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Innovex International (INVX)
NYSE:INVX

Innovex International (INVX) AI Stock Analysis

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Innovex International

(NYSE:INVX)

77Outperform
Innovex International's overall score reflects its strong financial performance and positive earnings call insights. While the stock is attractively valued, technical analysis indicates potential short-term bearish momentum. The company's strategic initiatives and shareholder-focused actions further bolster its position, albeit with some operational challenges.

Innovex International (INVX) vs. S&P 500 (SPY)

Innovex International Business Overview & Revenue Model

Company DescriptionDril-Quip, Inc., together with its subsidiaries, designs, manufactures, sells, and services engineered drilling and production equipment for offshore and onshore applications worldwide. The company's principal products include subsea and surface wellheads, specialty connectors and associated pipes, subsea production trees and systems, mudline hanger systems, production riser systems, dry tree systems, subsea manifolds, line hangers and expandable liner systems, multi-frac well connections, conventional wellheads, thermal wellheads, completion packers, and safety and kelly valves; and rig equipment comprises drilling riser systems, wellhead connectors, diverters, and cement manifolds. It also provides technical advisory assistance, and rework and reconditioning services, as well as rental and purchase of running tools for use in the installation and retrieval of its products; equipment installation and monitoring, storage, maintenance, and repair services; and downhole tools comprise of liner hangers, production packers, safety valves, and specialty downhole tools that are used to hang-off and seal casing into a previously installed casing string in the well bore. The company's products are used in the exploration and production of oil and gas from offshore drilling rigs, such as floating rigs and jack-up rigs; and for drilling and production of oil and gas wells on offshore platforms, tension leg platforms, Spars, and moored vessels, such as floating production, storage, and offloading monohull moored vessels. It sells its products directly through its sales personnel, independent sales agents, and representatives to integrated, independent, and foreign national oil and gas companies, as well as drilling and other oilfield contractors, and engineering and construction companies. Dril-Quip, Inc. was founded in 1981 and is headquartered in Houston, Texas.
How the Company Makes MoneyInnovex International generates revenue through a multi-faceted business model that includes software licensing, subscription services, and consultancy fees. The company's software solutions are often licensed to businesses on a subscription basis, providing a steady stream of recurring revenue. Additionally, Innovex offers bespoke consultancy services, assisting organizations in implementing and optimizing technology solutions, which is another significant revenue stream. The company also benefits from strategic partnerships with leading technology firms, enhancing its market reach and service offerings. These partnerships often involve collaborative projects and co-developments, contributing to Innovex's earnings. Furthermore, Innovex capitalizes on emerging technology trends by consistently innovating and expanding its portfolio of solutions, which helps maintain its competitive edge and revenue growth.

