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RPC Inc (RES)
NYSE:RES

RPC (RES) AI Stock Analysis

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RE

RPC

(NYSE:RES)

Rating:76Outperform
Price Target:
$5.50
▲( 21.68% Upside)
RPC, Inc. demonstrates financial stability with strong cash flow and a robust balance sheet, contributing to a solid foundation for growth. The acquisition of Pentel Completions and EBITDA growth are positive developments, yet flat revenue growth and challenging market conditions present risks. The stock's valuation is reasonable, and the dividend yield adds attractiveness. However, technical indicators suggest caution with bearish trends in place.
Positive Factors
Acquisition Impact
The Pintail Acquisition is estimated to contribute significant revenue and EBITDA per quarter.
Financial Stability
The company carries no long-term debt and still has cash for future acquisitions.
Negative Factors
Market Activity
The stock has been down significantly due to the drop in U.S. activity and rate concession in pressure pumping.
Market Volatility
RES’s exposure to spot market pricing for pressure pumping results in less visibility and more volatility in earnings relative to contracted work.
Oil Price Sensitivity
RPC tends to serve Private operators, who are more sensitive to swings in oil prices which generally leads to larger swings in demand.

RPC (RES) vs. SPDR S&P 500 ETF (SPY)

RPC Business Overview & Revenue Model

Company DescriptionRPC, Inc. (RES) is a leading provider of specialized oilfield services and equipment to independent and major oilfield companies engaged in the exploration, production, and development of oil and gas properties. The company operates through its subsidiaries, offering a wide array of services including pressure pumping, coiled tubing, nitrogen services, and other rental tools. RPC is committed to delivering high-quality, innovative solutions and maintaining strong customer relationships across the United States and in selected international markets.
How the Company Makes MoneyRPC, Inc. generates revenue primarily through the provision of oilfield services and the rental and sale of equipment to the oil and gas industry. Its key revenue streams include pressure pumping services, which involve the use of high-pressure pumps to fracture rock formations and enhance the extraction of oil and gas. Additionally, RPC earns income from coiled tubing and nitrogen services, which are used for well intervention and maintenance operations. The company also rents out specialized tools and equipment necessary for drilling and production activities. RPC's earnings are significantly influenced by the level of oil and gas exploration and production activities, which are in turn affected by fluctuations in commodity prices. Strategic partnerships with major oil companies and long-term contracts also play a critical role in stabilizing and enhancing its revenue.

RPC Financial Statement Overview

Summary
RPC is financially stable and shows a strong recovery in financial performance over recent years. Despite a recent decline in revenue and profitability margins, the company maintains a healthy balance sheet and strong cash flow generation, providing a solid foundation for future growth. The low leverage and high equity ratio contribute to its financial resilience.
Income Statement
75
Positive
The company has demonstrated strong recovery and growth in revenue since 2020. However, recent TTM data shows a decline in both revenue and margins. Gross Profit Margin in TTM is 19.23%, and Net Profit Margin is 5.55%, indicating moderate profitability. The EBIT Margin is 5.42%, and EBITDA Margin is 16.94%, showing stable operational efficiency.
Balance Sheet
80
Positive
The company maintains a robust balance sheet with a low Debt-to-Equity Ratio of 0.03 and a high Equity Ratio of 80.38% in TTM. This reflects financial stability and low leverage. Return on Equity is 7.03%, indicating moderate profitability relative to shareholder's equity.
Cash Flow
85
Very Positive
The cash flow statement is strong with significant Operating Cash Flow and positive Free Cash Flow. The Operating Cash Flow to Net Income Ratio in TTM is 4.38, indicating strong cash generation capability. Despite a decline in Free Cash Flow, the company shows good cash flow management.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.37B1.41B1.62B1.60B864.93M598.30M
Gross Profit
227.91M245.78M419.83M430.63M128.98M22.03M
EBIT
74.24M97.54M253.89M197.78M-65.01M-101.67M
EBITDA
232.04M244.65M364.71M373.26M91.06M-213.53M
Net Income Common Stockholders
76.01M91.44M195.11M218.36M7.22M-212.19M
Balance SheetCash, Cash Equivalents and Short-Term Investments
212.20M325.98M223.31M126.42M82.43M84.50M
Total Assets
1.30B1.39B1.29B1.13B864.37M790.50M
Total Debt
27.27M32.91M27.16M30.25M46.30M30.28M
Net Debt
-184.93M-293.06M-196.15M-96.18M-36.13M-54.21M
Total Liabilities
263.94M308.20M264.33M271.28M222.57M158.94M
Stockholders Equity
1.03B1.08B1.02B857.74M641.79M631.57M
Cash FlowFree Cash Flow
133.27M129.46M213.76M61.73M-19.93M12.89M
Operating Cash Flow
332.69M349.39M394.76M201.29M47.72M77.96M
Investing Cash Flow
-179.99M-201.55M-241.71M-123.72M-47.63M-42.66M
Financing Cash Flow
-38.18M-45.17M-56.16M-33.58M-2.15M-826.00K

