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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
National Energy Services Reunited Corp. (XNAS:NESR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NESR
Name:
National Energy Services Reunited Corp. (XNAS:NESR)
Sector:
-
Industry:
Oil & Gas Equipment & Services
CEO:
Mr. Sherif Foda
Total Employees:
5,581
Our Technological Advancement Rating
Our Rating:
-
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ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NATIONAL ENERGY SERVICES REUNITED CORP.(NESR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND OIL & GAS EQUIPMENT & SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
7.14
One Month Price Target:
$7.17
Six Month Price Target :
$7.33
Likely Price in One Year's Time:
Ticker:
$7.53
Likely Trading Range Today Under (Normal Volatility)
$7.1
Price Upper limit ($) :
$7.19
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$6.56
This week:
$5.85
This month :
$4.56
Other Primary facts
Market Cap:
614.86M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
91.36M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
34.26%
-14.59%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$9.82
$8.59
$4.46
$5.69
Medium risk (<10%) entry points
Buy Call
Sell Call
$8.19
Buy Put:
Sell Put:
$7.93
$6.08
$6.35
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NESR
Sharpe Ratio:
0.98%
Comparison:
NESR, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -34.81% lower than the industry
& is -56.79% lower than the market/S&P 500 average
Average Returns/Yield of
NESR
Daily returns:
0.05%
Weekly returns:
0.24%
Monthly returns:
0.96%
Yearly returns:
19.19%
Comparison of returns:
Average annual returns/yield (last 3 years) is -40.22% below industry average
Classification:
NESR, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.85
Statistical test of Returns:
NESR has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.95%
Weekly Volatility:
8.84%
Monthly Volatility:
17.68%
Yearly Volatility:
61.26%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.39%
Volatility in last five trading days has been -64.73% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.07%
Weekly VaR:
-18.05%
Monthly VaR:
-36.10%
How Much Can the price of
NESR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-31%
Worst case (decline):
>85%
This translates to price declining to:
$4.90
This translates to price declining to:
$1.07
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
NESR is a 154.82% riskier investment compared to the market/S&P 500 & is 118.31% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -7.83% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NESR
Beta in relation to market/S&P 500--0.80
Expected beta in 1 year's time:
0.918
Expected beta in 3 year's time:
1.298
Unlevered (debt free) Beta:
0.483
Beta in relation to Nasdaq (XNAS):
0.59
Beta in relation to all global stocks::
0.57
Beta Comparison & Analysis
Beta of competitors/peers::
1.632
Beta is -50.77% lower than peers
Average Industry Beta:
23.957
Beta is -96.65% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
3.88%
Sustainable growth rate is -56.64% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.028
Alpha is -101.90% below industry average alpha yield
Alpha is 179% higher than market/& is unsustainably high
Analysis of Cost of Capital of
NESR
Equity cost of capital:
0.087
Equity cost of capital is -94.83% below industry mean WACC
Unlevered (without debt) cost of capital:
5.20%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$9.62
Revenue growth rate per share of (3Y):
0.85
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EPS:
$0.41
Expected Annual growth rate of EPS (3Y):
-3.06%
Expected future EPS growth rate is -87.20% lower than the Oil & Gas Equipment & Services industry
Free cash flow (FCF) per share:
$1.05
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Debt per share
-
EBITDA per share
$2.01
Valuation Analysis Today of
NESR
P/E Ratio:
17.11
P/E Ratio of Competitors/Peers:
86.3
P/E ratio is -80.18% lower than main peers & is -32.68% lower than the industry
Stock price/value with industry average P/E ratio: $10.42
NESR is -31.47% undervalued if valued using industry average P/E ratio
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P/S (Price to Sales ratio):
0.74
Price to sales ratio is -51.22% below the industry mean
P/B (Price to book value ratio):
0.85
Price to free cash flow: 6.78
Price to free cash flow ratio is -64.19% lower than the industry
Net income growth rate (3Y):
-
Dividend Analysis
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Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
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In-depth Debt & Leverage Analysis
Debt to equity ratio:
78.63%
Net debt to equity ratio:
-
Debt to assets ratio:
44.02%
Net debt to assets ratio:
-
Debt-to-asset ratio is -20.42% below industry average
Ability to repay debt:
Interest coverage ratio:
13.57
Interest coverage ratio is 350.27% more than industry average
Looking forward:
Debt growth rate:
0.00%
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Analysis of Key Statistics
Correlation of price movement with the market:
0.349
Statistical significance of correlation:
NESR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.416
Stock price is -16.21% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.416
Correlation of price movement with Nasdaq (^IXIC):
0
Covariance of price movement with the market:
-0.001
Kurtosis
11.158
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
1.427
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
NESR
Gross Profit Margin Ratio:
59%
Operating Profit Margin Ratio:
5.73%
Operating profit margin is -331.50% lower than the industry
Net Profit Margin Ratio:
59%
Effective Tax Rate:
15.62%
Effective tax rate is -66.66% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
3.88%
Return on equity (ROE) is -110.85% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.14%
Return on assets (ROA) is -146.45% lower than the industry
Financial Leverage:
1.8x
Current Ratio:
1.45
Current ratio is -37.54% below industry average
Cash Conversion Cycle (days):
50.6
Cash conversion cycle is -21.28% below industry average
The remaining useful life of property plant & equipment is: 3.1 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
157.4K
Each employee generates -41% less revenue than industry average revenue per employee
EBITDA generated per employee:
32.9K
Each employee generates -5% less EBITDA than industry average revenue per employee
Profit generated per employee:
6.8K
Each employee generates 31% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
-
-
Assets/Capital per employee
-
-
Research & Development (R&D) Analysis
-
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Competitors/Peer firms of
NESR
OASIS MIDSTREAM PARTNERS UNT (XNAS:OMP)
XOG
KINETIK HOLDINGS INC. (XNAS:KNTK)
Brooge Energy Ltd (XNAS:BROG)
NBLX
TELLURIAN INC. (XNYS:TELL)
DMC GLOBAL INC. (XNAS:BOOM)
CHORD ENERGY CORPORATION (XNAS:CHRD)
PATTERSON-UTI ENERGY, INC. (XNAS:PTEN)
Current Analyst Ratings
Strong buy�0%
Buy�4%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
9/30/21
Revenue:
878.52M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
749.69M
128.83M
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78.48M
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78.48M
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13.53M
125.33M
183.58M
50.35M
37.74M
44.73M
6.98M
37.74M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
-
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
-
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
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828.17M
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Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
NESR
2023
2024
2025
2026
2027
$7.57
$15.79
$16.64
$17.54
$18.49