National Energy Services Reunited (NESR) AI Stock Analysis

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National Energy Services Reunited

(NASDAQ:NESR)

67Neutral

NESR's overall stock score reflects a strong financial performance with notable improvements in revenue and profitability, supported by strategic market expansions and technological advancements. However, bearish technical indicators and a lack of valuation metrics introduce uncertainty. The optimistic outlook from the earnings call offsets some risks, but exposure to the volatile oil and gas sector and macroeconomic challenges remain significant factors.

National Energy Services Reunited (NESR) vs. S&P 500 (SPY)

Market Cap

$591.77M

Dividend YieldN/A

Average Volume (3M)336.59K

Price to Earnings (P/E)―

Beta (1Y)0.53

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees6,554

SectorEnergy

Sector Strength52

IndustryOil & Gas Equipment & Services

Share Statistics

EPS (TTM)N/A

Shares Outstanding95,447,210

10 Day Avg. Volume273,190

30 Day Avg. Volume336,587

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.66

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$14.50

Price Target Upside133.87% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

National Energy Services Reunited Business Overview & Revenue Model

Company DescriptionNational Energy Services Reunited (NESR) is a global provider of integrated energy services for the oil and gas industry. The company operates in sectors including drilling, evaluation, intervention, and completion services, offering a comprehensive range of products and solutions aimed at enhancing the productivity and efficiency of oil and gas operations. NESR is committed to delivering innovative technologies and expertise to support the exploration and production activities of its clients worldwide.

How the Company Makes MoneyNESR generates revenue through its diverse range of services tailored to the oil and gas industry. Its key revenue streams include drilling services, where NESR provides the necessary equipment and expertise for efficient drilling operations, and evaluation services, which involve advanced data analysis and interpretation to optimize reservoir performance. The company also offers intervention and completion services that focus on maintaining and enhancing well productivity. Significant partnerships with major oil and gas companies contribute to NESR's earnings by ensuring a steady demand for its services. Additionally, NESR's investment in innovative technologies and solutions helps in expanding its market reach and client base, further solidifying its revenue model.

National Energy Services Reunited Financial Statement Overview

Summary

National Energy Services Reunited has demonstrated strong revenue growth and improved profitability over the past year. The balance sheet shows a stable capital structure with manageable leverage. Cash flow metrics highlight significant improvements in cash management, enhancing financial flexibility. While the company is on a positive trajectory, continued focus on operational efficiency and maintaining leverage will be crucial for sustained growth and stability.

Income Statement

Positive

The company has shown strong revenue growth from 2022 to 2023 with a 26.0% increase. Gross profit margin improved significantly to 11.3% from 5.1% in the previous year. Net profit turned positive in 2023 with a margin of 1.1%, reflecting improved profitability. However, the EBIT margin is still moderate at 7.0%, indicating room for operational efficiency improvement.

Balance Sheet

Positive

The debt-to-equity ratio stands at 0.59, indicating manageable leverage, but slightly increased from the previous year. Return on equity improved to 1.5% from negative in 2022, showing a return to profitability. The equity ratio of 45.7% is stable, suggesting a balanced capital structure. However, the company should monitor its debt levels to ensure continued financial stability.

Cash Flow

Positive

The free cash flow turned positive with significant growth, indicating better cash management. Operating cash flow to net income ratio is high, reflecting efficient cash generation relative to net income. Free cash flow to net income is also strong, supporting sustainable financial health. The company has improved its cash flow position significantly, a positive sign for future operations.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
643.73M	1.15B	909.52M	876.73M	834.15M	658.38M
	Gross Profit
97.83M	129.88M	46.61M	-15.26M	62.09M	135.65M
	EBIT
63.01M	80.70M	-917.00K	-43.33M	35.28M	71.81M
	EBITDA
126.48M	217.90M	120.17M	76.72M	165.70M	159.52M
	Net Income Common Stockholders
22.88M	12.58M	-36.42M	-64.57M	16.55M	39.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
28.88K	67.82M	78.85M	205.77M	75.01M	73.20M
	Total Assets
235.35K	1.80B	1.83B	1.83B	1.69B	1.52B
	Total Debt
137.81K	484.75M	566.41M	595.84M	398.47M	383.53M
	Net Debt
108.94K	416.93M	487.56M	390.07M	323.46M	310.33M
	Total Liabilities
216.09K	976.25M	1.03B	1.01B	742.64M	635.89M
	Stockholders Equity
19.26K	821.49M	802.35M	821.03M	944.43M	886.47M
Cash Flow		Free Cash Flow
77.59M	108.77M	-29.84M	20.67M	51.82M	-18.85M
	Operating Cash Flow
107.31M	176.96M	92.58M	127.74M	134.45M	89.09M
	Investing Cash Flow
-29.42M	-83.46M	-146.71M	-164.54M	-96.44M	-107.34M
	Financing Cash Flow
-29.20M	-104.53M	-72.80M	167.54M	-36.24M	66.58M

