Core Laboratories (CLB) AI Stock Analysis

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Core Laboratories

(NYSE:CLB)

Rating:61Neutral

Price Target:―

Core Laboratories' stock score reflects its stable financial performance and effective cash flow management. However, technical indicators suggest bearish trends, and valuation appears moderate with a low dividend yield. Recent earnings call data points to both strategic improvements and significant external challenges. The stock's potential recovery is contingent on overcoming geopolitical and market hurdles.

Positive Factors

Financial Performance

The target price for the stock has been raised to $16, indicating improved cash dynamics over time.

Geopolitical Factors

Potential easing of geopolitical tensions between Russia and Ukraine could serve as a positive catalyst for the company.

Research and Development

The Research and Development division is expected to grow, likely outpacing international upstream capital expenditure growth.

Negative Factors

Business Performance

Production Enhancement has shrunk to just 11% of total company operating income, indicating challenges in that segment.

Core Laboratories (CLB) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$508.68M

Dividend Yield0.37%

Average Volume (3M)531.36K

Price to Earnings (P/E)18.2

Beta (1Y)0.86

Revenue Growth1.32%

EPS Growth-33.17%

CountryUS

Employees3,400

SectorEnergy

Sector Strength45

IndustryOil & Gas Equipment & Services

Share Statistics

EPS (TTM)0.14

Shares Outstanding46,882,935

10 Day Avg. Volume387,747

30 Day Avg. Volume531,361

Financial Highlights & Ratios

PEG Ratio-1.83

Price to Book (P/B)2.14

Price to Sales (P/S)0.00

P/FCF Ratio12.40

Enterprise Value/Market Cap1.38

Enterprise Value/Revenue0.34

Enterprise Value/Gross Profit8.02

Enterprise Value/Ebitda2.54

Forecast

1Y Price Target

$13.00

Price Target Upside15.76% Upside

Rating ConsensusModerate Sell

Number of Analyst Covering3

Core Laboratories Business Overview & Revenue Model

Company DescriptionCore Laboratories N.V. provides reservoir description and production enhancement services and products to the oil and gas industry in the United States, Canada, and internationally. It operates through Reservoir Description and Production Enhancement segments. The Reservoir Description segment includes the characterization of petroleum reservoir rock, reservoir fluid, and gas samples to enhance production and improve recovery of oil and gas from its clients' reservoirs. It offers laboratory-based analytical and field services to characterize properties of crude oil and oil delivered products; and proprietary and joint industry studies. The Production Enhancement segment provides services and products relating to reservoir well completions, perforations, stimulations, and production. It offers integrated diagnostic services to evaluate and monitor the effectiveness of well completions and to develop solutions to improve the effectiveness of enhanced oil recovery projects. In addition, the company markets and sells its products through a combination of sales representatives, technical seminars, trade shows, and print advertising, as well as through distributors. It operates approximately in 50 countries. The company was founded in 1936 and is based in Amstelveen, the Netherlands.

How the Company Makes MoneyCore Laboratories generates revenue primarily through its two main business segments: Reservoir Description and Production Enhancement. The Reservoir Description segment provides laboratory-based analytical and field services to characterize and evaluate the properties of oil and gas reservoirs. This includes services such as core and fluid analysis, which are critical for understanding reservoir conditions and maximizing resource extraction. The Production Enhancement segment focuses on providing technologies and services that improve the efficiency and output of oil and gas wells. This includes services like hydraulic fracturing diagnostics and well perforation. Core Laboratories also benefits from long-term contracts and strategic partnerships with major oil companies, which ensure a steady revenue stream. The company's emphasis on proprietary technologies and innovation is a significant factor in maintaining its competitive edge and driving its earnings.

Core Laboratories Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q1-2025)

% Change Since: -6.88%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

The earnings call discussed both positive steps towards operational improvements and strategic focuses that are expected to improve future performance, alongside significant challenges posed by geopolitical conflicts and sanctions impacting revenue and margins. The company's efforts in cost reduction and market expansion were highlighted, but the immediate financial results were negatively impacted by external factors.

