Investors in LSB Industries, Inc. (LXU) need to pay close attention to the stock based on moves in the options market lately. That is because the Mar 20, 2026 $17.50 Put had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could al ...

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: LSB (LXU) - LSB currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance [3][4] - The stock has shown significant price increases, with an 8.52% rise over the past week, compared to a 6.31% increase in the Zacks Chemical - Diversified industry [6] - Over the past quarter, LSB shares have increased by 12.18%, and by 25% over the last year, outperforming the S&P 500's gains of 3.7% and 19.07% respectively [7] Trading Volume - LSB's average 20-day trading volume is 353,646 shares, which serves as a baseline for price-to-volume analysis; a rising stock with above-average volume is generally seen as bullish [8] Earnings Outlook - In the past two months, one earnings estimate for LSB has increased, raising the consensus estimate from $0.22 to $0.36 for the full year, with no downward revisions [10] - For the next fiscal year, one estimate has also moved upwards, indicating positive sentiment regarding future earnings [10] Conclusion - Given the strong performance metrics and positive earnings outlook, LSB is positioned as a promising investment opportunity with a Momentum Score of B [12]

Core Viewpoint - LSB (LXU) shows a significant improvement in earnings outlook, making it an attractive investment option as analysts continue to raise earnings estimates for the company [1][3]. Earnings Estimate Revisions - The rising trend in earnings estimate revisions reflects growing analyst optimism about LSB's earnings prospects, which is expected to positively impact its stock price [2]. - For the current quarter, LSB is projected to earn $0.18 per share, indicating a year-over-year increase of +157.1%. The Zacks Consensus Estimate has risen by 102.33% due to one upward revision and no negative revisions in the last 30 days [6]. - For the full year, LSB is expected to earn $0.36 per share, representing a +56.5% change from the previous year. The consensus estimate has increased by 62.15% with one upward revision and no negative revisions [7][8]. Zacks Rank - LSB has achieved a Zacks Rank 2 (Buy), indicating strong agreement among analysts in raising earnings estimates. This rank is associated with significant outperformance compared to the S&P 500 [9]. - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the market, with Zacks 1 stocks generating an average annual return of +25% since 2008 [3][9]. Stock Performance - LSB's stock has gained 14.5% over the past four weeks, driven by solid estimate revisions and positive earnings growth prospects, suggesting it may be a good addition to investment portfolios [10].

Group 1 - LSB (LXU) is currently ranked 2 (Buy) in the Zacks Rank system, indicating strong analyst sentiment and an improving earnings outlook [3] - Year-to-date, LSB has gained approximately 26.6%, outperforming the Basic Materials sector average gain of 25.5% [4] - LSB belongs to the Chemical - Diversified industry, which is currently ranked 216 in the Zacks Industry Rank, with stocks in this group having lost about 25.5% year-to-date [5] Group 2 - The Zacks Consensus Estimate for LSB's full-year earnings has increased by 70.3% over the past three months, reflecting a positive shift in analyst expectations [3] - Another outperforming stock in the Basic Materials sector is Metalla Royalty & Streaming Ltd. (MTA), which has returned 198% year-to-date [4] - The Mining - Miscellaneous industry, to which Metalla belongs, is currently ranked 89 and has moved up by 29.4% year-to-date [6]

Core Viewpoint - LSB Industries, Inc. is actively participating in investor conferences and has announced its financial results for the third quarter of 2025, showcasing significant improvements in net sales and net income compared to the previous year [1][5][6]. Company Overview - LSB Industries, Inc. is headquartered in Oklahoma City, Oklahoma, and focuses on producing low and no carbon products for various markets, including agriculture, industrial, and mining [2]. - The company manufactures ammonia and related products at multiple facilities across the United States [2]. Financial Performance - For the third quarter of 2025, LSB reported net sales of $155.4 million, an increase from $109.2 million in the third quarter of 2024 [5]. - The company achieved a net income of $7.1 million, a significant turnaround from a net loss of $25.4 million in the same quarter of the previous year [5]. - Diluted earnings per share (EPS) improved to $0.10 compared to a loss of $0.35 in the third quarter of 2024 [5]. Upcoming Events - LSB Industries will release its financial results for the third quarter on October 29, 2025, and will host a conference call on October 30, 2025, to discuss these results [6]. - The company’s Executive Vice President and CFO, Cheryl Maguire, will participate in the NYSE Industrials Virtual Conference on November 18 and 19, 2025, with one-on-one meetings available on November 19 [1].

