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What Are Flotek Industries’ Future Growth Drivers?

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What does Flotek Industries’ management think?

Flotek Industries’ (FTK) management considers the current energy market environment to be challenging for the oilfield services industry.

In its 2Q16 conference call, Flotek Industries’ CEO John Chisholm said, “The current oilfield environment remains one of the most difficult markets I’ve seen in my entire career. The accelerated decline in overall activity from drilling to completions and even production enhancement has created overwhelming challenges for many industry participants.”

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Flotek Industries’ future growth drivers

  • acquisition of International Polymerics in July 2016, increasing its scope in the prescriptive chemistry management program
  • agreement with two independent exploration companies in North America to develop complete fluid systems
  • plans for the development of commercial opportunities in Argentina, Mexico, Central and South America, and the Middle East in 2017

Analysts’ targets for FTK

Wall Street analysts have varied opinions about FTK’s target price over the next 12 months. While the lowest target price for FTK is ~$7, the highest is $20. The median target price surveyed among sell-side analysts is $15.25. Flotek Industries is currently trading at ~$15.4, implying a ~1% downside at its median price.

Precision Drilling (PDS), Flotek Industries’ peer, received a $5.6 median target price. This, relative to its current price of ~$4.8, has upside potential of 17%. FTK makes up 0.13% of the iShares Core S&P Small-Cap ETF (IJR). The energy sector makes up 2.9% of IJR.

Next, we’ll discuss Flotek Industries’ revenue and earnings.

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