.9 million, or 6.3%, from 2023[195] - The Artificial Lift and Downhole segment reported revenue of $345.7 million, an increase of $109.4 million, or 46.3%, compared to 2023[196] - The company experienced a net loss of $135.3 million in 2024, compared to a net loss of $18.9 million in 2023[194] - Segment operating income for the year ended December 31, 2024 was $35.7 million, an increase from $23.8 million in 2023, with an operating margin percentage of 4.4% compared to 3.2% in 2023[197] - Operating income for the Artificial Lift and Downhole segment increased by 54.8% to $48.9 million in 2024[194] Market Conditions - The global drilling rig count decreased by 4.3% in 2024, primarily due to a 12.8% decline in the U.S. rig count[189] - Average West Texas Intermediate (WTI) crude oil price was $76.45 per barrel in 2024, down from $77.58 in 2023[190] - Average Henry Hub natural gas price was $2.19 per Mcf in 2024, compared to $2.53 in 2023[190] Orders and Capital Expenditures - Total inbound orders for 2024 were $780.3 million, an increase from $724.3 million in 2023[192] - The company expects total capital expenditures for 2025 to be approximately $10.0 million, mainly for replacing end-of-life machinery and equipment[210] Cash Flow and Investments - Net cash provided by operating activities was $92.2 million for 2024, significantly higher than $8.2 million in 2023, with improved inventory management contributing to this increase[214] - Net cash used in investing activities was $137.5 million in 2024, primarily for the Variperm acquisition of $150.4 million and capital expenditures of $8.1 million[215] - The company completed the Variperm acquisition for $150.0 million in cash and 2.0 million shares of common stock in January 2024[213] - The company repurchased approximately 105 thousand shares of common stock for $2.0 million following the board's approval of a $75.0 million share repurchase program[212] Tax and Valuation - For the year ended December 31, 2024, the company recognized a tax expense for valuation allowances totaling $25.1 million related to deferred tax assets[234] - The valuation allowance for U.S. deferred tax assets increased by $29.5 million, along with a $6.9 million increase for certain non-U.S. deferred tax assets in the U.K., Singapore, and China[234] - The company released $11.3 million of valuation allowance on deferred tax assets generated from operations in Germany and Saudi Arabia as they were determined no longer required[234] - The company follows the liability method of accounting for income taxes, recognizing deferred tax assets only if they are more likely than not to be realized[234] Impairment and Fair Value - An impairment loss of $119.1 million was recorded on intangible assets within the Coiled Tubing product line in 2024[232] - As of October 1, 2024, the estimated fair value of the reporting unit exceeded its carrying value by approximately 20%[230] - The company performed an annual impairment test for goodwill and concluded no impairment was necessary due to fair value estimates[230] - The company has significant inherent uncertainties and management judgment in estimating the fair value of the reporting unit[230] - Changes in the operating environment, including tax law changes, could impact the determination of tax liabilities for the company[236] Corporate Expenses - Corporate selling, general and administrative expenses increased by $3.7 million to $31.0 million in 2024, mainly due to higher variable compensation costs[199] - Interest expense for the year ended December 31, 2024 was $31.5 million, an increase of $13.2 million compared to 2023, attributed to increased borrowings related to the Variperm acquisition[202] Future Outlook - The company expects long-term energy demand to rise, with hydrocarbons continuing to play a vital role alongside renewable energy sources[183]

Core Insights - Forum Energy Technologies, Inc. (FET) reported Q4 2024 financial results with revenue of $201.0 million, adjusted EBITDA of $22.2 million, and adjusted net income of ($5.9) million, which were in line with revenue expectations but fell short on adjusted EBITDA and net income [1] Financial Performance - Revenue of $201.0 million was consistent with consensus estimates of $201.9 million [1] - Adjusted EBITDA of $22.2 million was below expectations of $24.1 million, resulting in an adjusted EBITDA margin of 11.0% [1] - Adjusted net income of ($5.9) million was lower than the expected $1.0 million due to weaker operating profit margins and the release of a valuation allowance on deferred tax assets in Germany and Saudi Arabia [1] Key Metrics - Free cash flow (FCF) for Q4 2024 was $56.9 million, an increase of $32.4 million sequentially [3] - Revenue from Artificial Lift and Downhole services increased by 6.8% sequentially to $89.9 million [3] - FET initiated a $75.0 million share repurchase program [3]

