Core Insights - The article emphasizes the importance of timing and sustainability in short-term investing, highlighting that successful entry into trends is crucial for profitability [1][2] Group 1: Stock Performance - Flotek Industries (FTK) has shown a significant price increase of 94.3% over the past 12 weeks, indicating strong investor interest [4] - The stock has also increased by 13.2% in the last four weeks, suggesting that the upward trend is still intact [5] - FTK is currently trading at 90.5% of its 52-week high-low range, indicating a potential breakout [5] Group 2: Fundamental Strength - FTK holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6] - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7] Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like FTK that are on an uptrend supported by strong fundamentals [3][8] - The article suggests that investors should consider multiple screening strategies to find winning stock picks tailored to their investing style [8]

Core Viewpoint - The proposed amendments by the EPA regarding flare monitoring regulations are expected to positively impact the industry, particularly for companies like Flotek Industries, which offers advanced monitoring solutions [4][11]. Regulatory Changes - The EPA's proposed amendments include technical changes to the vent gas NHV continuous monitoring requirements for flaring operations, expanding some exemptions while limiting the number of flares exempted from compliance testing [1][4]. - The amendments are open for public comment for 45 days following their publication in the Federal Register [1]. Company Performance - Flotek's Data Analytics segment reported a 30% increase in revenues from the second quarter of 2024, attributed to new flare monitoring services utilizing the JP3 VeraCal analyzer [5]. - The company has invested in analytical assets to address industry resource limitations and simplify compliance processes [5]. Technology and Innovation - Flotek's JP3 system was designated as an approved measurement technology for initial flare regulations, marking it as the first approved alternative method for NHV measurement in flare gases [8]. - The company focuses on delivering innovative solutions that leverage near real-time data to maximize customer returns, supported by a robust intellectual property portfolio of over 170 patents [9]. Strategic Outlook - The CEO of Flotek expressed confidence in the growth potential of the Data Analytics segment, anticipating significant growth in 2025 due to the demand for compliance with updated flare monitoring regulations [11]. - The company's strategy emphasizes the convergence of chemistry and real-time data solutions to provide differentiated technologies [11].

Core Insights - The S&P 500 has experienced a significant surge of 29.5% year to date, reaching record highs over 50 times, driven by robust economic growth and easing inflation [2] - The energy sector has faced challenges, with crude prices around $70 per barrel, nearly 20% lower than April's peak, and OPEC reducing its 2024 oil demand growth forecast for the fifth consecutive month to 1.61 million barrels per day, down 27% since July [3] - Amidst the broader market success, the energy sector's struggles highlight the volatility of global energy markets [3] Energy Sector Analysis - The energy sector has delivered only 4.4% in total returns, significantly lagging behind the broader market performance, which presents a unique opportunity for investors to strengthen their energy portfolios [23] - Several mid-cap companies have transitioned into the small-cap category due to the sector's struggles, yet they often maintain solid fundamentals, creating investment opportunities [6] - Tullow Oil, Nine Energy Service, and Flotek Industries are highlighted as small-cap players with attractive valuations and potential upside, making them compelling choices for investors [12] Company Profiles - **Tullow Oil**: A London-based hydrocarbon producer focusing on Africa, with a market cap of approximately $320.9 million and a projected 20% year-over-year growth in 2024 earnings per share [18] - **Nine Energy Service**: Specializes in completion solutions for energy firms, with a market cap of around $41.1 million and a 9% upward revision in 2024 earnings estimates over the past 60 days [19] - **Flotek Industries**: A chemistry and data technology company with a market cap of about $248.8 million, leveraging over 170 patents to enhance operational efficiency for hydrocarbon producers [11][10]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps investors identify stocks with momentum by focusing on key metrics [2] Group 2: Flotek Industries (FTK) Analysis - Flotek Industries currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating strong potential for outperformance [3][4] - FTK shares have increased by 11.01% over the past week, outperforming the Zacks Oil and Gas - Field Services industry, which rose by 7.8% [7] - Over the last quarter, FTK shares have surged by 110.47%, and over the past year, they have gained 120.94%, significantly outperforming the S&P 500's increases of 7.52% and 33.61% respectively [8] Group 3: Trading Volume and Earnings Outlook - FTK's average 20-day trading volume is 222,564 shares, which is a useful indicator of market interest and can signal bullish or bearish trends [9] - In terms of earnings outlook, FTK's consensus estimate has risen from $0.27 to $0.29 over the past 60 days, with one upward revision for the current fiscal year and none downward [11] - Given these factors, FTK is positioned as a promising stock for near-term gains, supported by its Momentum Score of B [12]

Core Viewpoint - The article emphasizes the importance of identifying and maintaining stock price trends for successful short-term investing, highlighting the utility of a specific screening strategy to find stocks with strong fundamentals and positive momentum [1][2]. Group 1: Stock Screening Strategy - The "Recent Price Strength" screen is designed to identify stocks with sufficient fundamental strength to sustain their recent upward trends, focusing on those trading in the upper portion of their 52-week high-low range, indicating bullishness [3]. - Flotek Industries (FTK) is highlighted as a candidate that passed the screening, showing a significant price increase of 91.3% over the past 12 weeks, reflecting investor confidence in its potential upside [4]. - FTK has also experienced a price increase of 65.5% over the last four weeks, confirming that the upward trend is still intact [5]. Group 2: Fundamental Analysis - FTK holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, which are critical for near-term price movements [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), indicating high optimism from the brokerage community regarding its near-term price performance [7]. - The article suggests that the price trend for FTK is likely to continue without reversal in the near future, supported by its strong fundamentals [8].