Financial Performance - Net sales for Q3 2025 reached $155.431 million, a 42.3% increase from $109.217 million in Q3 2024[12] - Gross profit for Q3 2025 was $25.543 million, compared to a gross loss of $7.945 million in Q3 2024[12] - Net income for Q3 2025 was $7.115 million, a significant recovery from a net loss of $25.382 million in Q3 2024[12] - Operating income for Q3 2025 was $15.629 million, a turnaround from an operating loss of $24.423 million in Q3 2024[12] - The company reported a basic net income per share of $0.10 for Q3 2025, compared to a loss of $0.35 per share in Q3 2024[12] - For the nine months ended September 30, 2025, net income was $8.481 million compared to a net loss of $10.204 million in the same period of 2024, representing a significant turnaround[17] - Adjusted gross profit for the first nine months of 2025 was $128.8 million, a 12% increase from $114.9 million in the same period of 2024, with a gross profit percentage of 14.0%[145][149] - Adjusted gross profit for the three months ended September 30, 2025, was $45.978 million, compared to $25.003 million for the same period in 2024, indicating an increase of approximately 83.6%[188] Assets and Liabilities - Total current assets decreased to $270.620 million as of September 30, 2025, down from $309.714 million at December 31, 2024[10] - Total liabilities decreased to $644.918 million as of September 30, 2025, compared to $633.210 million at December 31, 2024[10] - Cash and cash equivalents increased to $27.951 million from $20.230 million at December 31, 2024[10] - Total stockholders' equity increased to $504.609 million as of September 30, 2025, up from $491.640 million at December 31, 2024[10] - Long-term debt as of September 30, 2025, was $447,582,000, down from $476,163,000 as of December 31, 2024[55] - The company’s long-term debt includes Senior Secured Notes due 2028 with an interest rate of 6.25%[55] - The company’s financial covenant under the Revolving Credit Facility was not triggered as of September 30, 2025[57] Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2025, was $77.575 million, slightly down from $82.600 million in 2024[17] - Net cash used by investing activities was $16.942 million for the nine months ended September 30, 2025, compared to $18.380 million in 2024, indicating a reduction in investment outflows[17] - Cash and cash equivalents at the end of the period were $27.951 million, down from $42.283 million at the end of September 2024[17] - The company repurchased $32.076 million of 6.25% Senior Secured Notes during the nine months ended September 30, 2025, compared to $92.216 million in 2024, indicating a shift in financing strategy[17] - Net cash provided by operating activities for the first nine months of 2025 was $77.6 million, a decrease of $5 million compared to $82.6 million in 2024[157] - Net cash used in financing activities was $52.9 million for the first nine months of 2025, a significant decrease from $123.0 million in the same period of 2024[160] Sales and Production - The company reported net sales of $176.8 million for AN & Nitric Acid in the nine months ended September 30, 2025, compared to $154.9 million in the same period of 2024, reflecting a 14.2% increase[89] - Urea ammonium nitrate (UAN) sales increased to $147.6 million for the nine months ended September 30, 2025, from $109.3 million in 2024, marking a 35% growth[89] - Total product sales volume for the first nine months of 2025 was 1,132,502 tons, a 12% increase from 1,007,081 tons in the same period of 2024[146] - Total ammonia production target for 2025 is approximately 820,000 to 850,000 tons[128] - The company expects to produce approximately 305,000 to 380,000 metric tons of low carbon ammonia annually, which could be sold at higher price levels than conventional ammonia[107] Market Conditions and Pricing - Ammonia prices are currently constrained due to reduced supply from the Middle East and higher production costs in Europe, with expectations of continued supply constraints through the end of 2025[110] - UAN prices have strengthened above year-ago levels, driven by steady exports and strong demand, with tight U.S. supply fundamentals expected to persist into 2026[111] - The USDA estimates approximately 98 million acres of corn will be planted in 2025, a 9% increase from 2024, supporting strong fertilizer demand[112] - The company anticipates changes in ammonia pricing, which could affect overall revenue and market positioning[199] Environmental and Regulatory Matters - The company has identified a wastewater treatment technology for nitrogen-containing wastewater streams at the Pryor Facility, but costs related to the replacement of the disposal well are currently unestimable[69] - The company accrued an estimate for penalties related to a Notice of Violation from the EPA, which was not material and paid as of September 30, 2025[75] - The company continues to work with the Oklahoma Department of Environmental Quality under a Consent Order for the continued use of the injection well until a wastewater treatment process is operational[68] - The company expects to incur environmental compliance expenses ranging from $0.9 million to $1.2 million for the remainder of 2025, following $3.2 million in expenses for the first nine months of 2025[176] Strategic Initiatives - The company is evaluating opportunities for organic capacity expansion and potential acquisitions to enhance value and provide attractive returns to stockholders[109] - There is an ongoing strategy to broaden product distribution, leveraging nitric acid production capacity at the El Dorado Facility[199] - The company has entered into a five-year agreement to supply up to 150,000 short tons per year of low carbon ammonium nitrate solution to Freeport Minerals Corporation, starting January 1, 2025[105] Risks and Challenges - The company faces risks from increased competitive pressures and changes in federal, state, and local regulations, including those related to climate change[201] - Recent U.S. tariffs on agricultural products may impact selling prices and input costs, potentially disrupting supply chains[208] - Economic cycles and global market conditions are critical factors that could adversely affect financial performance and liquidity[205] - The international market for nitrogen fertilizer significantly influences operating results, affected by currency values and foreign agricultural policies[207]

