DB:9KG

Stock Analysis Report

Executive Summary

NexTier Oilfield Solutions Inc. provides integrated well completion services primarily in the United States.

Rewards

Trading at 79% below its fair value

Earnings are forecast to grow 126.27% per year

Risk Analysis

Interest payments are not well covered by earnings

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Profit margins (0.5%) are lower than last year (3%)



Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has Keane Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 9KG's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-18.4%

9KG

3.6%

DE Energy Services

1.7%

DE Market


1 Year Return

-65.1%

9KG

-15.0%

DE Energy Services

15.0%

DE Market

Return vs Industry: 9KG underperformed the German Energy Services industry which returned -3.8% over the past year.

Return vs Market: 9KG underperformed the German Market which returned 17.1% over the past year.


Shareholder returns

9KGIndustryMarket
7 Day-18.4%3.6%1.7%
30 Day-23.5%-7.4%0.8%
90 Day-23.1%-3.0%3.7%
1 Year-65.1%-65.1%-13.0%-15.0%18.5%15.0%
3 Yearn/a-31.0%-38.6%17.1%6.9%
5 Yearn/a-56.4%-74.9%24.3%7.3%

Price Volatility Vs. Market

How volatile is Keane Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Keane Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 9KG (€3.9) is trading below our estimate of fair value (€18.57)

Significantly Below Fair Value: 9KG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 9KG is poor value based on its PE Ratio (47.6x) compared to the Energy Services industry average (16.4x).

PE vs Market: 9KG is poor value based on its PE Ratio (47.6x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: 9KG is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: 9KG is overvalued based on its PB Ratio (1x) compared to the XE Energy Services industry average (0.8x).


Next Steps

Future Growth

How is Keane Group forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

126.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 9KG's forecast earnings growth (126.3% per year) is above the savings rate (0.2%).

Earnings vs Market: 9KG's earnings (126.3% per year) are forecast to grow faster than the German market (13.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 9KG's revenue is expected to decline over the next 3 years (-1.2% per year).

High Growth Revenue: 9KG's revenue is forecast to decline over the next 3 years (-1.2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 9KG is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has Keane Group performed over the past 5 years?

38.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 9KG has a large one-off loss of $11.9M impacting its June 30 2019 financial results.

Growing Profit Margin: 9KG's current net profit margins (0.5%) are lower than last year (3%).


Past Earnings Growth Analysis

Earnings Trend: 9KG has become profitable over the past 5 years, growing earnings by 38% per year.

Accelerating Growth: 9KG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 9KG had negative earnings growth (-83.8%) over the past year, making it difficult to compare to the Energy Services industry average (86.1%).


Return on Equity

High ROE: 9KG's Return on Equity (2.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Keane Group's financial position?


Financial Position Analysis

Short Term Liabilities: 9KG's short term assets ($349.3M) exceed its short term liabilities ($223.5M).

Long Term Liabilities: 9KG's short term assets ($349.3M) do not cover its long term liabilities ($376.1M).


Debt to Equity History and Analysis

Debt Level: 9KG's debt to equity ratio (74.3%) is considered high.

Reducing Debt: Insufficient data to determine if 9KG's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: 9KG has a high level of physical assets or inventory.

Debt Coverage by Assets: 9KG's debt is covered by short term assets (assets are 1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: 9KG is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: 9KG is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Keane Group's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.3%markettop25%3.6%industryaverage4.7%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate 9KG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 9KG's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 9KG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 9KG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 9KG's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure


CEO

Robert Drummond (58yo)

1.2yrs

Tenure

US$7,764,703

Compensation

Mr. Robert Wayne Drummond, Jr. has been the Chief Executive Officer and Director of Keane Group, Inc. since August 6, 2018. Mr. Drummond served as a Director of Key Energy Services, Inc. since November 23, ...


CEO Compensation Analysis

Compensation vs Market: Robert's total compensation ($USD7.76M) is above average for companies of similar size in the German market ($USD817.80K).

Compensation vs Earnings: Insufficient data to compare Robert's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
James Stewart
Executive Chairman8.6yrsUS$6.37m0.14% $619.3k
Robert Drummond
CEO & Director1.2yrsUS$7.76m0.062% $265.8k
Gregory Powell
President & CFO4.3yrsUS$4.93m0.12% $494.3k
Kevin McDonald
Executive VP2.8yrsUS$2.08m0.049% $208.9k
Paul DeBonis
Advisor to Chairman1yrsUS$1.89m0.064% $272.7k
Lamphung Ngo-Burns
Chief Accounting Officer2.6yrsno data0.013% $54.0k
Ted Lafferty
Chief Technology & Transformation Officer0.4yrsno datano data
John Lewis
Vice President of Health0.6yrsno datano data
Louis Wilpitz
Vice President of Sales & Marketing3.8yrsno datano data
Chuck Heaton
Vice President of Human Resources1.3yrsno datano data

1.3yrs

Average Tenure

54.5yo

Average Age

Experienced Management: 9KG's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
James Stewart
Executive Chairman8.6yrsUS$6.37m0.14% $619.3k
Robert Drummond
CEO & Director1.2yrsUS$7.76m0.062% $265.8k
Lenard Tessler
Director7yrsUS$87.50kno data
Dale Dusterhoft
Director3.6yrsUS$87.50k0.014% $59.7k
Gary Halverson
Independent Director3yrsUS$239.60k0.040% $171.4k
Lisa Gray
Director8.6yrsUS$87.50kno data
Marc G. Edwards
Lead Director0yrsUS$264.60k0.060% $256.4k
Lucas Batzer
Director3.6yrsUS$87.50kno data
Shawn Keane
Director8.6yrsUS$87.50kno data
Elmer Reed
Independent Director8.4yrsUS$239.60k0.033% $143.0k

7.0yrs

Average Tenure

58yo

Average Age

Experienced Board: 9KG's board of directors are considered experienced (7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

NexTier Oilfield Solutions Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NexTier Oilfield Solutions Inc.
  • Ticker: 9KG
  • Exchange: DB
  • Founded: 1973
  • Industry: Oil and Gas Equipment and Services
  • Sector: Energy
  • Market Cap: US$477.819m
  • Listing Market Cap: US$428.651m
  • Shares outstanding: 105.02m
  • Website: https://nextierofs.com

Number of Employees


Location

  • NexTier Oilfield Solutions Inc.
  • 1800 Post Oak Boulevard
  • Suite 450
  • Houston
  • Texas
  • 77056
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FRACNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 2017
9KGDB (Deutsche Boerse AG)YesCommon StockDEEURJan 2017

Biography

Keane Group, Inc. provides integrated well completion services primarily in the United States. Its principal service offerings include horizontal and vertical fracturing, wireline perforation and logging, and engineered solutions. The company also provides cementing and drilling services; and engineering software and technical guidance for remedial cementing applications and acidizing. Its customers primarily include integrated and large independent oil and natural gas exploration and production companies. The company has 29 hydraulic fracturing fleets, 34 wireline trucks, 24 cementing pumps, and other ancillary assets located in the Permian Basin, the Marcellus Shale/Utica Shale, the Eagle Ford Formation, the Bakken Formation, and other active oil and gas basins. Keane Group, Inc. was founded in 1973 and is headquartered in Houston, Texas. Keane Group, Inc. is a subsidiary of Keane Investor Holdings LLC. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/31 21:48
End of Day Share Price2019/10/30 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.