RPC Technical Analysis

Technical Analysis Sentiment
Negative
Last Price4.52
Price Trends
50DMA
4.95
Negative
100DMA
5.46
Negative
200DMA
5.78
Negative
Market Momentum
MACD
-0.10
Positive
RSI
39.93
Neutral
STOCH
21.49
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RES, the sentiment is Negative. The current price of 4.52 is below the 20-day moving average (MA) of 4.76, below the 50-day MA of 4.95, and below the 200-day MA of 5.78, indicating a bearish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 39.93 is Neutral, neither overbought nor oversold. The STOCH value of 21.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RES.

RPC Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
RERES
76
Outperform
$996.95M12.847.06%3.54%-9.78%-49.45%
75
Outperform
$971.91M5.3913.87%72.10%
69
Neutral
$978.55M23.624.51%3.19%-4.91%-46.51%
68
Neutral
$905.82M13.424.91%10.48%
HLHLX
66
Neutral
$930.40M11.185.64%0.34%
MRMRC
65
Neutral
$1.07B41.188.29%-9.84%-111.71%
57
Neutral
$7.06B3.04-3.49%5.80%0.53%-50.39%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RES
RPC
4.56
-2.11
-31.63%
INVX
Innovex International
14.09
-4.60
-24.61%
HLX
Helix Energy
6.33
-5.09
-44.57%
MRC
MRC Global
12.62
-0.49
-3.74%
XPRO
Expro Group Holdings
7.85
-14.65
-65.11%
WTTR
Select Energy Services
8.14
-2.48
-23.35%

RPC Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q1-2025)
|
% Change Since: -7.57%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced outlook. While the acquisition of Pentel Completions and strong financial metrics are significant positives, the market's uncertainty and flat revenue growth present challenges.
Q1-2025 Updates
Positive Updates
Pentel Completions Acquisition
RPC, Inc. acquired Pentel Completions for $245 million, adding over $400 million in revenue and significant scale in wireline services. The acquisition aligns with strategic imperatives to improve margins, increase operational scale, and strengthen customer mix.
EBITDA Growth
First-quarter EBITDA was $49.489 million, up from $46.1 million in the previous quarter, with an EBITDA margin increase of 100 basis points to 14.7%.
Strong Balance Sheet and Cash Position
RPC ended the quarter with $327 million in cash and no debt, maintaining a strong financial position to weather uncertainties and explore further opportunities.
Negative Updates
Flat Revenue Growth
Overall revenues decreased by 1% to $333 million, with pressure pumping revenues remaining flat and other service lines experiencing minor declines.
Challenging Market Conditions
The market is experiencing uncertainty due to tariffs and trade disputes, impacting oil prices and customer activities. This creates a challenging environment for maintaining pricing and utilization.
Visibility and Utilization Challenges
Visibility in the pressure pumping market remains limited, with competitive pricing pressures and potential shifts in customer activity towards lower CapEx projects.
Company Guidance
During RPC, Inc.'s first quarter of 2025 earnings call, guidance highlighted several key metrics. Revenues decreased by 1% sequentially, amounting to $333 million, with technical services contributing 94% and support services 6% of total revenues. Pressure pumping, which comprised 40.1% of revenues, remained flat, whereas downhole tools accounted for 28.2%, and rental tools experienced a notable 7% increase. EBITDA grew to $49.489 million, with a margin increase of 100 basis points to 14.7%. The company completed the acquisition of Pentel Completions for $245 million, which is expected to be accretive, projecting approximately $400 million in annual revenue with EBITDA margins around 20%. Capital expenditure for 2025 is estimated at $165 to $215 million, primarily for maintenance.

RPC Corporate Events

Executive/Board ChangesShareholder Meetings
RPC Announces Retirement of Key Board Members
Neutral
Feb 20, 2025

On February 18, 2025, Gary W. Rollins and Pamela R. Rollins announced their retirement from the Board of Directors of RPC, Inc., effective at the company’s 2025 Annual Meeting of Stockholders. Their decision to retire was amicable, and there was no disagreement with the company regarding its operations, policies, or practices.

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.