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Nabors Industries Ltd. (NBR)
:NBR
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Nabors Industries
(NYSE:NBR)
43Neutral
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.
International Operations
Company has line of sight on projects for up to 50 rigs in Asia, Latin America, North Africa and the Mid East.
Negative Factors
Earnings Outlook
4Q EBITDA misses by 2%, guides 1Q25 lower by 6%.
Market Sentiment
Investors remain skeptical about management's expectation to be FCF positive and reduce debt by $150mn in 2025.
US Operations Impact
Reducing 2025 EBITDA by 13% and 2026 by 8% due to lower contribution from US land operations.
Nabors Industries (NBR) vs. S&P 500 (SPY)
Market Cap
$429.54M
Dividend YieldN/A
Average Volume (3M)447.90K
Price to Earnings (P/E)―
Beta (1Y)1.16
Revenue Growth-0.94%
EPS Growth-19.18%
CountryUS
Employees12,400
SectorEnergy
Sector Strength45
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)2.18
Shares Outstanding15,699,567
10 Day Avg. Volume428,589
30 Day Avg. Volume447,897
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)1.95
Price to Sales (P/S)0.00
P/FCF Ratio33.14
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.00Price Target Upside38.89% Upside
Rating ConsensusHold
Number of Analyst Covering6
Nabors Industries Business Overview & Revenue Model
Company DescriptionNabors Industries Ltd. is a leading provider of advanced drilling solutions and services for the oil and gas industry. The company operates one of the world's largest land-based drilling rig fleets and is a prominent provider of offshore platform workover and drilling rigs in the United States and multiple international markets. Nabors also offers innovative technologies, drilling software, and automation solutions that enhance operational efficiency and safety for its clients.
How the Company Makes MoneyNabors Industries generates revenue primarily through its drilling services, which include both land and offshore drilling operations. The company rents out its extensive fleet of drilling rigs to oil and gas producers, charging for the use of equipment and the accompanying personnel services. Key revenue streams include contract drilling services, rig leasing, and the sale of drilling-related technologies and automation solutions. Nabors also benefits from partnerships and collaborations that expand its market reach and technological capabilities, thereby contributing to its earnings by enhancing service offerings and operational efficiencies.
Nabors Industries Financial Statement Overview
Summary
Nabors Industries exhibits financial instability with inconsistent revenue and persistent net losses. Although there are improvements in cost management, the high debt level and declining equity raise concerns about financial health.Income Statement
Nabors Industries has experienced inconsistent revenue figures with significant volatility in net income. The gross profit margin has improved in the latest period, indicating better cost management. However, the company has struggled with achieving consistent net profitability, as evidenced by negative net income figures in recent years. Revenue growth has been erratic, pointing to instability in operational performance.42
Neutral
Balance Sheet
The balance sheet shows a high level of debt relative to equity, which poses financial risk. The debt-to-equity ratio remains elevated, suggesting potential leverage issues. Stockholders' equity has been declining, impacting the equity ratio negatively. This could indicate potential solvency concerns if not managed properly.38
Negative
Cash Flow
Cash flow statements reveal moderate operational cash flow, but free cash flow has diminished over time. The operating cash flow to net income ratio is positive, indicating that the company generates cash despite net losses. However, free cash flow growth is weak, which could impact future liquidity and investment capacity.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.93B | 3.01B | 2.65B | 2.02B | 2.13B | Gross Profit |
| 554.31M | 570.31M | 322.69M | 37.27M | -52.73M | EBIT |
| 247.93M | 269.86M | -747.85M | -944.82M | -1.17B | EBITDA |
| 813.23M | 959.70M | 597.28M | 376.77M | 354.41M | Net Income Common Stockholders |
| -176.08M | -50.25M | -307.22M | -543.71M | -762.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 397.30M | 1.07B | 452.31M | 991.49M | 481.75M | Total Assets |
| 4.50B | 5.28B | 4.73B | 5.53B | 5.50B | Total Debt |
| 2.51B | 3.15B | 2.54B | 3.26B | 2.97B | Net Debt |
| 2.12B | 2.09B | 2.09B | 2.27B | 2.50B | Total Liabilities |
| 3.30B | 4.00B | 3.51B | 4.13B | 3.80B | Stockholders Equity |
| 135.00M | 326.61M | 368.96M | 590.66M | 1.15B |
| Cash Flow | Free Cash Flow | |||
| 13.51M | 97.01M | 127.64M | 191.14M | 154.24M | Operating Cash Flow |
| 581.43M | 637.86M | 501.09M | 428.78M | 349.76M | Investing Cash Flow |
| -555.46M | -570.42M | -368.71M | -117.22M | -165.46M | Financing Cash Flow |
| -662.05M | 592.59M | -661.53M | 488.42M | -148.00M |
Nabors Industries Technical Analysis
Negative
27.36
Price Trends
33.83
Negative
43.91
Negative
58.67
Negative
Market Momentum
-0.95
Negative
41.53
Neutral
51.31
Neutral
