Offshore Drilling Innovator Expro Pumps Up Buy Zone With 750% Growth

After pumping out 750% earnings growth in Q2, offshore drilling innovator Expro (XPRO) looks to fuel even more profits in Q3. Now Wall Street forecasts of 481% EPS growth for the full year have XPRO stock exploring a new buy point. But that entry is getting put to the test as selling pressure puts the Nasdaq on the ropes.

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A leader in the Oil & Gas-Field Services group along alongside Tidewater (TDW) and SLB (SLB), Expro earns a 97 Composite Rating, indicating it’s outpacing 97% of all stocks.

SLB stock — featured on Aug. 2 and again yesterday as the IBD Stock Of The Day — has just drilled into a buy zone of its own.

The Oil & Gas-Field Services industry ranks a solid No. 38 among the 197 groups IBD tracks. That’s up from No. 158 three months ago, powered by nice gains in Tidewater, SLB and Expro.

Like TDW and SLB stock, Expro has seen its relative strength line jump sharply, a sign of market leadership.

Expro Primes Another Offshore Drilling Innovation

With roots dating to 1938, Expro employs roughly 7,600 people, providing services and solutions to leading exploration and production companies in around 60 countries. The company operates in both onshore and offshore environments, with some 70% of revenue generated from the offshore drilling sector.

Expro has expertise in well construction, well flow management and production and subsea well access. Including 11% from its Subsea Well Access business, 62% of Expo’s revenue comes from Well Management. Well Construction accounts for the remaining 38%.

In Q2, Expro fueled $396 million in revenue, a 27% year-over-year gain. Earnings growth spiked 750% to 17 cents a share. Analysts forecast 657% EPS growth in Q3, leading to a 481% gain for the year. Wall Street expects 68% earnings growth in 2024.

Last month, Expro announced its first contract for advanced subsea technology. The innovation is around a single shear and seal bidirectional valve that supports well safety and helps to reduce costs. Valued at over $15 million, the three-year contract reinforces Expro’s stature as the leading provider of rental and customized subsea well access solutions.

Expro’s report card in IBD Stock Checkup points to strong institutional demand. XPRO stock sports a B+ Accumulation/Distribution Rating, 2.0 up/down volume ratio and four quarters of rising fund ownership.

XPRO Stock Tests Breakout As Market Shows Mixed Action

Following in the footsteps of Tidewater and SLB stock, Expro has just launched a new breakout.

The move comes as the Nasdaq tries to hold support at its 50-day moving average.

As the tech-heavy index continues to get tested this week, Expro has now slipped below the 23.72 buy point in a cup with handle it cleared on Thursday. Volume on the initial breakout was an impressive 232% higher than normal. Downside volume Friday came in slightly around 38% above average — considerably lighter than Thursday’s breakout volume.

A better-than-expected inflation report gave the market indexes a boost, although they struggled to hold those gains by the end of the session. The market remained mixed Friday, with the S&P and Dow up while the Nasdaq struggles.

As Expro tests its recent entry, SLB stock remains in buy range while Tidewater has entered the 20%-25% profit-taking zone.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.

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