Shares of oilfield service provider Dawson Geophysical Co. fell almost 10 percent Wednesday after an analyst said most of the company's growth potential is already priced into the stock.
Jefferies & Co. analyst Cindy Du began covering the Midland, Texas-based company, which collects and processes data to assess underground oil and natural gas deposits, with a "Hold" rating. Her target stock price of $72 suggested less than a 5 percent gain from Tuesday's close.
"Notwithstanding our solid outlook for seismic in the U.S., we believe that most of the upside for growth expectations is priced in and the price is nearing full valuation," Du wrote in a note to investors.
Demand for seismic service has come back in the U.S. land market over the past four years, and Dawson has boosted its workforce to keep up, Du said. However, the analyst predicted the rapid rise in the company's revenue could moderate as Dawson pulls back on future crew expansion plans.
"We believe the stock is currently fully valued," she added.
Dawson shares fell $6.75, or 9.8 percent, to close at $62.02 Wednesday. The stock has traded as low as $46.45 and as high as $85.67 over the past year.
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