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U.S. Well Services Inc (NASDAQ:USWS) Stock Sees Continuous Sell-Off: Here is Why

Ash K , , , ,

U.S. Well Services Inc (NASDAQ:USWS) was in the news this past Friday after it announced its financial results for the third fiscal quarter of 2021. However, the numbers did not quite thrill investors and the stock suffered a selloff straightaway.

Market Stats

On Friday, USWS stock slumped 13% at $2.04 with more than 2.05 million shares, compared to its average volume of 4.37 million shares. The stock has moved within a range of $2.0000 – 2.3400 after opening trading at $2.31.

Earnings Recap

It declined by 13% on Friday and that took its decline for the whole of previous week to as much as 18%. Could this sharp decline in the stock be an opportunity for investors this week? In order to figure it out, it might be the right time to look into the company’s financial performance.

The revenues generated by U.S. Well Services in the third fiscal quarter came in at $56.5 million. However, that reflected a significant decline on a sequential basis from the $78.8 million that it had generated in the previous quarter. The company noted that the drop in revenues was primarily due to its decision to reduce the number of active fleets due to U.S. Well Services’ move to get out of the traditional pressure pumping space. The average active fleets during the quarter stood at 5.7 but in the previous quarter, the average active fleets had been 9.3. 

Key Quote

“During the third quarter of 2021, U.S. Well Services finalized its exit from the conventional pressure pumping market,” said Joel Broussard, the Company’s President and CEO.  “Although the transition has not come without challenges, we believe U.S. Well Services is incredibly well positioned to capitalize on the growing market demand for electric pressure pumping services.”

Traders Corner

USWS stock is trading below the 20-Day and 50-Day Moving averages of $2.49 and $2.62 respectively. Moreover, the stock is trading below the 200-Day moving average of $3.51. The stock is down 32% in the past 3-month.