Q1-2025 Updates

Positive Updates

Operational Improvements and Strategic Focus

Core Labs continued to strengthen its balance sheet by reducing net debt by approximately $5 million and maintaining the lowest leverage ratio in eight years. The company also repurchased nearly 132,000 shares of company stock at a value of $2 million, focusing on deleveraging and returning excess free cash to shareholders.

Production Enhancement Margin Growth

Operating margins in production enhancement expanded by 450 basis points to 8% due to increased demand for high-margin diagnostic services in the U.S., especially in complex well completions and catch-up work in the Gulf of Mexico.

Cost Reduction Initiatives

Core Labs has implemented cost reduction plans to mitigate revenue loss, which includes employee severance and exiting certain facilities, expecting these cost efficiencies to improve margins in future quarters.

New Client Engagements and Market Opportunities

Core Labs is expanding its presence in Africa and Libya, collaborating with local entities and leveraging its knowledge of the region's sedimentary basins, which is expected to drive long-term growth.

Negative Updates

Revenue and Income Decline

First quarter 2025 revenue decreased by 4% compared to Q4 of 2024, with operating income and earnings per share also down sequentially. The revenue was down 5% year over year, impacted by geopolitical conflicts and expanded sanctions.

Geopolitical and Sanction Challenges

Expanded sanctions affected revenue and operational efficiency, particularly in reservoir description and production enhancement segments, causing a temporary halt in trading activities and demand for assay services.

Product Sales Decline

Product sales were down 13% sequentially and 14% year over year, impacted by expanded sanctions and the delay of large international orders.

Operating Margin Pressure

Reservoir description margins decreased by 670 basis points to 10% due to high decrementals and geopolitical headwinds, despite operational leadership's steps to realign the cost structure.

Company Guidance

During the Core Laboratories N.V. first quarter 2025 earnings call, the company provided detailed guidance and financial metrics. Revenue for the first quarter was $123.6 million, down 4% sequentially and 5% year over year, impacted by geopolitical conflicts and expanded sanctions. Operating income was $11.8 million, with operating margins of approximately 10%, and a net loss of $200,000 on a GAAP basis. Service revenue was $95.1 million, while product sales were $28.5 million. The company projected second-quarter 2025 revenue to range from $128 million to $134 million, with operating income of $13.1 million to $15.7 million, yielding operating margins of approximately 11%. Earnings per share for the second quarter are expected to range from $0.17 to $0.21. Core Labs aims to maintain a focus on reducing debt, with net debt reduced by approximately $5 million in the first quarter, and strengthening its balance sheet while continuing to return excess free cash to shareholders.

Core Laboratories Financial Statement Overview

Summary

Core Laboratories has strong profitability and cash flow management, with solid gross and net profit margins. The balance sheet shows manageable leverage, but there are concerns about potential leverage risks. Overall, the financial performance is stable, but revenue growth needs attention.

Income Statement

Positive

Core Laboratories shows solid profitability with a gross profit margin of 36.8% and a net profit margin of 5.4% for TTM. The revenue growth has been stable, with a slight decline recently, but overall EBIT and EBITDA margins remain healthy, indicating efficient operations.

Balance Sheet

Positive

The company has a moderate debt-to-equity ratio of 0.17, reflecting manageable leverage. The return on equity is favorable at 10.8%, suggesting effective use of equity. However, the equity ratio stands at a moderate 43.8%, implying potential leverage risks if not managed carefully.

