In a recent transaction, Guy Sirkes, the Senior Vice President and Chief Financial Officer of Nine Energy Service, Inc. (NYSE:NINE), sold 9,775 shares of the company's common stock. The sale, dated August 12, 2024, was executed at an average price of $1.358 per share, totaling approximately $13,274.
The transaction was disclosed in a Form 4 filing with the Securities and Exchange Commission. According to the filing, the shares were sold to satisfy tax withholding obligations related to the vesting of a time-based restricted stock award granted to Sirkes on August 9, 2021. Following the sale, Sirkes still owns 192,346 shares of Nine Energy Service, Inc.
In addition to the sale, the filing revealed a transfer of 4,144 shares of common stock to Sirkes' ex-spouse, which occurred since his last ownership report. This transfer was noted in a footnote and is separate from the sale transaction.
Investors often monitor insider sales as they may provide insights into an executive's perspective on the company's current valuation and future prospects. Nine Energy Service, Inc. specializes in oil and gas field services and is incorporated in Delaware.
In other recent news, Nine Energy Service reported its second quarter 2024 earnings, achieving a revenue of $132.4 million, which aligns with its earlier projections. Despite industry challenges, including a decrease in rig counts and lower pricing within its cementing business, the company managed to maintain its financial performance with an adjusted EBITDA of $9.7 million for the quarter. However, these challenges led to a diluted EPS of -$0.40.
Nine Energy Service projects its Q3 revenue to fall within the range of $127 million to $137 million. The company also reported that gas market revenue makes up 30-35% of its total revenue and maintains a positive medium and long-term outlook on this market. Efficiency improvements in equipment maintenance have led to reduced capital expenditure needs.
Analysts noted that declines in rig counts and cementing business pricing have impacted earnings negatively, but the company's refrac market is experiencing growth. Nine Energy Service is also considering expanding services to include consulting in this growing market. The company is prepared for a potential increase in exploration and production activity in the latter half of 2025, indicating optimism about future developments in the industry.
InvestingPro Insights
As investors parse through the insider transactions of Nine Energy Service, Inc. (NYSE:NINE), it's critical to consider the broader financial context in which these sales occur. According to recent data sourced from InvestingPro, Nine Energy Service operates with a significant debt burden and has been grappling with weak gross profit margins, as evidenced by a gross profit margin of 16.88% over the last twelve months as of Q2 2024. This financial strain is reflected in the company's market capitalization, which stands at a modest $55.37 million.
Moreover, the stock's performance has been under considerable pressure, with a one-year total return plummeting by -71.06%. This decline in stock price is also reflected in the company's trading pattern, as Nine Energy Service is currently trading near its 52-week low, with a price that is only 27.24% of its 52-week high. This aligns with the InvestingPro Tip highlighting that the stock has taken a big hit over the last week, with a one-week price total return of -16.77%.
Adding to the concerns, the company's P/E ratio is negative, recorded at -1.01, indicating that investors are not expecting earnings to cover the stock price in the near term. This is further substantiated by another InvestingPro Tip, which suggests that analysts do not anticipate the company will be profitable this year.
For investors seeking a more in-depth analysis, there are additional InvestingPro Tips available, providing a comprehensive evaluation of Nine Energy Service's financial health and stock performance. These tips can be found at https://www.investing.com/pro/NINE, offering valuable insights for those considering the company's investment potential.
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