Financial Data and Key Metrics Changes - Revenue increased by 51% over the last three years, with a 10% growth in 2024 [10][12] - EBITDA grew by 49% in 2024, resulting in a 42% incremental margin and over 300 basis points margin improvement [12] - Free cash flow reached $105 million, the highest since 2015, exceeding guidance by $35 million [28] - Net debt decreased by 30%, improving net leverage from 11 times to just under 1.5 times [11][36] Business Line Data and Key Metrics Changes - Drilling and Completion segment revenue decreased by 10% due to lower US completions activity, with EBITDA down 34% [40] - Artificial Lift and Downhole segment revenue increased by 7%, driven by higher sales of refinery desalting technology and artificial lift products, leading to an 11% EBITDA growth [41] Market Data and Key Metrics Changes - Global drilling and completion activity is expected to decline by 2% to 5% in 2025, with North America forecasted to soften in rig and frac fleet counts [19] - International revenue grew by almost 42%, indicating strong performance outside the US [16] Company Strategy and Development Direction - The company aims to capture profitable market share through a "beat the market" strategy, focusing on differentiated technologies and global footprint [15][18] - Continued investment in energy is anticipated, with a focus on long-term demand growth despite expected transitional challenges in 2025 [18] Management's Comments on Operating Environment and Future Outlook - Management expects 2025 to be a transitional year due to geopolitical and macroeconomic uncertainties, with a forecasted decline in market activity [18] - The company is monitoring natural gas demand and tariff impacts closely, indicating potential upside if commodity prices rise [21][22] Other Important Information - A $75 million share repurchase program was authorized, reflecting confidence in generating consistent free cash flow [14] - The company has no debt maturities until 2028, with total liquidity of $106 million [36] Q&A Session Summary Question: Inquiry about new product related to mobile power - Management confirmed the introduction of Powertron, a heat exchanger for the power generation market, with strong quotation activity [50] Question: Thoughts on future orders for wireline completion - Management indicated that consumables are being consumed well, with potential spikes in capital-type products expected in the coming quarters [54] Question: Guidance on EBITDA amidst market weakness - Management explained that EBITDA guidance reflects the ability to offset market declines through market share gains [62] Question: Areas for growth in market share - Focus on high-margin product lines such as artificial lift and downhole, with ongoing development of new products [70] Question: Impact of tariffs on Canadian operations - Management noted no current impact from tariffs in Canada, but acknowledged potential future adjustments if tariffs are implemented [81] Question: Plans for returning cash to shareholders - Management emphasized the focus on share repurchases over dividends due to the undervaluation of the company's stock [75] Question: Future acquisition opportunities - Management expressed openness to pursuing acquisitions if they present relative value compared to share buybacks [90]

