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Nabors Industries (NBR)
NYSE:NBR
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Nabors Industries (NBR) AI Stock Analysis

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NBR

Nabors Industries

(NYSE:NBR)

Rating:50Neutral
Price Target:
$32.00
▲(0.85% Upside)
Nabors Industries' overall stock score is primarily impacted by its weak financial performance and valuation concerns. Despite some positive developments from recent acquisitions and corporate events, the high debt levels and negative profitability weigh heavily on the stock's outlook. Technical indicators and earnings call insights provide some balance, but the financial challenges remain the most significant factor.
Positive Factors
Acquisition Impact
The Parker acquisition adds Quail Tools, a premier tubular rental franchise, while also adding some US and international rigs.
Financial Performance
NBR expects the acquisition to add $190mn of run-rate EBITDA, while being free cash flow accretive in year 1.
Negative Factors
Earnings Outlook
4Q EBITDA misses by 2%, guides 1Q25 lower by 6%.
Investor Sentiment
Investors remain skeptical about management's expectation to be FCF positive and reduce debt by $150mn in 2025.

Nabors Industries (NBR) vs. SPDR S&P 500 ETF (SPY)

Nabors Industries Business Overview & Revenue Model

Company DescriptionNabors Industries Ltd. provides drilling and drilling-related services for land-based and offshore oil and natural gas wells. The company operates through five segments: U.S. Drilling, Canada Drilling, International Drilling, Drilling Solutions, and Rig Technologies. It provides tubular running, wellbore placement, directional drilling, measurement-while-drilling (MWD), equipment manufacturing, and rig instrumentation services; and logging-while-drilling systems and services, as well as drilling optimization software. The company also offers REVit, an automated real time stick-slip mitigation system; ROCKit, a directional steering control system; SmartNAV, a collaborative guidance and advisory platform; SmartSLIDE, an advanced directional steering control system; and RigCLOUD, which provides the tools and infrastructure to integrate applications to deliver real-time insight into operations across the rig fleet. In addition, it manufactures and sells top drives, catwalks, wrenches, drawworks, and other drilling related equipment, such as robotic systems and downhole tools; and provides aftermarket sales and services for the installed base of its equipment. As of December 31, 2021, the company marketed approximately 301 rigs for land-based drilling operations in the United States, Canada, and in 20 other countries worldwide; and 29 rigs for offshore platform drilling operations in the United States and internationally. Nabors Industries Ltd. was founded in 1952 and is based in Hamilton, Bermuda.
How the Company Makes MoneyNabors Industries generates revenue primarily through its drilling services, which include the operation of drilling rigs and the provision of associated services such as rig management and maintenance. Key revenue streams include contracts for land and offshore drilling, performance-based services, and the sale of proprietary technologies and equipment. The company also benefits from long-term contracts with major oil and gas operators, which provide a steady income stream. Additionally, Nabors has strategic partnerships and collaborations that enhance its service offerings and expand its market reach, contributing to its overall earnings.

Nabors Industries Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q2-2025)
|
% Change Since: -5.14%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements, particularly the positive impact of the Parker Wellbore acquisition and international market growth. However, challenges in the U.S. oil-focused drilling markets and operational difficulties in Mexico and Saudi Arabia indicate areas of concern. Despite these challenges, the overall outlook is supported by stable natural gas markets and effective cash flow management.
Q2-2025 Updates
Positive Updates
Strong Performance from Parker Acquisition
The Parker Wellbore acquisition contributed meaningfully to both revenue and EBITDA, exceeding expectations. The full quarter impact added $71 million in revenue to Drilling Solutions, with Parker operations contributing $36.3 million to EBITDA.
International Market Expansion
Significant growth opportunities in international markets with a focus on Saudi Arabia and Middle East regions. SANAD joint venture added new rigs, and awards for additional new builds have been secured, positioning for long-term growth.
Stable Natural Gas Market in U.S.
Increased rig count in gas basins, reflecting a recovery in gas-related drilling. U.S. Lower 48 rig count increased by nearly 2 rigs, despite pressure in oil-focused basins.
Improved Free Cash Flow and Debt Management
Adjusted free cash flow totaled $41 million in Q2, with expectations of further growth in the upcoming quarters, supporting debt reduction initiatives.
Technological Advancements in Drilling Solutions
Drilling Solutions segment delivered strong EBITDA with a gross margin of 53%, reflecting the growing demand for advanced technology globally.
Negative Updates
Pressure in Lower 48 Oil-Focused Basins
Lower 48 market continues to feel pressure from activity reductions in oil-focused basins, affecting drilling activity. Expected continued softness in pricing and margins.
Challenges in Mexico
Receivables collections in Mexico were below target, with ongoing uncertainty regarding customer payments. Despite structured support from the Mexican government, timely collections remain a concern.
Operational Challenges in Saudi Arabia
The Saudi market experienced rig suspensions and an overall decline in land rig count, impacting operations. Although SANAD's newbuild program is on track, there have been some delays.
U.S. Lower 48 Drilling Margin Decline
Lower 48 average daily rig margins decreased by 2.6% from the prior quarter, with expectations of further margin pressure due to recontracting at lower day rates.
Company Guidance
During the Nabors Industries second quarter 2025 earnings call, the company reported an adjusted EBITDA of $248 million, which included contributions from the Parker Wellbore acquisition and new rig deployments in the Middle East. The U.S. Drilling segment saw a revenue increase to $255 million, driven by the Parker acquisition and improved activity, while the International Drilling segment generated $385 million in revenue. Nabors' average Lower 48 rig count rose from 61 to 62.4, with a noted shift towards gas-focused drilling programs. The company's Drilling Solutions segment recorded a gross profit margin of 53%, and the SANAD joint venture in Saudi Arabia increased its rig count by four, with plans for additional newbuilds. Nabors emphasized the importance of debt reduction, having repurchased $14 million in notes, and projected generating free cash flow for 2025. The company also announced a reduction in 2025 capital expenditures to $700-$710 million, with a focus on achieving $40 million in cost synergies from the Parker acquisition by year-end.

