Precision Drilling (PD) AI Stock Analysis

• Market Cap: $1.01B
• Dividend Yield: N/A
• Average Volume (3M): 72.15K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 1.26
• Revenue Growth: -3.26%
• EPS Growth: -52.16%
• Country: CA
• Employees: 5,504
• Sector: Energy
• Sector Strength: 49
• Industry: Oil & Gas Drilling
• EPS (TTM): 1.21
• Shares Outstanding: 13,644,869
• 10 Day Avg. Volume: 49,272
• 30 Day Avg. Volume: 72,153
• PEG Ratio: -0.18
• Price to Book (P/B): 0.75
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 4.71
• Enterprise Value/Market Cap: 1.59
• Enterprise Value/Revenue: 0.87
• Enterprise Value/Gross Profit: 1.31
• Enterprise Value/Ebitda: 3.11
• 1Y Price Target: $99.32
• Price Target Upside: 31.11% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 72 Outperform
• Price Target: C$83.00 ▲(9.57% Upside)

Precision Drilling's overall stock score reflects a stable financial position with positive technical indicators and a strong earnings call. The company's operational efficiency and improved leverage management are significant strengths, while challenges in revenue growth and cash flow management present risks. The positive market momentum and reasonable valuation further support the stock's attractiveness.

Positive Factors

Capital Expenditure

The company increased its 2025 capital expenditure budget to target additional rig upgrades, demonstrating confidence in future growth.

Earnings

Precision Drilling reported strong Q2 results, supported by improving natural gas-related demand.

Financial Performance

Precision Drilling has nearly achieved its full-year debt reduction target, enhancing financial flexibility.

Negative Factors

Debt Management

Precision Drilling has repaid $91 million of debt, nearly meeting its full-year $100 million target, and shareholder returns are expected to ramp up in the coming years.

Market Environment

U.S. operating days rose approximately 13% quarter-over-quarter to 3,033, which is impressive given the downward pressure on U.S. rig counts.

Precision Drilling Business Overview & Revenue Model

Company Description

Precision Drilling Corporation, a drilling company, provides onshore drilling, completion, and production services to exploration and production companies in the oil and natural gas and geothermal industries in North America and the Middle East. The company operates in two segments, Contract Drilling Services; and Completion and Production Services. The Contract Drilling Services segment offers onshore well drilling services to exploration and production companies in the oil and natural gas industry. This segment's services include land and turnkey drilling; and procurement and distribution of oilfield supplies, as well as manufacture and refurbishment of drilling and service rig equipment. As of December 31, 2021, it operated 227 land drilling rigs, including 109 in Canada; 105 in the United States; 6 in Kuwait; 4 in Saudi Arabia; 2 in the Kurdistan region of Iraq; and 1 in the country of Georgia. As of December 31, 2021, this segment also operated 47 AlphaTM rigs with commercial AlphaAutomation; 18 AlphaApps; 4 grid power capable rigs; and 60 natural gas or bi-fuel rigs. The Completion and Production Services segment provides service rigs for well completion, workover, abandonment, maintenance, and re-entry preparation services; wellsite accommodations; oilfield surface equipment rentals; and camp and catering services to oil and natural gas exploration and production companies. As of December 31, 2021, it operated 123 well completion and workover service rigs, including 113 in Canada and 10 in the United States; 1,900 oilfield rental items, including surface storage, small-flow wastewater treatment, power generation, and solids control equipment; 109 wellsite accommodation units; 943 drill camp beds; 822 base camp beds; and three kitchen diners in Canada. Precision Drilling Corporation was incorporated in 1951 and is headquartered in Calgary, Canada.

How the Company Makes Money

Precision Drilling generates revenue primarily through its contract drilling services, where it earns fees for drilling wells on behalf of oil and gas companies. The company operates a fleet of drilling rigs, and revenue is derived from day rates charged for rig usage, which can vary based on the type of rig, location, and contract terms. In addition to drilling, Precision Drilling also provides well servicing, which includes maintenance and repair of existing wells, contributing to its revenue streams. The company often enters into long-term contracts with major clients in the energy sector, ensuring a steady income flow. Furthermore, Precision Drilling invests in advanced technologies and data analytics services, adding value to its offerings and enhancing operational efficiencies, which can lead to increased demand and higher margins. Strategic partnerships with energy companies and technology providers also play a critical role in expanding the company’s market reach and service capabilities.

