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Helmerich & Payne (HP)
:HP
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Helmerich & Payne
(NYSE:HP)
66Neutral
Positive Factors
Market Position
HP is well positioned to gain share of wallet in the Mid East despite near-term headwinds in Saudi Arabia.
Strategic Expansion
HP expanded its global footprint and it is now a top Middle East driller, important strategic decisions to secure the company's longevity.
Negative Factors
Financial Performance
HP underperformed the OIH by 650bps after a poor cash flow quarter and downside guidance.
Market Challenges
The outlook also reflects U.S. price weakness, which until now has not been a major factor for HP.
Helmerich & Payne (HP) vs. S&P 500 (SPY)
Market Cap
$1.77B
Dividend Yield7.37%
Average Volume (3M)1.91M
Price to Earnings (P/E)8.3
Beta (1Y)0.85
Revenue Growth12.23%
EPS Growth-37.06%
CountryUS
Employees7,000
SectorEnergy
Sector Strength51
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)0.02
Shares Outstanding99,416,610
10 Day Avg. Volume1,949,994
30 Day Avg. Volume1,909,580
Financial Highlights & Ratios
PEG Ratio-0.71
Price to Book (P/B)0.85
Price to Sales (P/S)0.00
P/FCF Ratio12.36
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$25.11Price Target Upside41.07% Upside
Rating ConsensusHold
Number of Analyst Covering9
Helmerich & Payne Business Overview & Revenue Model
Company DescriptionHelmerich & Payne, Inc., together with its subsidiaries, provides drilling services and solutions for exploration and production companies. The company operates through three segments: North America Solutions, Offshore Gulf of Mexico, and International Solutions. The North America Solutions segment drills primarily in Colorado, Louisiana, Montana, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Utah, West Virginia, and Wyoming. It also focuses on developing, promoting, and commercializing technologies designed to enhance the drilling operations, as well as wellbore quality and placement. The Offshore Gulf of Mexico segment has drilling operations in Louisiana and in U.S. federal waters in the Gulf of Mexico. The International Solutions segment conducts drilling operations in Argentina, Bahrain, Colombia, and the United Arab Emirates. As of September 30, 2021, the company operated a fleet of 236 land rigs in North America; 30 international land rigs; and 7 offshore platform rigs. It also owns, develops, and operates commercial real estate properties. The company's real estate investments include a shopping center comprising approximately 390,000 leasable square feet; and approximately 176 acres of undeveloped real estate located in Tulsa, Oklahoma. Helmerich & Payne, Inc. was founded in 1920 and is headquartered in Tulsa, Oklahoma.
How the Company Makes MoneyHelmerich & Payne generates revenue primarily through its contract drilling services. The company's revenue model is based on providing land and offshore drilling services to oil and gas exploration and production companies. Key revenue streams include day rates charged for the use of its drilling rigs, which are determined by the length and complexity of drilling contracts, equipment utilization rates, and the specific technical specifications required by clients. Additionally, HP benefits from long-term contracts and partnerships with major oil and gas companies, which provide a stable income stream. The company's earnings are also influenced by factors such as global oil prices, demand for energy resources, and technological advancements in drilling efficiency.
