OB:ARCHER

Stock Analysis Report

Executive Summary

Archer Limited, an oilfield service company, provides various oilfield products and services to the oil and gas industry.

Rewards

Trading at 83.3% below its fair value

Earnings are forecast to grow 84.66% per year

Risk Analysis

Highly volatile share price over past 3 months

Does not have a meaningful market cap (NOK465M)



Snowflake Analysis

Reasonable growth potential and fair value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-3.1%

ARCHER

-3.8%

NO Energy Services

-0.8%

NO Market


1 Year Return

-37.2%

ARCHER

-13.1%

NO Energy Services

4.9%

NO Market

Return vs Industry: ARCHER underperformed the Norwegian Energy Services industry which returned -10.6% over the past year.

Return vs Market: ARCHER underperformed the Norwegian Market which returned 4.5% over the past year.


Shareholder returns

ARCHERIndustryMarket
7 Day-3.1%-3.8%-0.8%
30 Day3.3%-4.5%1.1%
90 Day-8.8%1.3%4.4%
1 Year-37.2%-37.2%-11.3%-13.1%10.5%4.9%
3 Year-82.0%-82.0%-15.7%-21.0%31.4%15.1%
5 Year-89.8%-89.8%-23.0%-47.5%64.3%26.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Archer 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: ARCHER (NOK3.14) is trading below our estimate of fair value (NOK18.75)

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


Price To Earnings Ratio

PE vs Industry: ARCHER is unprofitable, so we can't compare its PE Ratio to the Energy Services industry average.

PE vs Market: ARCHER is unprofitable, so we can't compare its PE Ratio to the Norwegian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ARCHER's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: ARCHER is good value based on its PB Ratio (0.5x) compared to the NO Energy Services industry average (0.7x).


Next Steps

Future Growth

How is Archer forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

84.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARCHER is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.7%).

Earnings vs Market: ARCHER is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: ARCHER's is expected to become profitable in the next 3 years.

Revenue vs Market: ARCHER's revenue (6.3% per year) is forecast to grow faster than the Norwegian market (3.2% per year).

High Growth Revenue: ARCHER's revenue (6.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARCHER's Return on Equity is forecast to be low in 3 years time (12%).


Next Steps

Past Performance

How has Archer performed over the past 5 years?

30.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARCHER is currently unprofitable.

Growing Profit Margin: ARCHER is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: ARCHER is unprofitable, but has reduced losses over the past 5 years at a rate of 30.9% per year.

Accelerating Growth: Unable to compare ARCHER's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ARCHER is unprofitable, making it difficult to compare its past year earnings growth to the Energy Services industry (38.8%).


Return on Equity

High ROE: ARCHER has a negative Return on Equity (-112.2%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Archer's financial position?


Financial Position Analysis

Short Term Liabilities: ARCHER's short term assets ($249.3M) do not cover its short term liabilities ($704.3M).

Long Term Liabilities: ARCHER's short term assets ($249.3M) exceed its long term liabilities ($97.0M).


Debt to Equity History and Analysis

Debt Level: ARCHER's debt to equity ratio (638.3%) is considered high.

Reducing Debt: ARCHER's debt to equity ratio has increased from 126.4% to 638.3% over the past 5 years.


Balance Sheet

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

Debt Coverage by Assets: ARCHER's debt is not covered by short term assets (assets are 0.4x 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: Whilst unprofitable ARCHER has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: ARCHER is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 30.9% per year.


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%2.4%markettop25%5.5%industryaverage4.4%forecastin3Years0%

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate ARCHER'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 ARCHER's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ARCHER'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 ARCHER's dividend in 3 years as they are not forecast to pay a notable one for the Norwegian market.


Next Steps

Management

What is the CEO of Archer's salary, the management and board of directors tenure and is there insider trading?

1.6yrs

Average management tenure


CEO

Archer has no CEO, or we have no data on them.


Management Age and Tenure

1.6yrs

Average Tenure

Experienced Management: ARCHER's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Age and Tenure

1.3yrs

Average Tenure

55yo

Average Age

Experienced Board: ARCHER's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: ARCHER insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buykr163,00014 Nov 19
Dag Skindlo
EntityIndividual
Role
Chief Financial Officer
CFO & Executive VP of Strategy
Shares50,000
Max Pricekr3.26
Buykr33,448,41806 Jun 19
Greenwich Holdings Ltd.
EntityCompany
Shares8,059,854
Max Pricekr4.15

Ownership Breakdown

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


Management Team

  • Joachim Houeland

    Corporate Treasurer

    • John Lechner

      Senior Advisor

      • Tenure: 0.8yrs
    • Dag Skindlo (51yo)

      CFO & Executive VP of Strategy

      • Tenure: 3.8yrs
    • Kjell-Erik Østdahl (55yo)

      Executive Chairman

      • Tenure: 1.3yrs
    • Adam Todd

      General Counsel

      • Tenure: 2.3yrs
    • James Ayers

      Secretary


      Board Members

      • James O'Shaughnessy (55yo)

        Independent Director

        • Tenure: 1.3yrs
      • Kristian Melhuus (38yo)

        Director

        • Tenure: 0.7yrs
      • Peter Sharpe (60yo)

        Independent Director

        • Tenure: 0.2yrs
      • Giovanni Dell'Orto (74yo)

        Independent Director

        • Tenure: 8.9yrs
      • Kjell-Erik Østdahl (55yo)

        Executive Chairman

        • Tenure: 1.3yrs

      Company Information

      Archer Limited's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Archer Limited
      • Ticker: ARCHER
      • Exchange: OB
      • Founded: 2007
      • Industry: Oil and Gas Drilling
      • Sector: Energy
      • Market Cap: kr461.917m
      • Shares outstanding: 148.05m
      • Website: https://www.archerwell.com

      Number of Employees


      Location

      • Archer Limited
      • Par la Ville Place
      • 4th Floor
      • Hamilton
      • HM 08
      • Bermuda

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      ARCHEROB (Oslo Bors)YesOrdinary SharesNONOKOct 2007
      8SW1DB (Deutsche Boerse AG)YesOrdinary SharesDEEUROct 2007
      0RBALSE (London Stock Exchange)YesOrdinary SharesGBNOKOct 2007
      ARHV.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDOct 2007
      ARCHEOBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBNOKOct 2007

      Biography

      Archer Limited, an oilfield service company, provides various oilfield products and services to the oil and gas industry. It operates in two segments, Eastern Hemisphere and Western Hemisphere. The company provides oiltools, such as plugs and abandonment, slot recovery and P&A, cementing, and well cleaning solutions; land drilling and platform drilling services; and modular drilling rigs. It also offers engineering services, such as project management, construction and installations, multidiscipline engineering, consulting, and inspection services. In addition, the company provides cased hole logging, conveyance and mechanical/slickline, and R&D and technology development services. Further, it offers fluids, guarantor, international personnel, management, and equipment rental services, as well as performs rig inspections. The company operates in Angola, Argentina, Australia, Bolivia, Brazil, Canada, Congo, Indonesia, Malaysia, Nigeria, Norway, Saudi Arabia, the United Arab Emirates, the United Kingdom, and the United States. The company was formerly known as Seawell Limited and changed its name to Archer Limited in May 2011. Archer Limited was founded in 2007 and is based in Hamilton, Bermuda. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/25 21:28
      End of Day Share Price2020/01/24 00:00
      Earnings2019/09/30
      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.