Precision Drilling Financial Statement Overview

Summary

Precision Drilling demonstrates solid financial standing with strong profitability and cash flow metrics, although revenue growth is inconsistent. The balance sheet reflects moderate leverage and a sound equity position.

Income Statement

Precision Drilling shows a robust improvement in profitability over the past years. The TTM data indicates a strong gross profit margin of 51.7% and a positive net profit margin of 5.8%, highlighting efficient cost management. However, the revenue growth has been inconsistent, with a notable drop from the previous year, potentially signaling market volatility.

Balance Sheet

The company's balance sheet is moderately healthy with a debt-to-equity ratio of 0.51, indicating a relatively low leverage compared to industry norms. Return on equity stands at a modest 6.4%, reflecting moderate profitability for shareholders. The equity ratio is stable at 58.2%, suggesting a balanced capital structure.

Cash Flow

Precision Drilling exhibits strong cash flow management with a free cash flow to net income ratio of 2.36, indicating excellent cash generation relative to net earnings. Additionally, the operating cash flow to net income ratio is notably high at 4.38, underscoring efficient cash operations. The free cash flow growth is stable, although not particularly high.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.85B	1.90B	1.94B	1.62B	986.85M	935.75M
Gross Profit	1.23B	1.59B	733.31M	213.56M	6.38M	36.01M
EBITDA	517.72M	535.85M	657.73M	311.61M	191.19M	309.14M
Net Income	104.76M	111.19M	289.24M	-34.29M	-177.39M	-120.14M
Balance Sheet
Total Assets	2.74B	2.96B	3.02B	2.88B	2.66B	2.90B
Cash, Cash Equivalents and Short-Term Investments	46.70M	73.77M	54.18M	21.59M	40.59M	108.77M
Total Debt	749.60M	887.59M	992.19M	1.15B	1.17B	1.30B
Total Liabilities	1.08B	1.27B	1.44B	1.65B	1.44B	1.49B
Stockholders Equity	1.66B	1.68B	1.58B	1.23B	1.23B	1.41B
Cash Flow
Free Cash Flow	217.89M	265.38M	273.82M	52.85M	63.28M	164.53M
Operating Cash Flow	453.38M	482.08M	500.57M	237.10M	139.22M	226.12M
Investing Cash Flow	-189.66M	-202.99M	-214.78M	-144.41M	-56.61M	-40.52M
Financing Cash Flow	-265.54M	-261.38M	-251.97M	-113.17M	-149.91M	-145.62M

Precision Drilling Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 75.75
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PD, the sentiment is Neutral. The current price of 75.75 is above the 20-day moving average (MA) of 74.70, above the 50-day MA of 70.78, and above the 200-day MA of 73.82, indicating a neutral trend. The MACD of 1.35 indicates Positive momentum. The RSI at 53.35 is Neutral, neither overbought nor oversold. The STOCH value of 22.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:PD.

Precision Drilling Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOT	79 Outperform	C$457.76M	7.11	11.66%	3.01%	14.74%	62.76%
PD	72 Outperform	$1.01B	9.79	6.23%	―	-3.26%	-52.16%
AKT.A	68 Neutral	C$78.19M	3.73	12.72%	―	19.58%	344.29%
Sector *	65 Neutral	$14.81B	7.14	3.01%	5.53%	4.29%	-62.49%
PHX	64 Neutral	C$339.31M	6.47	23.75%	10.67%	6.97%	-36.60%
WRG	54 Neutral	C$71.07M	―	-1.99%	―	5.00%	22.76%
ESI	48 Neutral	C$378.67M	14.37	-2.86%	―	-1.65%	-279.49%

Precision Drilling Corporate Events

Precision Drilling Reports Q2 2025 Results, Boosts Investment in Rig Fleet

Precision Drilling announced its second quarter financial results for 2025, reporting a revenue of $407 million, a slight decrease from the previous year due to lower activity in the U.S. and international markets. Despite the decline, the company maintained its 12th consecutive quarter of positive earnings and increased its capital budget to $240 million to upgrade its Super Series rigs, aiming to secure additional customer commitments and enhance revenue growth. The company also highlighted strong operational performance in Canada, with increased revenue per utilization day and new contracts, while winding down its U.S. well servicing operations.

The most recent analyst rating on (TSE:PD) stock is a Buy with a C$125.00 price target. To see the full list of analyst forecasts on Precision Drilling stock, see the TSE:PD Stock Forecast page.