Precision Drilling (PD) AI Stock Analysis

• Market Cap: C$1.29B
• Dividend Yield: N/A
• Average Volume (3M): 84.66K
• Price to Earnings (P/E): 21.9
• Beta (1Y): 1.50
• Revenue Growth: -5.55%
• EPS Growth: -74.96%
• Country: CA
• Employees: 5,504
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Drilling
• EPS (TTM): -0.77
• Shares Outstanding: 13,644,869
• 10 Day Avg. Volume: 87,532
• 30 Day Avg. Volume: 84,663
• 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: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$119.29
• Price Target Upside: 26.56% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 5.42
• Revenue Forecast (FY): C$1.84B

• Rating: 71 Outperform
• Price Target: C$104.00 ▲(10.34% Upside)

Precision Drilling's overall score is driven by strong technical momentum and positive earnings call sentiment, despite valuation concerns and financial performance challenges. The company's strategic initiatives and operational efficiency support a favorable outlook, but overbought technical indicators and high P/E ratio suggest caution.

Positive Factors

Technological Advancements

The adoption of advanced technologies like Alpha and EverGreen enhances operational efficiency and service quality, providing a competitive edge and attracting more clients, which supports long-term growth.

Debt Reduction

Reducing debt strengthens the balance sheet, improving financial stability and flexibility, allowing for strategic investments and potential shareholder returns.

Operational Growth in U.S.

Increased U.S. drilling activity indicates strong market demand and operational success in key regions, contributing to sustained revenue growth and market presence.

Negative Factors

Decline in Canadian Drilling Activity

A decline in Canadian drilling activity could impact revenue and market share in the region, posing a challenge to maintaining overall growth momentum.

Challenges with Contract Churn

Persistent contract churn may lead to volatility in revenue streams and operational inefficiencies, affecting long-term planning and resource allocation.

Decreased Free Cash Flow Growth

Declining free cash flow growth can limit the company's ability to invest in new projects, pay down debt, or return capital to shareholders, impacting future financial flexibility.

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 charges clients for the use of its drilling rigs and associated services. The company operates on a dayrate model, whereby clients pay a fixed rate for each day the rig is utilized. Additional revenue streams include directional drilling services, which involve advanced drilling techniques to enhance efficiency and reduce costs for clients, and well servicing operations that provide maintenance and repair services for oil and gas wells. Strategic partnerships with major oil and gas companies enhance its market reach and reliability, while the company's investment in technology and innovations allows it to offer high-value services that attract clients and drive earnings.

Precision Drilling Financial Statement Overview

Summary

Precision Drilling shows operational efficiency with strong margins and a stable balance sheet. However, challenges include declining revenue and free cash flow growth rates, which could impact long-term financial health.

Income Statement

Precision Drilling's income statement shows mixed results. The TTM gross profit margin is strong at 66.5%, indicating efficient cost management. However, the net profit margin has slightly declined to 5.7% from 5.8% in the previous year, and revenue has decreased by 0.8% in the TTM period. The EBIT and EBITDA margins remain healthy, suggesting operational efficiency, but the declining revenue growth rate is a concern.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.45, which is an improvement from previous years, indicating reduced leverage. The equity ratio is solid, and the return on equity is 6.3%, showing profitability. However, the company should continue to focus on reducing debt to enhance financial stability further.

Cash Flow

Cash flow analysis reveals a decrease in free cash flow growth by 4.3% in the TTM period, which is a concern. The operating cash flow to net income ratio is strong at 1.11, indicating good cash generation relative to net income. However, the free cash flow to net income ratio has decreased, suggesting potential challenges in maintaining free cash flow levels.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.83B	1.90B	1.94B	1.62B	986.85M	935.75M
Gross Profit	1.29B	1.59B	733.31M	213.56M	6.38M	36.01M
EBITDA	493.13M	535.85M	657.73M	311.61M	191.19M	309.14M
Net Income	58.81M	111.19M	289.24M	-34.29M	-177.39M	-120.14M
Balance Sheet
Total Assets	2.80B	2.96B	3.02B	2.88B	2.66B	2.90B
Cash, Cash Equivalents and Short-Term Investments	38.31M	73.77M	54.18M	21.59M	40.59M	108.77M
Total Debt	753.88M	887.59M	992.19M	1.15B	1.17B	1.30B
Total Liabilities	1.13B	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	208.61M	265.38M	273.82M	52.85M	63.28M	164.53M
Operating Cash Flow	449.57M	482.08M	500.57M	237.10M	139.22M	226.12M
Investing Cash Flow	-216.40M	-202.99M	-214.78M	-144.41M	-56.61M	-40.52M
Financing Cash Flow	-220.47M	-261.38M	-251.97M	-113.17M	-149.91M	-145.62M

Precision Drilling Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 94.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PD, the sentiment is Positive. The current price of 94.25 is above the 20-day moving average (MA) of 84.84, above the 50-day MA of 81.98, and above the 200-day MA of 71.56, indicating a bullish trend. The MACD of 3.01 indicates Negative momentum. The RSI at 76.61 is Negative, neither overbought nor oversold. The STOCH value of 92.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:PD.

Precision Drilling Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PHX	77 Outperform	C$343.38M	6.55	23.65%	10.23%	8.98%	-27.41%
TOT	75 Outperform	C$553.33M	9.13	10.51%	2.63%	15.58%	47.55%
PD	71 Outperform	C$1.29B	21.93	3.43%	―	-5.55%	-74.96%
AKT.A	66 Neutral	C$80.31M	3.42	12.87%	―	24.94%	956.65%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
ESI	54 Neutral	C$456.27M	-12.06	-3.50%	―	-2.47%	-246.73%
WRG	51 Neutral	C$70.56M	-10.29	-2.38%	―	-0.38%	6.98%

Precision Drilling Corporate Events

Precision Drilling Outperforms Industry with Strong Q3 Results

Precision Drilling reported its 2025 third-quarter financial results, highlighting a revenue of $462 million, which, despite being a 3% decrease from the previous year, outperformed the industry average declines. The company achieved a cash flow that allowed for debt repayment and share repurchases, and it revised its capital budget upwards to $260 million. Operationally, Precision saw a decrease in Canadian rig utilization but an increase in U.S. rig activity, demonstrating resilience in a declining market. The company continues to invest in its fleet, securing customer-funded upgrades, and maintaining a strong position in key markets.