Value
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.8 |
| P/S | 8.9 |
| EV/EBITDA | 4.4 |
| Fwd P/E | 9.1 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 11.6x
- ▸PEG: 0.10
NESR · Why this verdict
Why National Energy Services Reunit (NESR) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
National Energy Services Reunited has delivered 4 consecutive earnings beats and 34% revenue growth, but its valuation is near cyclical peak levels for an oil-field services company, and thin upside margin of only 6% makes new entries unattractive at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
NESR has beaten earnings estimates in each of the last 4 quarters with an average surprise of 18%, demonstrating consistent operational outperformance against analyst expectations in a cyclically sensitive business. Catalyst breakdown | NESR maintains its earnings beat streak through at least 2 more quarterly reports with positive EPS surprises. | ↑Improving |
| CounterServices companies in commodity cycles often see their beat streaks end abruptly when upstream capital budgets are cut, and forward estimates may not fully reflect that risk. | ||
Revenue grew 34% year-over-year with volume accumulation visible in on-balance volume trends, and the company converts 158% of net income to free cash flow, indicating high-quality earnings with minimal accounting distortion. Quality breakdown | Revenue growth remains above 15% year-over-year over the next 12 months as oilfield services activity stays elevated. | →Stable |
| CounterRevenue growth in oilfield services is tightly coupled to oil prices; a decline in crude below $60 per barrel could quickly reverse the current growth trajectory. | ||
Forward P/E of 10.8x relative to trailing earnings at a forward-to-trailing ratio of 0.27x signals that consensus analysts expect earnings to contract, which is consistent with mean-reversion risk following an energy-price surge. Bear case | Forward earnings estimates remain stable or increase over the next 2 quarters, keeping forward P/E above 9x. | ↑Improving |
| CounterIf oil market tightness persists, the forward P/E being below 12 may simply represent undervaluation rather than a peak signal. | ||
With a PEG ratio of 0.10 and forward P/E of 10.8x, NESR trades at a deep discount to its growth rate, suggesting the market is pricing in significant risk premium that may be excessive if earnings trajectory holds. Valuation breakdown | The stock price rises above $28 as analyst consensus re-rates the company once forward earnings estimates stabilize above $2.40 per share. | ↑Improving |
| CounterLow PEG ratios in cyclical businesses are often value traps; the denominator can collapse faster than the numerator, wiping out the apparent discount. | ||
NESR has beaten earnings estimates in each of the last 4 quarters with an average surprise of 18%, demonstrating consistent operational outperformance against analyst expectations in a cyclically sensitive business.
↑ImprovingCatalyst breakdown
- Expectation
- NESR maintains its earnings beat streak through at least 2 more quarterly reports with positive EPS surprises.
CounterServices companies in commodity cycles often see their beat streaks end abruptly when upstream capital budgets are cut, and forward estimates may not fully reflect that risk.
Revenue grew 34% year-over-year with volume accumulation visible in on-balance volume trends, and the company converts 158% of net income to free cash flow, indicating high-quality earnings with minimal accounting distortion.
→StableQuality breakdown
- Expectation
- Revenue growth remains above 15% year-over-year over the next 12 months as oilfield services activity stays elevated.
CounterRevenue growth in oilfield services is tightly coupled to oil prices; a decline in crude below $60 per barrel could quickly reverse the current growth trajectory.
Forward P/E of 10.8x relative to trailing earnings at a forward-to-trailing ratio of 0.27x signals that consensus analysts expect earnings to contract, which is consistent with mean-reversion risk following an energy-price surge.
↑ImprovingBear case
- Expectation
- Forward earnings estimates remain stable or increase over the next 2 quarters, keeping forward P/E above 9x.
CounterIf oil market tightness persists, the forward P/E being below 12 may simply represent undervaluation rather than a peak signal.
With a PEG ratio of 0.10 and forward P/E of 10.8x, NESR trades at a deep discount to its growth rate, suggesting the market is pricing in significant risk premium that may be excessive if earnings trajectory holds.
↑ImprovingValuation breakdown
- Expectation
- The stock price rises above $28 as analyst consensus re-rates the company once forward earnings estimates stabilize above $2.40 per share.
CounterLow PEG ratios in cyclical businesses are often value traps; the denominator can collapse faster than the numerator, wiping out the apparent discount.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.2 |
| ROA | 2.5 |
| Gross margin | 0.0 |
| Op margin | 3.6 |
| Net margin | 2.3 |
| Current ratio | 4.1 |
| FCF quality | 10.0 |
| Moat | 5.6 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 158% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 34% YoY
Momentum
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 1.8 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.7 |
| Price target | 7.5 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (7.0) — signal dampened
Insider
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $84,288,820 (2.889% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.8 |
| quality rank | 3.9 |
| growth rank | 8.1 |
- ▸Industry growth leader
Technical
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.1 |
| support resistance | 4.6 |
| 52w position | 8.4 |
| gap | 6.0 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 9.0 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 10.0 |
| debt equity | 8.7 |
- ▸High IV: 80%
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (5)
- MOMENTUM:4.7>=4.5
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:25d clear
- SEMI_CYCLE_PEAK:CLEAR
Failed (3)
- ASYMMETRY:0.3<1.5@spot
- INSIDER:2.89%=EXTREME
- MATERIALS_CYCLE_PEAK:fwd=11.6x,ratio=0.26x
Warning (1)
- MOMENTUM:4.7<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.28
Upside
+2.9%
Downside
10.5%
Sizing output
AVOID
SetupRange Bound — RSI 50 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 25d with 4/4 beat streak
SuitabilityAggressive — MCap $2.9B<$5B
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:4.7>=4.5. Top dim: Growth at 10.0; weakest: Quality at 4.2. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Growth at 10.0, Catalyst at 7.5, and Value at 7.0; the weakest are Quality at 4.2, Momentum at 4.7, and Insider at 5.2. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.28 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Four Quarter Beat Streak
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters.
- P2Strong Revenue Growth
Trip ifRevenue growth declines below 10% year-over-year for 2 consecutive quarters.
- P3Commodity Cycle Peak Risk
Trip ifForward P/E falls below 8x due to downward earnings revisions greater than 20%.
- P4Attractive Valuation Profile
Trip ifPrice drops below $24.28 stop-loss level or forward EPS estimates decline more than 15%.