Innovex International Financial Statement Overview

Summary
Innovex International demonstrates strong financial health with significant revenue growth and improved profit margins. The balance sheet is solid, reflecting low leverage and effective use of equity. Cash flow is strengthening with positive free cash flow. Overall, financial performance indicates robust operational and strategic management, with room for further cash flow improvements.
Income Statement
82
Very Positive
Innovex International shows a robust revenue growth of 49.25% in TTM compared to the previous year, indicating strong top-line expansion. The gross profit margin stands at a healthy 32.61%, and the net profit margin has improved significantly to 14.62%. EBIT and EBITDA margins are 2.46% and 20.23% respectively, showing operational efficiency improvements. The company has turned around from past losses to posting substantial net income, reflecting effective cost management.
Balance Sheet
78
Positive
The balance sheet is solid with a low debt-to-equity ratio of 0.095, indicating conservative financial leverage. Return on Equity (ROE) is impressive at 9.66%, a significant recovery from previous lows, showing effective use of shareholders' capital. The equity ratio is strong at 80.03%, highlighting a robust financial structure with adequate equity coverage for liabilities.
Cash Flow
75
Positive
Innovex International's cash flow is strengthening, with a notable improvement in free cash flow from negative in 2023 to positive in TTM, showcasing better cash management. The operating cash flow to net income ratio is 0.48, which implies that a substantial portion of net income is being converted into cash. The free cash flow to net income ratio is 0.26, indicating positive but moderate free cash flow generation relative to net income.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
660.80M424.06M467.19M294.84M364.97M
Gross Profit
232.63M115.41M157.15M87.40M95.09M
EBIT
49.08M97.28M76.55M14.08M-18.70M
EBITDA
184.77M129.93M95.43M33.59M-29.04M
Net Income Common Stockholders
140.32M73.93M63.28M9.85M-30.77M
Balance SheetCash, Cash Equivalents and Short-Term Investments
73.28M7.41M8.42M9.74M345.95M
Total Assets
1.20B1.03B436.29M284.89M1.15B
Total Debt
91.07M84.91M81.40M35.24M1.25M
Net Debt
17.79M77.50M72.98M25.50M-344.70M
Total Liabilities
239.33M146.38M185.01M104.34M109.64M
Stockholders Equity
958.16M328.92M251.28M180.55M1.04B
Cash FlowFree Cash Flow
79.84M-24.90M-15.39M-8.47M-33.03M
Operating Cash Flow
93.44M75.86M-5.81M-2.02M-21.09M
Investing Cash Flow
78.44M-79.81M-37.52M-22.06M-5.63M
Financing Cash Flow
-103.07M-124.00K42.28M10.05M-25.18M

Innovex International Technical Analysis

Technical Analysis Sentiment
Negative
Last Price15.36
Price Trends
50DMA
16.83
Negative
100DMA
16.07
Negative
200DMA
15.87
Negative
Market Momentum
MACD
-0.34
Negative
RSI
44.59
Neutral
STOCH
41.66
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INVX, the sentiment is Negative. The current price of 15.36 is above the 20-day moving average (MA) of 15.26, below the 50-day MA of 16.83, and below the 200-day MA of 15.87, indicating a neutral trend. The MACD of -0.34 indicates Negative momentum. The RSI at 44.59 is Neutral, neither overbought nor oversold. The STOCH value of 41.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for INVX.

Innovex International Peers Comparison

Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$1.07B8.4310.07%49.31%10605.17%
RERES
73
Outperform
$1.07B13.807.06%3.38%-9.78%-49.45%
MRMRC
68
Neutral
$1.01B39.4310.01%-9.17%-71.36%
68
Neutral
$961.21M18.883.73%13.22%
HLHLX
66
Neutral
$950.10M11.425.64%0.34%
63
Neutral
$1.04B28.953.91%3.05%-8.41%-58.49%
56
Neutral
$6.92B3.31-4.49%6.03%-0.35%-47.83%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
INVX
Innovex International
15.36
-3.24
-17.42%
HLX
Helix Energy
6.27
-4.68
-42.74%
MRC
MRC Global
11.69
0.18
1.56%
RES
RPC
4.86
-1.74
-26.36%
XPRO
Expro Group Holdings
8.33
-11.11
-57.15%
WTTR
Select Energy Services
8.72
-0.28
-3.11%

