Babcock & Wilcox (BW) has surged nearly 700% in the past year, reaching a new 5-year high of $10.97. Despite this, earnings and revenue are expected to decrease this year. Morningstar warns that BW is 79% overvalued with weak financial health, advising caution for risk-averse investors.

Valued at $1.16 billion, BW offers energy technology and services for nuclear, fossil, and renewable power markets. The stock hit a new 5-year high of $10.97 on Jan. 28 and has a 100% “Buy” opinion from Barchart. It is up 684.68% in the past 52 weeks with a Trend Seeker “Buy” signal.

Babcock has a Weighted Alpha of +384.64 and a Trend Seeker “Buy” signal intact. The stock recently traded at $9.89 with a 50-day moving average of $6.79. It has made 15 new highs and is up 75.63% over the past month. The Relative Strength Index (RSI) is at 70.34 with a technical support level around $10.05.

Revenue for BW is expected to decrease by 13.07% this year but increase by 6.69% next year. Earnings are projected to decrease by 64.60% this year and increase by 103.81% next year. Analysts give the stock 3 “Strong Buy” and 2 “Hold” ratings with price targets between $6 and $10.

Morningstar believes the stock is 79% overvalued and warns of weak financial health. Value Line rates it “Above Average,” CFRA’s Market Scope rates it a “Hold.” This is not a stock for cautious investors as short interest is high at 10.97% of the float.

Read more at Yahoo Finance: This Energy Stock Is Up 700%, But I Wouldn’t Touch It with a 10-Foot Pole