Downgrade Hits Smart Sand Inc (NASDAQ:SND)

Smart Sand Inc (NASDAQ:SND)

Smart Sand Inc (NASDAQ:SND) shares dipped after a Credit Suisse analyst downgraded the shares from an “Outperform” to a “Neutral”. Shares closed on Wednesday at $7.87 and then gapped down to open at $7.06 before hitting the daily low of $6.56. Volumes for shares of the basic materials company were heavy – about three times their daily average.

Smart Sand Inc (NASDAQ:SND) is a producer of Northern White raw frac sand which is used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. Smart Sand Inc (NASDAQ:SND) sells to oil and natural gas exploration and production companies and oilfield service companies. Contracts are usually a combination of long-term take-or-pay contracts and open-market spot sales. Smart Sand owns and operates a raw frac sand mine and related processing facility near Oakdale, Wisconsin. Smart Sand Inc (NASDAQ:SND) also operates a second property in Jackson County, Wisconsin, known as Hixton site.

Before today, most analysts had a price target on SND in the mid-teens. The latest price target from Credit Suisse gives the shares a price target of $8.50. At the end of February, Smart Sand Inc (NASDAQ:SND) traded near $22 but since then the stock has been on a steady slide. Performance reflects the situation as YTD SND shares have lost over 50%. Based on today’s closing, the shares hit a new 52-week low today of $6.82.

Smart Sand Inc (NASDAQ:SND) had sales of $47.7 million in 2015 and that figure increased to $59.2 million for 2016. A similar experience was had by shareholders as the 2015 EPS was $0.34 and that expanded to $0.43 for 2016.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Smart Sand Inc (NASDAQ:SND) Announces Revenues Of $25.0 Million In Q1 2017

Smart Sand Inc (NASDAQ:SND)

Smart Sand Inc (NASDAQ:SND) has announced its financial results for Q1 2017. In a statement, Smart Sand Chief Executive Officer Charles Young said the company produced strong results in Q1 2017 on the back of increased sales volume. He added that the sales improvement is a clear indication of significant market improvement in the gas and oil industry.

Smart Sand Inc (NASDAQ:SND) reported around $25 million in revenue in Q1 2017 compared to $10.4 million that was reported during the same period of the previous financial year. This represents a 141% increase year over year. The increase resulted from increase in sales volume. The company revenue in Q1 2017 dropped by 15% compared to $29.5 million that was reported in Q4 2016. The drop is as a result of shortfall in payments reported in Q4 2016 which was partially offset by increase in sales volume.

In Q1 2017, Smart Sand Inc (NASDAQ:SND) sold a total of 558,500 tons as compared to around 129,300 tons that were sold in Q1 2016 and 274,500 tons sold in Q4 2016. This represent 332% and 103% increases respectively.

During the quarter, the company reported $1.0 million or $0.02 per share in net income compared to $0.4 million or $0.02 per share in net income reported in Q1 2016. The company reported $12.4 or $0.32 per share in net income in Q4 2016.

The company’s Adjusted EBITDA in Q1 2017 stood at $3.7 million compared to $4.7 million that the company reported in Q12016 and 27.0 million in Q4 2016. This represents a 21% and 86% drop respectively. The year-over-year drop is attributed to shortfall payments that the company reported in Q1 2016 and which resulted from renegotiations of customer contracts. The company recorded a drop in payments in Q1 2017. The drop in Adjusted EBITDA in Q1 2017 was mainly as a result of shortfall payments plus other income earned from the assignment of a bankruptcy status in the previous quarter.

The reported $1.6 million in total capital expenditure for the three months ended March 31, 2017. The expenditures were mainly attributed to Smart Sand Inc (NASDAQ:SND)’s investment in several enhancement and cost improvement programs. According to the company’s estimates, capital expenditure for the whole current financial year will be around $85 million, an increase from the $55 million that the company had previously projected. The upward revision in expected capital expenditure is a result of plans to expand the Oakdale facility to a capacity of 5.5 million tons annually.

Smart Sand Inc (NASDAQ:SND) lost 6.30% in the previous trading session to close at $9.37 on a volume of 591,415 shares.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.