Nabors Industries Financial Statement Overview

Summary
Nabors Industries faces challenges with weak profitability, high leverage, and inconsistent cash flow performance. The high debt levels and negative net income are significant concerns, though operational efficiency improvements offer some hope.
Income Statement
45
Neutral
Nabors Industries has shown a consistent decline in net income, reflected in negative net profit margins over the years, which is a significant concern. The gross profit margin remains moderate at 18.7% for TTM, showing some stability in core operations. Revenue growth has been inconsistent, with minor fluctuations in total revenue. Both EBIT and EBITDA margins have been improving, but overall profitability remains weak due to high interest and other costs.
Balance Sheet
40
Negative
The balance sheet shows high leverage with a debt-to-equity ratio of 7.84 in the TTM period, indicating potential financial risk. Stockholders' equity is low, contributing to a weak equity ratio of 6.8%. Negative return on equity highlights the company's struggle to generate profits from shareholders' investments. The high level of debt remains a significant concern for financial stability.
Cash Flow
50
Neutral
Nabors Industries has a volatile cash flow profile. The operating cash flow to net income ratio indicates the company’s ability to convert income into cash, with a ratio of -4.84 in TTM due to negative net income. Free cash flow has turned negative, indicating challenges in maintaining liquidity after capital expenditures. Despite these issues, the company maintains some level of operational cash inflow.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.93B2.93B3.01B2.65B2.02B2.13B
Gross Profit549.61M554.31M570.31M322.69M37.27M-52.73M
EBITDA855.09M813.23M959.70M597.28M481.52M354.41M
Net Income-108.76M-176.08M-11.78M-350.26M-569.27M-805.64M
Balance Sheet
Total Assets5.05B4.50B5.28B4.73B5.53B5.50B
Cash, Cash Equivalents and Short-Term Investments404.11M397.30M1.07B452.31M991.49M481.75M
Total Debt2.69B2.51B3.15B2.54B3.27B2.98B
Total Liabilities3.60B3.30B4.00B3.51B4.13B3.80B
Stockholders Equity342.66M135.00M326.61M368.96M590.66M1.15B
Cash Flow
Free Cash Flow-66.32M13.51M97.01M127.64M191.14M154.24M
Operating Cash Flow561.93M581.43M637.86M501.09M428.78M349.76M
Investing Cash Flow-523.75M-555.46M-570.42M-368.71M-117.22M-165.46M
Financing Cash Flow-28.90M-662.05M592.59M-661.53M488.42M-148.00M

Nabors Industries Technical Analysis

Technical Analysis Sentiment
Negative
Last Price31.73
Price Trends
50DMA
32.58
Negative
100DMA
31.24
Positive
200DMA
45.11
Negative
Market Momentum
MACD
0.17
Positive
RSI
45.72
Neutral
STOCH
7.61
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NBR, the sentiment is Negative. The current price of 31.73 is below the 20-day moving average (MA) of 33.65, below the 50-day MA of 32.58, and below the 200-day MA of 45.11, indicating a bearish trend. The MACD of 0.17 indicates Positive momentum. The RSI at 45.72 is Neutral, neither overbought nor oversold. The STOCH value of 7.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NBR.

Nabors Industries Peers Comparison

Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
$1.81B24.512.60%-13.36%-82.21%
67
Neutral
$636.28M10.775.39%10.21%7.73%-25.36%
67
Neutral
$1.75B7.12-1.19%5.62%25.92%-109.50%
58
Neutral
$2.78B-14.99%23.26%-284.22%
56
Neutral
C$4.16B1.0515.99%5.25%10.45%-57.37%
51
Neutral
$2.07B-27.16%5.95%-7.98%-1011.04%
50
Neutral
$496.97M-49.08%3.49%18.16%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NBR
Nabors Industries
31.73
-45.85
-59.10%
HP
Helmerich & Payne
17.80
-13.62
-43.35%
PTEN
Patterson-UTI
5.38
-3.35
-38.37%
RIG
Transocean
2.84
-2.09
-42.39%
BORR
Borr Drilling
2.35
-3.65
-60.83%
SDRL
Seadrill Limited
28.60
-13.99
-32.85%

Nabors Industries Corporate Events

Executive/Board Changes
Nabors Industries Appoints David Tudor to Board
Positive
Jul 25, 2025

On July 24, 2025, Nabors Industries appointed David J. Tudor to its Board of Directors, expanding the board to eight members. Tudor, with extensive experience in the energy sector, will serve on the Audit and Risk Oversight Committees. His appointment is seen as a strategic move to enhance Nabors’ direction and reflects the company’s commitment to incorporating independent directors with strong industry backgrounds. Tudor’s leadership roles in various energy organizations and his insights are expected to benefit Nabors and its stakeholders.

Shareholder MeetingsBusiness Operations and Strategy
Nabors Industries Holds Successful Shareholder Meeting
Positive
Jun 6, 2025

On June 3, 2025, Nabors Industries held its annual general meeting of shareholders, with 82.49% of outstanding shares represented. During the meeting, all directors were elected by a majority vote, PricewaterhouseCoopers LLP was approved as the independent auditor, executive compensation was endorsed, and an amendment to the 2016 Stock Plan was ratified, indicating strong shareholder support for the company’s governance and strategic decisions.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 19, 2025