Cash Flow

Very Positive

Core Laboratories has shown strong cash flow management, with a significant operating cash flow to net income ratio of 2.05, indicating robust cash generation relative to earnings. Free cash flow has also grown, supporting financial stability and operational flexibility.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
517.80M	523.85M	509.79M	489.74M	470.25M	487.27M
	Gross Profit
87.57M	88.37M	94.05M	78.92M	83.84M	91.63M
	EBIT
52.01M	58.56M	54.64M	41.52M	45.26M	55.77M
	EBITDA
66.80M	73.27M	70.42M	58.69M	63.78M	-56.50M
	Net Income Common Stockholders
28.03M	31.40M	36.67M	19.45M	19.73M	-97.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
22.11M	19.16M	15.12M	15.43M	17.70M	13.81M
	Total Assets
591.52M	590.41M	586.39M	578.35M	580.85M	568.58M
	Total Debt
180.00M	180.14M	215.38M	222.39M	250.26M	326.98M
	Net Debt
157.90M	160.99M	200.26M	206.96M	232.56M	313.17M
	Total Liabilities
332.16M	332.67M	356.59M	389.40M	419.85M	493.01M
	Stockholders Equity
253.39M	251.99M	224.81M	188.95M	161.00M	75.57M
Cash Flow		Free Cash Flow
43.90M	43.36M	14.21M	14.74M	23.04M	45.99M
	Operating Cash Flow
57.43M	56.39M	24.79M	24.96M	36.58M	57.87M
	Investing Cash Flow
-3.99M	-6.39M	-6.65M	-3.86M	-10.22M	7.85M
	Financing Cash Flow
-46.64M	-45.96M	-18.45M	-23.38M	-22.46M	-63.01M

Core Laboratories Technical Analysis

Technical Analysis Sentiment

Negative

Last Price11.23

Price Trends

50DMA

12.72

Negative

100DMA

14.88

Negative

200DMA

16.95

Negative

Market Momentum

MACD

-0.40

Positive

RSI

42.39

Neutral

STOCH

18.08

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CLB, the sentiment is Negative. The current price of 11.23 is below the 20-day moving average (MA) of 11.64, below the 50-day MA of 12.72, and below the 200-day MA of 16.95, indicating a bearish trend. The MACD of -0.40 indicates Positive momentum. The RSI at 42.39 is Neutral, neither overbought nor oversold. The STOCH value of 18.08 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CLB.

Core Laboratories Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NESR	67 Neutral	$558.37M	―	1.53%	―	―	―
MRC	65 Neutral	$1.09B	41.18	8.29%	―	-9.84%	-111.71%
TTI	64 Neutral	$364.62M	3.27	55.55%	―	-4.08%	429.70%
CLB	61 Neutral	$508.68M	18.15	11.54%	0.37%	1.32%	-33.17%
OIS	60 Neutral	$269.75M	50.29	0.75%	―	-9.04%	―
Sector *	57 Neutral	$7.06B	3.04	-3.49%	5.80%	0.53%	-50.39%
PUMP	53 Neutral	$579.82M	―	-16.24%	―	-13.32%	-309.35%

* Energy Sector Average

Performance Comparison

CLB

Core Laboratories

11.23

-7.27

-39.30%

MRC

MRC Global

12.62

-0.49

-3.74%

OIS

Oil States International

4.44

-0.23

-4.93%

TTI

Tetra Technologies

2.77

-1.02

-26.91%

PUMP

Propetro Holding

5.66

-4.16

-42.36%

NESR

National Energy Services Reunited

6.37

-3.33

-34.33%

Core Laboratories Corporate Events

Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures

Core Laboratories Reports Q1 2025 Financial Results

Neutral

Apr 23, 2025

On April 23, 2025, Core Laboratories announced a quarterly cash dividend and reported its first quarter 2025 financial results. The company experienced a decline in revenue and operating income due to geopolitical conflicts and sanctions affecting demand for its services. Despite these challenges, Core Labs engaged new clients in the Middle East and Africa, and continued to innovate with its proprietary technologies. The company also reduced its net debt and repurchased shares, while focusing on growth opportunities in unconventional plays and geothermal projects.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.