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DTI: Future Returns Will Likely Lag Despite Ongoing Share Repurchases

Cyclical Pressures Will Challenge Oil Services But Efficiency Endures

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DTI
AnalystLowTarget
Not Invested
Published 23 Jun 2025

Update shared on 13 Dec 2025

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AnalystLowTarget's Fair Value
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1Y
-24.0%
7D
-0.4%

Analysts have raised their price target on Drilling Tools International to $2.25 per share, reflecting lower perceived risk and a higher long term growth outlook that more than offsets slightly weaker margin assumptions and a modestly richer future earnings multiple.

What's in the News

  • Completed a share repurchase of 462,519 shares, about 1.3% of outstanding shares, for approximately $1.15 million under the buyback announced on May 13, 2025 (company filing)
  • Between July 1, 2025 and September 30, 2025, repurchased 259,908 shares, representing about 0.73% of shares outstanding, for $0.54 million as part of the ongoing buyback program (company filing)
  • Issued 2025 earnings guidance, projecting revenue in the range of $145 million to $165 million, with management indicating a constructive demand outlook (company guidance)
  • Management reiterated that free cash flow priorities include debt reduction, opportunistic stock buybacks and selective capital expenditures, alongside an active search for M&A opportunities (management commentary)

Valuation Changes

  • Fair Value Estimate: unchanged at $2.25 per share, indicating no revision to the intrinsic value target.
  • Discount Rate: reduced significantly from approximately 10.0% to about 8.4%, reflecting lower perceived risk in the cash flow outlook.
  • Revenue Growth: increased sharply from roughly 0.2% to about 1.7% annually, signaling a more constructive long term top line assumption.
  • Net Profit Margin: lowered moderately from about 7.0% to roughly 5.6%, incorporating more conservative profitability expectations.
  • Future P/E: nudged higher from about 10.0x to approximately 10.3x, implying a slightly richer valuation multiple on forward earnings.

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Disclaimer

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