Innovex International Earnings Call Summary

Earnings Call Date:Feb 25, 2025
(Q4-2024)
|
% Change Since: -4.83%|
Next Earnings Date:May 06, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong overall performance with significant revenue growth and successful mergers and acquisitions. The company achieved synergy targets ahead of schedule and maintained a strong financial position. However, there are some challenges, including a decline in certain revenue segments and operational inefficiencies that are being addressed.
Q4-2024 Updates
Positive Updates
Record Revenue Growth
Fourth quarter revenue was $251 million, an increase of 89% year over year and 65% sequentially, driven by the Dril-Quip and DWS acquisitions.
Successful Acquisition Strategy
The acquisition of Downhole Well Solutions and SCF Machining Corporation were completed, enhancing market reach and improving gross margins.
Strong Cash Flow and Financial Position
Free cash flow for Q4 2024 was $29 million, with year-end total debt of $35 million and $73 million of cash, resulting in a net cash position.
Achievement of Synergy Targets
Achieved the $30 million synergy target from the Dril-Quip merger faster than expected, with further cost savings anticipated.
Share Repurchase Program
Board authorization of a $100 million share repurchase program to enhance shareholder returns.
Negative Updates
Decline in NAM Land Revenue
2024 NAM Land revenue decreased by 6% compared to 2023 due to a 13% decline in US land recount.
Challenges in International and Offshore Revenue
2024 international and offshore revenue declined 5% from 2023, primarily due to a slowdown in legacy Dril-Quip business.
Eldridge Facility Sale
Announcement to divest the Eldridge facility to improve efficiency, although it indicates current inefficiencies in the operational footprint.
Short-term Challenges with ERP Implementation
The implementation of Innovex ERP system may result in short-term challenges, although it is expected to improve operations long-term.
Company Guidance
During Innovex's fourth quarter and full year 2024 earnings call, the company discussed a range of guidance metrics. Innovex reported a full year 2024 revenue of $661 million, marking a 19% increase year-over-year, with a significant contribution from the Dril-Quip merger. Fourth quarter revenue reached $251 million, an 89% year-over-year increase. The company highlighted its EBITDA margin growth from 18% in Q3 to 20% in Q4, driven by merger synergies. Innovex achieved its $30 million annualized cost synergy target swiftly post-merger. They maintained a strong balance sheet, ending the year with $35 million in total debt and $73 million in cash equivalents. Innovex's return on capital employed (ROCE) improved to 12%, with a long-term target in the high teens. For Q1 2025, Innovex expects adjusted EBITDA between $45 million and $50 million on revenues of $245 million to $255 million. They also announced a $100 million share repurchase program to enhance shareholder returns, showcasing a strategic capital allocation approach balancing M&A opportunities and shareholder returns.

Innovex International Corporate Events

M&A TransactionsStock BuybackBusiness Operations and StrategyFinancial Disclosures
Innovex International Sells Houston Facility for $95 Million
Positive
Apr 25, 2025

On April 21, 2025, Innovex International announced a definitive agreement to sell its Eldridge facility in Houston, Texas, to BIG Acquisitions LLC for $95 million, with the sale expected to close in the third quarter of 2025. This transaction is part of Innovex’s strategy to transform its business, with CEO Adam Anderson highlighting the sale as a significant milestone that will reduce the company’s operating footprint in Houston by 82%, improve delivery and responsiveness, and strengthen its balance sheet. The proceeds will support a $100 million share buyback and potential M&A activities. Despite a decline in Q1 2025 revenue, Innovex anticipates adjusted EBITDA between $44-$46 million, demonstrating resilience in uncertain market conditions.

Spark’s Take on INVX Stock

According to Spark, TipRanks’ AI Analyst, INVX is a Outperform.

Innovex International’s stock is supported by strong financial performance, highlighted by robust revenue growth and effective cost management. The successful execution of mergers and the achievement of synergy targets are significant positives. However, technical analysis signals indicate a bearish trend, which moderates the overall score. The stock is attractively valued with a low P/E ratio, although the lack of dividend yield may deter some investors. The earnings call provides a positive outlook, despite some operational challenges being addressed.

To see Spark’s full report on INVX stock, click here.

M&A TransactionsStock BuybackBusiness Operations and StrategyFinancial Disclosures
Innovex International Reports Strong Q4 2024 Financial Results
Positive
Feb 25, 2025

On February 25, 2025, Innovex International announced its financial results for the fourth quarter and full year of 2024, highlighting a significant revenue increase of 65% quarter over quarter to $251 million. The company reported a net income of $32 million and an adjusted EBITDA of $49 million. Key strategic moves included the acquisition of Downhole Well Solutions and SCF Machining Corp, aimed at enhancing margins and supply chain flexibility. Innovex also announced a $100 million share buyback authorization, reflecting its strong financial position and commitment to returning capital to shareholders. The company achieved its merger cost synergy target of $30 million sooner than expected and continues to focus on organic growth and expanding its market presence through strategic partnerships.

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.