National Energy Services Reunited Technical Analysis

Technical Analysis Sentiment

Negative

Last Price6.20

Price Trends

50DMA

7.69

Negative

100DMA

8.29

Negative

200DMA

8.70

Negative

Market Momentum

MACD

-0.53

Negative

RSI

39.49

Neutral

STOCH

76.52

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NESR, the sentiment is Negative. The current price of 6.2 is below the 20-day moving average (MA) of 6.63, below the 50-day MA of 7.69, and below the 200-day MA of 8.70, indicating a bearish trend. The MACD of -0.53 indicates Negative momentum. The RSI at 39.49 is Neutral, neither overbought nor oversold. The STOCH value of 76.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NESR.

National Energy Services Reunited Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRC	68 Neutral	$937.45M	36.73	10.01%	―	-9.17%	-71.36%
NESR	67 Neutral	$591.77M	―	1.53%	―	―	―
TTI	65 Neutral	$304.51M	2.82	56.37%	―	-4.34%	312.14%
CLB	60 Neutral	$580.98M	18.58	13.17%	0.32%	2.76%	-23.59%
Sector *	55 Neutral	$7.05B	3.40	-6.09%	6.09%	-0.43%	-51.04%
PUMP	49 Neutral	$515.81M	―	-15.19%	―	-11.42%	-278.57%
ACDC	44 Neutral	$744.83M	―	-18.38%	―	-16.51%	-208.49%

* Energy Sector Average

Performance Comparison

NESR

National Energy Services Reunited

6.24

-2.76

-30.67%

CLB

Core Laboratories

12.44

-4.05

-24.56%

MRC

MRC Global

10.89

-0.78

-6.68%

TTI

Tetra Technologies

2.43

-2.02

-45.39%

PUMP

Propetro Holding

5.15

-3.51

-40.53%

ACDC

ProFrac Holding

4.77

-3.33

-41.11%

National Energy Services Reunited Earnings Call Summary

Earnings Call Date: Mar 12, 2025 | % Change Since: -18.42% | Next Earnings Date: Aug 12, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong performance for NESR in 2024, with record revenue, EBITDA, and cash flow, as well as significant market expansion and technological advancements. Despite macroeconomic and geopolitical uncertainties, and anticipated seasonal slowdowns and competitive pressures, the company maintains an optimistic outlook for 2025.

Highlights

Record-Breaking Revenue and Growth

NESR achieved record revenue of $343.7 million for Q4 2024, up 2.2% sequentially and 11.8% year-over-year, with full-year revenue reaching $1.3 billion, a 13.6% increase year-over-year.

Strong EBITDA and Cash Flow

Adjusted EBITDA for Q4 2024 was a record $87.2 million, with margins of 25.4%. Full-year adjusted EBITDA was $310.1 million, up 18.2% year-over-year. Free cash flow for the full year was $124 million, with a conversion rate of 40.1%.

Market Expansion and Operational Milestones

The company expanded its footprint in Saudi Arabia, Oman, Kuwait, UAE, Iraq, Algeria, and Egypt, achieving record revenue and growth in each. NESR gained market share in Saudi Arabia and introduced new technology platforms in Oman.

Technological Advancements

Successful execution of the ROYA direction drilling platform and the NEDA decarbonization portfolio, with key pilot milestones achieved and plans for commercialization.

Lowlights

Macroeconomic and Geopolitical Uncertainty

Ongoing macro volatility worldwide and geopolitical uncertainty in the Middle East present challenges, although the company has managed to navigate these effectively so far.

Seasonal Slowdown and Competitive Pressures

The company anticipates a slower Q1 2025 due to fewer operating days and the full month of Ramadan, and increased competition is expected to pressure margins in 2025.

Company Guidance

During the NESR Fourth Quarter 2024 Financial Results call, Sherif Foda, Chairman and CEO of NESR, announced record achievements in revenue, EBITDA, and EPS for the fourth quarter of 2024, with revenue reaching $343.7 million, up 2.2% sequentially and 11.8% year-over-year. The full-year revenue for 2024 was $1.3 billion, marking a 13.6% increase compared to the previous year, driven by strong activity in the Gulf countries. The adjusted EBITDA for Q4 2024 was a record $87.2 million, with near-record margins of 25.4%, and the full-year adjusted EBITDA was $310.1 million, up 18.2% year-over-year. The company achieved a net debt-to-adjusted EBITDA ratio of 0.89 times by the year's end, significantly reduced from 2.8 times at the end of 2022. Foda also discussed NESR's strategic focus on expanding its technology portfolio and potential capital allocation for growth opportunities in 2025, with an emphasis on the MENA region's sustained activity.

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.