NasdaqCM:NESR

Stock Analysis Report

National Energy Services Reunited

Executive Summary

National Energy Services Reunited Corp., through its subsidiaries, provides oilfield services to oil and gas companies in the Middle East, North Africa, and the Asia Pacific regions.

Rewards

Trading at 67.9% below its fair value

Earnings are forecast to grow 25.18% per year

Earnings grew by 889% over the past year

Risk Analysis

Has a high level of debt

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Undervalued with reasonable growth potential.

Share Price & News

How has National Energy Services Reunited's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

2.9%

NESR

3.1%

US Energy Services

0.3%

US Market


1 Year Return

10.9%

NESR

-21.1%

US Energy Services

18.5%

US Market

Return vs Industry: NESR exceeded the US Energy Services industry which returned -21.1% over the past year.

Return vs Market: NESR underperformed the US Market which returned 18.5% over the past year.


Shareholder returns

NESRIndustryMarket
7 Day2.9%3.1%0.3%
30 Day27.9%0.5%1.5%
90 Day23.2%-4.0%5.7%
1 Year10.9%10.9%-18.7%-21.1%21.1%18.5%
3 Yearn/a-54.2%-60.4%45.9%36.4%
5 Yearn/a-50.6%-58.8%71.4%52.5%

Price Volatility Vs. Market

How volatile is National Energy Services Reunited's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is National Energy Services Reunited 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: NESR ($9.44) is trading below our estimate of fair value ($29.39)

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


Price To Earnings Ratio

PE vs Industry: NESR is good value based on its PE Ratio (9.8x) compared to the Energy Services industry average (15.5x).

PE vs Market: NESR is good value based on its PE Ratio (9.8x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: NESR is overvalued based on its PB Ratio (0.9x) compared to the US Energy Services industry average (0.7x).


Next Steps

Future Growth

How is National Energy Services Reunited forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

25.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NESR's forecast earnings growth (25.2% per year) is above the savings rate (1.7%).

Earnings vs Market: NESR's earnings (25.2% per year) are forecast to grow faster than the US market (14.2% per year).

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

Revenue vs Market: NESR's revenue (14% per year) is forecast to grow faster than the US market (7.4% per year).

High Growth Revenue: NESR's revenue (14% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NESR's Return on Equity is forecast to be low in 3 years time (9.2%).


Next Steps

Past Performance

How has National Energy Services Reunited performed over the past 5 years?

889.0%

Last years earnings growth


Earnings and Revenue History

Quality Earnings: NESR has a large one-off loss of $32.5M impacting its September 30 2019 financial results.

Growing Profit Margin: NESR's current net profit margins (9.5%) are higher than last year (4.4%).


Past Earnings Growth Analysis

Earnings Trend: Unable to establish if NESR's year-on-year earnings growth rate was positive over the past 5 years as it has been trading publicly for less than 3 years.

Accelerating Growth: Unable to compare NESR's past year earnings growth to its 5-year average as it has been trading publicly for less than 3 years.

Earnings vs Industry: NESR earnings growth over the past year (889%) exceeded the Energy Services industry -16.6%.


Return on Equity

High ROE: NESR's Return on Equity (9.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is National Energy Services Reunited's financial position?


Financial Position Analysis

Short Term Liabilities: NESR's short term assets ($380.2M) exceed its short term liabilities ($187.4M).

Long Term Liabilities: NESR's short term assets ($380.2M) do not cover its long term liabilities ($399.3M).


Debt to Equity History and Analysis

Debt Level: NESR's debt to equity ratio (42.4%) is considered high.

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

Debt Coverage: NESR's debt is well covered by operating cash flow (27%).

Interest Coverage: NESR's interest payments on its debt are well covered by EBIT (5.2x coverage).


Balance Sheet

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

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


Next Steps

Dividend

What is National Energy Services Reunited's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage4.0%forecastin3Yearsn/a

Current dividend yield vs market & industry

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

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

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


Next Steps

Management

What is the CEO of National Energy Services Reunited's salary, the management and board of directors tenure and is there insider trading?

0.9yrs

Average management tenure


CEO

Sherif Foda (50yo)

2.9yrs

Tenure

0

Mr. Sherif Foda has been the Chairman and Chief Executive Officer of National Energy Services Reunited Corp. since January 23, 2017 and serves as its Executive Chairman. Mr. Foda was Chairman of National E ...


Management Age and Tenure

0.9yrs

Average Tenure

50yo

Average Age

Experienced Management: NESR's management team is not considered experienced ( 0.9 years average tenure), which suggests a new team.


Board Age and Tenure

1.5yrs

Average Tenure

60.5yo

Average Age

Experienced Board: NESR's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: NESR insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$3,363,63508 Oct 19
Yasser Barami
EntityIndividual
Shares345,700
Max PriceUS$10.40
SellUS$008 Oct 19
Mubadarah Investments LLC
EntityCompany
Shares910,000
Max PriceUS$8.69
BuyUS$692,00008 Oct 19
Mubadarah Investments LLC
EntityCompany
Shares100,000
Max PriceUS$6.92
BuyUS$7,526,90704 Oct 19
SCF Partners, Inc.
EntityCompany
Shares1,134,255
Max PriceUS$6.71

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 28.9%.


Management Team

  • Tom Wood (62yo)

    Independent Director

    • Tenure: 2.9yrs
  • Chris Boone (50yo)

    Chief Financial Officer

    • Tenure: 0.6yrs
  • Sherif Foda (50yo)

    Executive Chairman & CEO

    • Tenure: 2.9yrs
  • Dhiraj Dudeja

    VP & Head of Commercial

    • Tenure: 0yrs
  • Haya Kablawi

    Corporate Financial Controller

    • Tenure: 0.9yrs
  • Salih Merghani

    Vice President of Operations

    • Tenure: 0.9yrs
  • Sahar Badran

    Head of Legal-Middle East

    • Tenure: 0.9yrs

Board Members

  • Andy Waite (59yo)

    Independent Director

    • Tenure: 1.5yrs
  • Tom Wood (62yo)

    Independent Director

    • Tenure: 2.9yrs
  • Antonio Campo Mejia (62yo)

    Lead Director

    • Tenure: 0yrs
  • Theresa Eaton

    Alternate Director

    • Tenure: 1.6yrs
  • Nadhmi Al-Nasr (63yo)

    Independent Director

    • Tenure: 1.5yrs
  • Sherif Foda (50yo)

    Executive Chairman & CEO

    • Tenure: 2.9yrs
  • Hala Zeibak (38yo)

    Independent Director

    • Tenure: 2.6yrs
  • Yousef Al Nowais

    Independent Director

    • Tenure: 0.08yrs
  • Amr Al Menhali

    Independent Director

    • Tenure: 0.08yrs

Company Information

National Energy Services Reunited Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: National Energy Services Reunited Corp.
  • Ticker: NESR
  • Exchange: NasdaqCM
  • Founded: 2017
  • Industry: Oil and Gas Equipment and Services
  • Sector: Energy
  • Market Cap: US$801.753m
  • Shares outstanding: 87.15m
  • Website: https://www.nesr.com

Number of Employees


Location

  • National Energy Services Reunited Corp.
  • 777 Post Oak Boulevard
  • 7th Floor
  • Houston
  • Texas
  • 77056
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NESRNasdaqCM (Nasdaq Capital Market)YesOrdinary SharesUSUSDJun 2017

Biography

National Energy Services Reunited Corp., through its subsidiaries, provides oilfield services to oil and gas companies in the Middle East, North Africa, and the Asia Pacific regions. It operates through Pr ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 00:51
End of Day Share Price2019/12/06 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.