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 27.36 is below the 20-day moving average (MA) of 28.73, below the 50-day MA of 33.83, and below the 200-day MA of 58.67, indicating a bearish trend. The MACD of -0.95 indicates Negative momentum. The RSI at 41.53 is Neutral, neither overbought nor oversold. The STOCH value of 51.31 is Neutral, 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 (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.48B | 4.47 | 12.75% | ― | -15.60% | 32.51% | |
66 Neutral | $1.67B | 8.12 | 7.57% | 7.53% | 12.23% | -37.06% | |
63 Neutral | $411.61M | 5.44 | 8.30% | 13.48% | 30.97% | 281.37% | |
60 Neutral | $2.29B | ― | -6.65% | ― | 24.47% | -55.45% | |
57 Neutral | $7.13B | 3.45 | -3.67% | 5.68% | 0.46% | -50.35% | |
53 Neutral | $2.29B | ― | -24.93% | 5.24% | 5.82% | -481.39% | |
43 Neutral | $429.54M | ― | -44.00% | ― | -0.94% | -19.18% |
* Energy Sector Average
Performance Comparison
NBR
Nabors Industries
27.36
-51.59
-65.35%
HP
Helmerich & Payne
16.82
-20.43
-54.85%
PTEN
Patterson-UTI
5.93
-5.14
-46.43%
RIG
Transocean
2.59
-3.57
-57.95%
BORR
Borr Drilling
1.72
-4.05
-70.19%
SDRL
Seadrill Limited
23.86
-28.26
-54.22%
Nabors Industries Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: -5.20%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with notable achievements in the Parker acquisition and international growth, alongside challenges in operational efficiencies and geopolitical impacts. Despite some operational hurdles, the company is making progress on strategic initiatives and maintaining financial discipline.Q1-2025 Updates
Positive Updates
Parker Wellbore Acquisition
Acquisition of Parker Wellbore completed, contributing $21.7 million in revenue and $7.8 million in EBITDA in the first quarter. The integration is on track to achieve $40 million in synergies for 2025.
International Drilling Growth
International segment revenue increased by $10.3 million (3%), with strong performance in key markets like Saudi Arabia and the SANAD joint venture. SANAD's adjusted EBITDA is projected to exceed $300 million in 2025.
Stable Rig Count in Lower 48
Lower 48 rig count ended the quarter at 62, and increased to 63 by the call date. Despite volatility, the market remained relatively stable.
Drilling Solutions Business Expansion
Drilling Solutions segment generated $46 million in EBITDA, benefiting from the Parker acquisition and geographic diversity.
Positive Cash Flow Management
Free cash flow was better than expected, with Nabors business consuming $61 million, lower than the anticipated $80-$90 million.
Negative Updates
Challenges in Lower 48 Market
Lower 48 daily rig margins declined by 4% due to increased churn and operational inefficiencies. Rig count fell to 58 at one point during the quarter.
Impact of US Sanctions on Russia Operations
Operations in Russia were suspended due to expanded US sanctions, affecting three rigs with marginal financial performance.
Operational Expenses and Market Pressures
Lower 48 market faced increased operational expenses and downward pressure on day rates, affecting overall profitability.
Reduced Activity in Certain International Markets
Decreased activity in markets like Mexico and Colombia due to political and economic factors, with two rigs released by the end of Q2.
Company Guidance
In the first quarter of 2025, Nabors Industries reported an adjusted EBITDA of $206 million, with significant contributions from their International Drilling segment and the recent acquisition of Parker Wellbore. The integration of Parker is on track to achieve $40 million in synergies for 2025. Despite challenges such as high turnover and operational inefficiencies, the company's Lower 48 rig count showed resilience, ending the quarter at 62 rigs with margins at $14,276 per day. Internationally, the SANAD joint venture in Saudi Arabia is poised for growth, projecting to earn over $300 million in adjusted EBITDA for the year, with plans to add 10 rigs across various regions in 2025. The company's focus remains on debt reduction and capturing value from their diversified portfolio amid market volatility.Nabors Industries Corporate Events
Executive/Board Changes
Nabors Industries Announces CFO Retirement and Successor
Neutral
Mar 19, 2025
Nabors Industries announced that its Chief Financial Officer, William Restrepo, will retire on September 30, 2025, after 11 years of service. Miguel Rodriguez, currently the Senior Vice President of Finance Operations, will succeed him. Restrepo has played a crucial role in the company’s success, including international expansion and significant financial restructuring. Rodriguez, who joined Nabors in 2019, is expected to continue this trajectory, having already contributed to the company’s financial operations and transformation.
M&A TransactionsBusiness Operations and Strategy
Nabors Industries Completes Acquisition of Parker Wellbore
Positive
Mar 12, 2025
On March 11, 2025, Nabors Industries completed its acquisition of Parker Wellbore, enhancing its leadership in drilling and related services. The acquisition is expected to strengthen Nabors’ Drilling Solutions business, expand its market reach, and provide immediate accretion to free cash flow. Nabors anticipates realizing $40 million in recurring synergies by the end of 2025 and expects Parker to contribute approximately $150 million in adjusted EBITDA annually. The acquisition also triggered a change of control provision in Parker’s Term Loan, requiring repayment or refinancing within 30 days.
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.