Helmerich & Payne Financial Statement Overview
Summary
Overall, Helmerich & Payne demonstrates sound financial health and operational efficiency. The company has successfully improved its profitability and maintains a strong balance sheet with no debt. The cash flow position is solid, although there is scope for enhanced free cash flow growth. The company is well-positioned to manage market fluctuations and potential growth opportunities.Income Statement
Helmerich & Payne shows a strong financial performance with improving margins. The TTM gross profit margin is 44.5%, and the net profit margin is 11.0%. Revenue growth has been inconsistent, with a recent decline of 4.0% from the previous year. However, the company has consistently improved its EBIT and EBITDA margins, currently at 15.0% and 30.4% respectively, indicating operational efficiency improvements.75
Positive
Balance Sheet
The balance sheet reflects a robust financial position with a debt-to-equity ratio of 0.0 in the latest TTM period, indicating no reliance on debt financing. The equity ratio is 50.7%, showcasing a healthy balance of equity financing. Return on equity is solid at 10.3%, suggesting effective management of shareholder investments.82
Very Positive
Cash Flow
Cash flow analysis shows strong operational cash generation with an operating cash flow to net income ratio of 2.2 in the TTM period. The free cash flow to net income ratio is 0.7, indicating decent cash conversion. However, free cash flow growth is moderate at 7.1%, suggesting room for improvement in capital efficiency.78
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.76B | 2.76B | 2.87B | 2.06B | 1.22B | 1.77B | Gross Profit |
| 716.08M | 729.04M | 775.01M | 224.55M | -158.90M | 101.48M | EBIT |
| 413.98M | 451.90M | 561.89M | 22.59M | -348.22M | -85.76M | EBITDA |
| 881.64M | 849.27M | 992.98M | 425.76M | 2.50M | -131.64M | Net Income Common Stockholders |
| 303.76M | 344.17M | 434.10M | 5.45M | -337.46M | -496.39M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 125.71M | 510.26M | 350.77M | 349.23M | 1.12B | 577.22M | Total Assets |
| 4.21B | 5.78B | 4.38B | 4.36B | 5.03B | 4.83B | Total Debt |
| 440.00M | 1.86B | 599.95M | 554.99M | 1.03B | 480.73M | Net Debt |
| 314.29M | 1.64B | 342.78M | 322.86M | 107.95M | -7.16M | Total Liabilities |
| 1.41B | 2.86B | 1.61B | 1.59B | 2.12B | 1.51B | Stockholders Equity |
| 2.79B | 2.92B | 2.77B | 2.77B | 2.91B | 3.32B |
| Cash Flow | Free Cash Flow | ||||
| 203.08M | 189.59M | 438.22M | -38.63M | 54.29M | 398.09M | Operating Cash Flow |
| 668.22M | 684.66M | 833.68M | 233.91M | 136.44M | 538.88M | Investing Cash Flow |
| -293.03M | -458.75M | -322.58M | -167.31M | -161.99M | -87.89M | Financing Cash Flow |
| 1.05B | 986.51M | -463.87M | -734.30M | 425.52M | -297.22M |
Helmerich & Payne Technical Analysis
Negative
17.80
Price Trends
21.55
Negative
25.75
Negative
29.22
Negative
Market Momentum
-0.90
Negative
36.54
Neutral
23.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HP, the sentiment is Negative. The current price of 17.8 is below the 20-day moving average (MA) of 19.04, below the 50-day MA of 21.55, and below the 200-day MA of 29.22, indicating a bearish trend. The MACD of -0.90 indicates Negative momentum. The RSI at 36.54 is Neutral, neither overbought nor oversold. The STOCH value of 23.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HP.
Helmerich & Payne Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.72B | 8.99 | 14.66% | ― | 30.82% | -62.91% | |
71 Outperform | $1.56B | 4.65 | 12.75% | ― | -15.60% | 32.51% | |
66 Neutral | $1.77B | 8.29 | 7.57% | 7.37% | 12.23% | -37.06% | |
60 Neutral | $2.31B | ― | -6.65% | ― | 24.47% | -55.45% | |
57 Neutral | $7.20B | 3.42 | -3.69% | 5.69% | 0.56% | -50.74% | |
53 Neutral | $2.36B | ― | -24.93% | 5.23% | 5.82% | -481.39% | |
43 Neutral | $509.29M | ― | -44.00% | ― | -0.94% | -19.18% |
* Energy Sector Average
Performance Comparison
HP
Helmerich & Payne
17.80
-19.10
-51.76%
NBR
Nabors Industries
29.83
-46.18
-60.76%
PTEN
Patterson-UTI
6.11
-4.81
-44.05%
RIG
Transocean
2.61
-3.42
-56.72%
VAL
Valaris
38.26
-38.34
-50.05%
SDRL
Seadrill Limited
24.21
-28.17
-53.78%
Helmerich & Payne Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q2-2025)
| % Change Since: -5.07%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. The acquisition of KCA Deutag and the steady performance of the North America and Offshore segments highlight positive developments. However, challenges in the International Solutions segment, particularly in Saudi Arabia, and the impact of softer oil prices on the rig count introduce significant concerns.Q2-2025 Updates
Positive Updates
Successful KCAD Acquisition
The acquisition of KCA Deutag has positioned H&P as a global leader with the largest active rig count in the industry, enhancing capabilities for future expansion into international markets.