Financial Data and Key Metrics Changes - The company reported a significant increase in adjusted EBITDA from $17 million in Q3 2024 to $40 million in Q3 2025, driven by higher pricing and increased sales volumes, despite higher natural gas and other costs [8][9] - Free cash flow generation returned, with approximately $20 million generated year-to-date and $36 million in Q3 2025 [9][10] - The balance sheet remains solid with approximately $150 million in cash and net leverage at approximately two times [9] Business Line Data and Key Metrics Changes - The transition from high-density ammonium nitrate (HDAN) to ammonium nitrate solution for explosives has been completed, optimizing the sales mix [5] - UAN pricing averaged $336 per tonne in Q3 2025, up 65% from Q3 2024, supported by steady exports and strong demand [6] - UAN volumes decreased from 150,000 to about 135,000 year-over-year, with expectations to align with targets in Q4 [45][46] Market Data and Key Metrics Changes - The ammonia market remains tight, with Tampa ammonia prices increasing by $60 to $650 per metric tonne for November, up from $590 in October [6][9] - Domestic production of methylenediphenyl diisocyanate (MDI) is increasing due to tariffs on imports, positively impacting nitric acid sales [5] - The company expects a healthy fall ammonia application season, with strong demand in the U.S. and globally [20] Company Strategy and Development Direction - The company is focused on enhancing performance across its business and investing in strategic priorities, including a low-carbon project at the El Dorado facility expected to generate approximately $15 million in annual EBITDA starting in 2027 [11][12] - There is an ongoing evaluation of production capacity expansion, including potential ammonia expansion at El Dorado [31][32] - The company aims to shift sales towards more contractual industrial sales to improve earnings stability and visibility [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a robust market outlook and the company's position to improve operational and financial performance [12] - The company anticipates the fourth quarter of 2025 to be higher than the prior year due to increased selling prices and production, despite higher variable costs [10] - Management highlighted the importance of safety and the need to remain focused on safe operations following a tragic incident [3] Other Important Information - The company will participate in the NYSE Industrials virtual conference on November 18th and 19th [12] - The transition to industrial-grade products allows for better visibility into earnings due to the pass-through of natural gas costs [9] Q&A Session Summary Question: Ammonia market outlook and pricing impact - Management noted a tight supply and demand market globally, with ongoing issues in Trinidad affecting supply [18][20] Question: UAN pricing and setup for 2026 - Management expressed optimism for UAN, expecting prices to recover as the market tightens due to reduced Chinese exports [22][24] Question: Volume impacts and cost side for Q4 - The transition from HDAN to ammonium nitrate solution led to higher costs, but volumes are expected to align with Q3 levels in Q4 [26] Question: Industrial demand impact on contracts and margins - Healthy nitrogen prices are expected to aid in negotiating new contracts and maintaining margins [29][30] Question: El Dorado project and offtake agreements - The CCS project has a negotiated rate for CO2 sequestered, and management is exploring additional contracts and monetization opportunities [40][42]

