Carrizo Oil & Gas, Inc. (CRZO) Shares Have Potential 224.85% Upside

Carrizo Oil & Gas, Inc. (NASDAQ:CRZO) is now being followed by KeyBanc Capital Mkts, as they initiated the stock at Overweight on January 31. Analysts at CapitalOne, shed their positive views on December 20 by lowering it fromOverweight to Equal Weight. The stock lost favor of Tudor Pickering analysts who expressed their lack of confidence in it using a downgrade from Buy to Hold on December 14. Seaport Global Securities analysts came out with bearish views on December 10 when the call was made. They think the stock is now Neutral compared to to their prior call for Buy.

CRZO stock rose 0.71% in recent trade and currently has a stock-market value of $1.09B. The shares finished at $11.39, after trading as low as $11.34 earlier in the session. It hit an intraday high Thursday at $11.67. Trading activity significantly weakened as the volume at ready counter decreased to 2,562,002 shares versus 3,401,310 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 3,300,892 shares. The stock is now 17.79% above against its bear-market low of $9.67 on December 26, 2018. It has retreated -177.17% since it’s 52-week high of $31.57 reached in July. Now the market price is down -25.8% on the year and up 0.89% YTD.

Wall Street’s most bullish Carrizo Oil & Gas, Inc. (NASDAQ:CRZO) analysts are predicting the share price to blow past $37 per share during the next 12 months. The current median share price forecast by them is $17.5, suggesting that the stock could increase 53.64% in that time frame. The average price target of $19.07 calls for a nearly 67.43% increase in the stock price.

Carrizo Oil & Gas, Inc. (CRZO)’s 50 day simple moving average (SMA 50) price is $11.8 and its 200-day simple moving average (SMA 200) price is $19.9. The company’s stock currently has a total float of 87.35M shares. Its weekly volatility is hovering around 4.24% and felt 4.83% volatility in price over a month. On the upside, the share price will test short term resistance at around $11.59. On a downside, the stock is likely to find some support, which begins at $11.26. The failure to get near-term support could push it to $11.14.

When looking at valuations, Carrizo Oil & Gas, Inc. (CRZO) has a cheap P/E of 2.75x as compared to industry average of 14.33x. Moreover, it trades for 3.99 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.06x price/book and 1.03x price/sales. Compared to others, Carrizo Oil & Gas, Inc. is in a different league with regards to profitability, having net margins of 35.3%. To put some perspective around this, the industry’s average net margin is 17.83%. CRZO’s ROE is 59.7%, which is also considerably better than the industry’s ROE of 18.52%. It’s also not liquid in the near term, with a current ratio of 0.5. The stock has a debt/capital of 1.67.

CRZO last reported earnings that receded expectations. The company raked in $0.56 per share, 1020% change on the same period last year. That was worse than consensus for $0.56. Revenue for the recent quarter stood at $273.31 million, up 11% on last year and above the $263.32 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $199 million to $242 million, which should be compared with $276.53 million generated last year. EPS is seen in a range of $0.18 to $0.55, against the $0.77 reported a year ago.