Financial Performance - Fourth quarter 2024 revenue was $201 million, with a net loss of $104 million, including a non-cash impairment of $119 million[1]. - Full year 2024 revenue reached $816 million, a 10% year-over-year increase, with adjusted EBITDA of $100 million, a 49% increase from 2023[3]. - The net loss for 2024 was $135 million, or $11.00 per diluted share, compared to a net loss of $18.9 million in 2023[17]. - The company reported a net loss of $135.3 million for the year ended December 31, 2024, compared to a net loss of $18.9 million in 2023[21]. - Total revenue for the year ended December 31, 2024, was $816.4 million, an increase from $738.9 million in 2023, representing an increase of approximately 10.5%[25]. - The total EBITDA for the year ended December 31, 2024, was $(43.2) million, compared to $45.2 million in 2023, reflecting a significant decline[25]. - For the three months ended December 31, 2024, the company reported an operating loss of $106.8 million, representing a 53.1% loss margin on revenue[30]. - The net income for the same period was a loss of $88.7 million, compared to a loss of $16.8 million in the prior year, indicating a significant decline in profitability[30]. - Adjusted EBITDA for Q4 2024 was $8.1 million, or 4.0% of revenue, while the adjusted net loss was $5.9 million[30]. Cash Flow and Capital Management - Operating cash flow for 2024 was $92 million, and free cash flow was $105 million, the highest since 2015[1]. - The company expects to allocate 50% of free cash flow to net debt reduction and the remainder to strategic investments, including share repurchases[2]. - Free cash flow before acquisitions for Q4 2024 was $56.9 million, a substantial increase from $8.9 million in Q4 2023[39]. - Free cash flow before acquisitions for the year ended December 31, 2024, was $105.1 million, a significant increase from $1.6 million in 2023[41]. - The company had capital expenditures of $8.1 million for property and equipment in 2024, slightly up from $7.9 million in 2023[21]. - The company’s capital expenditures for property and equipment in Q4 2024 were $(2.4) million, reflecting ongoing investment in operational capabilities[39]. Segment Performance - The Drilling and Completions segment revenue decreased by 10% to $111 million, while the Artificial Lift and Downhole segment revenue increased by 7% to $90 million[5][6]. - Operating income for the Drilling and Completions segment was $17.8 million with an operating margin of 3.8% for the year ended December 31, 2024, compared to $19.4 million and 3.9% in 2023[25]. - The Artificial Lift and Downhole segment reported an operating income of $48.9 million with a margin of 14.1% for the year ended December 31, 2024, up from $31.6 million and 13.4% in 2023[25]. - Revenue from the Drilling segment for the three months ended December 31, 2024, was $35.5 million, accounting for 17.6% of total revenue, compared to $41.6 million and 22.5% in 2023[44]. - The Subsea segment generated $18.6 million in revenue for the three months ended December 31, 2024, a decrease from $27.6 million in 2023, reflecting a decline of 32.5%[44]. - Revenue from the Stimulation and Intervention segment was $31.1 million, representing 15.5% of total revenue, compared to $32.1 million and 17.3% in the previous year[44]. - The Drilling and Completions segment contributed $111.1 million, or 55.3% of total revenue, down from $126.6 million and 68.4% in 2023[44]. - Downhole revenue increased to $51.5 million, representing 25.6% of total revenue, compared to $21.7 million and 11.7% in the same period of 2023[44]. - The Artificial Lift and Downhole segment saw revenue of $89.9 million, a significant increase from $58.6 million in 2023, representing a growth of 53.3%[44]. Market Demand and Strategic Initiatives - The "Beat the Market" strategy led to a 15% market share growth as measured by revenue per global rig[4]. - Total orders for the three months ended December 31, 2024, were $190.0 million, compared to $160.3 million in the same period of 2023, indicating a year-over-year increase of approximately 18.6%[27]. - The book-to-bill ratio for total orders was 0.95 for the three months ended December 31, 2024, compared to 0.87 in the same period of 2023, suggesting improving market demand[27]. - The company highlighted strategic opportunities for future growth, including potential acquisitions and investments in business expansion[30]. Impairments and Losses - The company incurred $119.1 million in impairment of intangible assets during the year ended December 31, 2024[21]. - The company incurred $119.1 million in impairment of intangible assets during the quarter, which heavily impacted the financial results[30]. - The diluted EPS as reported for Q4 2024 was $(8.39), while the adjusted diluted EPS was $(0.48)[30].

Core Insights - Laurentian Research is a veteran in the resource industry with a Ph.D. in geoscience and extensive investment experience [1] - The Natural Resources Hub aims to help members identify undervalued opportunities in the energy and mining sectors with significant growth potential [1] - The platform offers various resources including weekly newsletters, in-depth analyses, trade alerts, model portfolios, and a community for sharing investment ideas [2][3] Group 1 - The Natural Resources Hub focuses on uncovering multi-bagger potential in energy and mining sectors [1] - The service is designed to assist members in finding dividend growth opportunities from long-term growth industries [1] - Members benefit from private access to Laurentian Research and a supportive community of fellow investors [2][3]

Core Insights - Forum Energy Technologies, Inc. (FET) reported Q3 2024 financial results with revenue of $207.8 million, adjusted EBITDA of $25.8 million, and adjusted net income of ($2.3) million, which were in line with expectations [3][4] - The company completed debt refinancing during the quarter, which may enhance financial stability [4] - The artificial lift and equipment segment saw a 9.0% increase in orders, indicating strong demand in this area [4] - The drilling and completions segment experienced a quarter-over-quarter revenue increase of 5.6%, reaching $123.6 million, reflecting growth in operational activities [4]