Strong North America Solutions Segment
The North America Solutions segment maintained a steady rig count and realized margins better than expected, with over 50% of customers preferring performance-based contracts.
Offshore Solutions Segment Performance
The offshore solutions segment generated $26 million in direct margins, with a current backlog of $2.5 billion, signaling strong and steady cash flows.
Financial Position and Cash Flow
Despite significant one-time costs, the company maintained strong liquidity with cash and short-term investments of $196 million and plans to repay $175 million of a $400 million term loan by year-end.
Negative Updates
Challenges in International Solutions Segment
The International Solutions segment faced challenges with start-up delays in Saudi operations and rig suspensions impacting margins, expected to be between $25 million and $35 million in the next quarter.
Impact of Softer Oil Prices
Softer oil prices are expected to lower the industry rig count in North America, with anticipated reductions in contracted rigs and potential pricing pressure.
Saudi Rig Suspensions
The Saudi operations faced rig suspensions with no clear timeline for reactivation, impacting the International Solutions segment's performance.
Company Guidance
During the fiscal second quarter of 2025 earnings call, H&P provided detailed guidance and metrics on their performance and future outlook. The company reported quarterly revenues of just over $1 billion, with total direct operating costs of $702 million and general and administrative expenses of approximately $81 million. The North America Solutions segment averaged 149 contracted rigs, resulting in revenues of $600 million and a direct margin of $266 million. The International Solutions segment ended the quarter with 76 rigs working and generated a direct margin of $27 million, while the Offshore Solutions segment produced $26 million in direct margins. Looking ahead to the third quarter, H&P expects North American Solutions to average 143 to 149 contracted rigs, with direct margins between $235 million and $260 million. The International Solutions segment is projected to have a direct margin of $25 million to $35 million, with an average of 85 to 91 contracted rigs. The Offshore Solutions segment is expected to generate a direct margin between $22 million and $29 million. For the full fiscal year 2025, capital expenditures are estimated to be between $360 million and $395 million, with cash taxes ranging from $190 million to $240 million.Helmerich & Payne Corporate Events
Private Placements and FinancingM&A Transactions
Helmerich & Payne Completes Acquisition of KCA Deutag
Neutral
May 15, 2025
On January 16, 2025, Helmerich & Payne, Inc. completed its acquisition of KCA Deutag International Limited for approximately $2.0 billion. This acquisition, funded through a combination of senior notes, term loans, and cash, is expected to enhance H&P’s market position by integrating KCA Deutag’s operations, although the pro forma financial statements indicate that actual results may vary from projections.
The most recent analyst rating on (HP) stock is a Hold with a $50.00 price target. To see the full list of analyst forecasts on Helmerich & Payne stock, see the HP Stock Forecast page.
Spark’s Take on HP Stock
According to Spark, TipRanks’ AI Analyst, HP is a Neutral.
Helmerich & Payne’s overall score is influenced by solid financial performance and a strong balance sheet, but tempered by bearish technical indicators and challenges highlighted in the earnings call, such as international operational issues and the impact of softer oil prices. The attractive valuation and high dividend yield provide some support, although market conditions pose risks.
To see Spark’s full report on HP stock, click here.
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.