Strength Seen in Prairie Operating Co. (PROP): Can Its 26.8% Jump Turn into More Strength?

Prairie Operating Co. (PROP Quick QuotePROP – Free Report) shares soared 26.8% in the last two trading sessions to close at $9.50. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock’s 46.2% gain over the past four weeks.

The surge can be attributed to a favorable commodity price environment and Prairie’s strong presence in the D-J Basin of the United States. The company owns 30,000 net acres in the D-J Basin. Recently, the company entered an agreement to acquire certain assets in the D-J Basin from Bayswater Exploration and Production. The acquisition adds 24,000 net acres in the Weld County, complimenting Prairie’s existing acreage within the D-J Basin. This acquisition is expected to expand the company’s resource base and potential production capacity. This acquisition enhances Prairie’s existing acreage, expands its resource base, and increases its production potential. Additionally, the acquisition aligns with the company’s low-cost operating strategy, with breakeven costs as low as $43.80 per barrel in Weld County. The company’s expansion in the D-J Basin, coupled with the favorable commodity price environment, has been significant revenue drivers.

This company is expected to post quarterly loss of $0.12 per share in its upcoming report, which represents a year-over-year change of +83.1%. Revenues are expected to be $12.02 million, up 1,220.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Prairie Operating Co., the consensus EPS estimate for the quarter has seen one downward revision over the last 30 days. And a stock’s price usually doesn’t keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on PROP going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>

Prairie Operating Co. is a member of the Zacks Oil and Gas – Integrated – United States industry. One other stock in the same industry, DT Midstream (DTM Quick QuoteDTM – Free Report) , finished the last trading session 1.2% lower at $98.75. DTM has returned -4.6% over the past month.

For DT Midstream, the consensus EPS estimate for the upcoming report has seen two downward revisions over the past month at $0.91. This represents a change of -26.6% from what the company reported a year ago. DT Midstream currently has a Zacks Rank of #2 (Buy).