Company Overview - Flotek Industries (FTK) currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 2 (Buy), suggesting a favorable outlook compared to the market [3] Price Performance - FTK shares have increased by 0.6% over the past week, while the Zacks Oil and Gas - Field Services industry has declined by 2.11% during the same period [5] - Over the past quarter, FTK shares have risen by 62.09%, and they are up 74.25% over the last year, significantly outperforming the S&P 500, which has moved 13.08% and 38.58% respectively [6] Trading Volume - FTK's average 20-day trading volume is 112,773 shares, which serves as a price-to-volume baseline for assessing momentum [7] Earnings Outlook - In the past two months, one earnings estimate for FTK has increased, while none have decreased, raising the consensus estimate from $0.27 to $0.29 [9] - For the next fiscal year, one estimate has moved upwards with no downward revisions, indicating positive earnings momentum [9]

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for successful short-term investing, highlighting that price movements should be supported by strong fundamentals and positive earnings estimates. Group 1: Stock Performance - Flotek Industries (FTK) has shown a solid price increase of 51.2% over the past 12 weeks, indicating strong investor interest in the stock [4] - FTK has also experienced a price increase of 35% over the last four weeks, suggesting that the upward trend is still intact [5] - The stock is currently trading at 96.3% of its 52-week high-low range, indicating a potential breakout [5] Group 2: Fundamental Strength - FTK holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6] - The Average Broker Recommendation for FTK is 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7] - The Zacks Rank stock-rating system has a strong historical performance, with Zacks Rank 1 stocks averaging an annual return of +25% since 1988 [7] Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like FTK that are on an uptrend supported by strong fundamentals [3] - Investors are encouraged to explore other stocks that meet similar criteria and consider various Zacks Premium Screens tailored to different investing styles [8] - The effectiveness of stock-picking strategies can be backtested using the Zacks Research Wizard, which includes successful stock-picking strategies [9]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANG ACT OF 1934 For the quarterly period ended September 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANG ACT OF 1934 For the transition period from to Commission File Number 1-13270 FLOTEK INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 90-0023731 (State of other jurisdiction of in ...

Financial Data and Key Metrics Changes - Total revenue increased by 5% year-over-year and 8% sequentially, reaching $49.7 million in Q3 2024, despite weaker North American Oil Field Services activity [6][15] - Net income was $2.5 million, marking a 97% year-over-year increase, while adjusted EBITDA rose to $4.8 million, a 43% increase year-over-year [8][15] - Adjusted EBITDA guidance for 2024 was raised to a range of $16.5 million to $18.5 million, reflecting a 35% increase at the midpoint compared to initial guidance [18] Business Segment Data and Key Metrics Changes - Data analytics segment revenues grew by 30% in Q3 2024, with data as a service revenue increasing by 40% sequentially [7] - Revenue from the chemistry technology segment increased by 7% in Q3 2024, despite a declining frac fleet market [7][15] - Gross profit from the data analytics segment reached $1.2 million, an 88% increase compared to the previous quarter, with a gross margin of 44% [17] Market Data and Key Metrics Changes - The active frac fleet count declined over 14% from the peak in Q1 2024, yet the company managed to grow revenue [6][7] - The demand for oil and gas is expected to expand over the next decade, with electricity demand in the U.S. projected to climb 15% by 2030 [13] Company Strategy and Development Direction - The company aims to capture further market share and enhance profitability through innovation in chemistry and data solutions [9][10] - Flotek is focusing on expanding its data as a service model and leveraging AI-driven reservoir modeling to improve hydrocarbon recovery [10][11] - The company is positioned to benefit from new EPA regulations regarding flare monitoring, with significant growth potential in this area [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute despite market headwinds and emphasized the importance of safety and service quality [5][9] - The company anticipates continued growth in both chemistry and data analytics segments, with expectations for a strong finish to 2024 [20] - Management noted that the regulatory environment is expected to drive demand for their services, particularly in flare monitoring and chain of custody applications [24][30] Other Important Information - The company reduced borrowings under the asset-based loan by 81% or $6.1 million compared to the end of 2023 [9] - The company achieved zero recordable and lost time incidents during the quarter, highlighting its commitment to safety [9] Q&A Session Summary Question: Insights on the flare market and customer concentration - Management indicated a preference for rental service agreements over capital purchases, with a growing diversification of the customer base [22][23] Question: Thoughts on SG&A growth in relation to demand - Management is considering adding personnel to meet demand but expects SG&A to continue trending down as a percentage of revenue [25][26] Question: Sales cycle and pipeline for data services - The sales cycle for traditional services is 9 to 12 months, while new regulatory areas are seeing much faster cycles, sometimes under a month [30] Question: Performance of flare monitoring and chain of custody - Management confirmed that flare monitoring is on track, with significant growth expected, while chain of custody applications are ahead of schedule [34][36]

Core Viewpoint - Flotek Industries reported quarterly earnings of $0.08 per share, exceeding the Zacks Consensus Estimate of $0.07 per share, and showing an increase from $0.04 per share a year ago, indicating a positive earnings surprise of 14.29% [1][2] Financial Performance - The company posted revenues of $49.74 million for the quarter ended September 2024, which was 1.31% below the Zacks Consensus Estimate, and an increase from $47.27 million year-over-year [2] - Over the last four quarters, Flotek Industries has only surpassed consensus EPS estimates once [2] Stock Performance - Flotek Industries shares have increased approximately 29.3% since the beginning of the year, outperforming the S&P 500's gain of 20.1% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $52.8 million, and for the current fiscal year, it is $0.27 on revenues of $189.7 million [7] - The estimate revisions trend for Flotek Industries is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Oil and Gas - Field Services industry, to which Flotek Industries belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges ahead [8]