Tetra Technologies Inc.

TETRA Technologies Inc. (NYSE: TTI) is a corporation that provides oil and gas products and services. Completion fluids and related goods and services, water management, frac flowback, and production well testing are the company's main areas of expertise. Completion Fluids & Products and Water & Flowback Services are the two reporting segments that the company works under.

Key Highlights

• At the completion of TETRA's annual meeting on May 24, 2022, William D. Sullivan stepped down as chairman of the board of directors. John "Jay" F. Glick was overwhelmingly elected to succeed Sullivan as board chair on May 24, 2022.
• On May 02, 2022, TETRA Technologies Inc. announced the first quarter of 2022 results.
• Revenue of USD130 million in the first quarter of 2022 was up 68 percent year over year and 15 percent sequentially from the fourth quarter of 2021.
• The benefit of USD1.1 million in mark-to-market gains from TETRA's equity investment in CSI Compressco LP, as well as USD564,000 in non-recurring credits, net of charges, boosted net income before discontinued operations to USD7.7 million. In the first quarter, net income per share from continuing operations was USD0.06, compared to a net loss per share from continuing operations of USD0.01 in the fourth quarter.
• Adjusted EBITDA was USD20.5 million, net of USD564,000 in charges, including USD1.1 million in mark-to-market gains and subtracting non-recurring credits.
• Stronger onshore and offshore activities, as well as the advantage of better pricing, drove up first-quarter adjusted EBITDA by USD7.4 million, or 57 percent, over the fourth quarter of 2021.
• In the first quarter of 2022, cash flow from operational operations was USD5.9 million. The robust ramp-up of activities in March was reflected in adjusted free cash flow from continuing operations of USD2.9 million.

Stock recommendation

TTI's stock price has gained 78.75% in the past six months and is currently in the upper side of its 52-week range of USD 2.32 to USD 5.82.  As can be seen in the chart below, the price is currently between the short-term (50-day) SMA and long-term (200-day) SMA, with RSI at 38.33. The price has currently broken down the short-term SMA from where the price has been continuously taking support over the past few months.  

Given the stock's considerable upward momentum in the past six months but a strong correction in the last couple of weeks, financial results, and technical analysis, we propose a "Watch" rating on the stock at its closing price of USD 4.29 as of June 16, 2022, at 12:35 PM PDT, with further analysis at the next important support range of around USD 3.50.

One Year Technical Chart, as of June 16, 2022, at 12:35 PM PDT. Data Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary

* Current price as of June 16, 2022, at 12:35 PM PDT.

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.