Financial Performance - Net sales increased to $155 million in Q3'25 from $109 million in Q3'24[16] - Adjusted EBITDA rose to $40 million in Q3'25, compared to $17 million in Q3'24[16] - Adjusted EBITDA margin improved to 26% in Q3'25 from 16% in Q3'24[16] - Diluted EPS was $010 in Q3'25, a significant improvement from $(035) in Q3'24[16] Sales and Production - The company saw increased sales volumes of AN (Ammonium Nitrate) and Nitric Acid in Q3'25 compared to Q3'24[8] - UAN (Urea Ammonium Nitrate) sales volumes also increased in Q3'25 compared to Q3'24[8] Market Conditions and Outlook - The company anticipates a strong market outlook for both fertilizer and industrial end markets into 2026[9] - Demand for industrial products is robust, supported by strong gold and copper prices[10, 11] - Strong fertilizer pricing is expected to continue, driven by ammonia supply disruptions and strong demand[13, 15] Balance Sheet and Liquidity - The company's cash and short-term investments totaled $152 million as of September 30, 2025[22] - Total debt was $448 million as of September 30, 2025[22] - Net debt to TTM (Trailing Twelve Months) Adjusted EBITDA was 20X[22]

Company Performance - LSB reported quarterly earnings of $0.1 per share, exceeding the Zacks Consensus Estimate of $0.07 per share, compared to a loss of $0.11 per share a year ago, representing an earnings surprise of +42.86% [1] - The company posted revenues of $155.43 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 30.26%, and compared to year-ago revenues of $109.22 million [2] - Over the last four quarters, LSB has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - LSB shares have increased approximately 21.2% since the beginning of the year, outperforming the S&P 500's gain of 17.2% [3] - The current consensus EPS estimate for the coming quarter is $0.09 on $123.65 million in revenues, and $0.22 on $537.7 million in revenues for the current fiscal year [7] Industry Outlook - The Zacks Industry Rank indicates that the Chemical - Diversified sector is currently in the bottom 7% of over 250 Zacks industries, suggesting potential challenges for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact LSB's stock performance [5]

Group 1 - LSB (LXU) shares experienced a significant increase of 12.4%, closing at $8.99, following a period of 2.4% loss over the past four weeks, indicating a strong trading session with higher-than-average volume [1] - The company's positive outlook is driven by strong selling prices and favorable demand, alongside steady exports and lower imports, resulting in tight supply fundamentals in the ammonia market [2] - LSB is projected to report quarterly earnings of $0.05 per share, reflecting a year-over-year increase of 145.5%, with expected revenues of $119.32 million, up 9.3% from the previous year [3] Group 2 - The consensus EPS estimate for LSB has remained unchanged over the last 30 days, suggesting that the stock's price movement may not sustain without trends in earnings estimate revisions [4] - LSB holds a Zacks Rank of 3 (Hold), indicating a neutral outlook within the Zacks Chemical - Diversified industry, where DuPont de Nemours (DD) also holds a Zacks Rank of 3 [5] - DuPont de Nemours has seen a slight decrease in its consensus EPS estimate by 0.2% over the past month, now projected at $1.13, which is a 4.2% decline from the previous year [6]