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    Assessing Patterson UTI Energy (PTEN) Valuation After Strong Rig Activity And NexTier Integration

    Simply Wall St·01/08/2026 22:29:58
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    Patterson-UTI Energy (PTEN) is back in focus after reporting an average of 93 to 94 drilling rigs operating in the U.S., along with a larger North American footprint following its merger with NexTier.

    See our latest analysis for Patterson-UTI Energy.

    The recent update on rig activity comes as the share price has gained 30.91% over the past 90 days and 11.23% over the past 30 days. However, the 1 year total shareholder return of a 12.05% decline and 3 year total shareholder return of a 54.98% decline show that, for now, short term momentum is building against a weaker longer term record.

    If you are looking beyond oilfield services and want more ideas with different risk profiles, this could be a good moment to scan aerospace and defense stocks as a fresh hunting ground.

    PTEN now trades at US$7.03, sits close to the average analyst target and screens strongly on value. Is the market still underestimating a challenged but sizable rig operator, or already baking in any future recovery?

    Most Popular Narrative: 2.8% Undervalued

    With Patterson-UTI Energy closing at US$7.03 versus a narrative fair value of about US$7.23, the current price sits just under that estimate. That estimate hinges on a detailed set of cash flow, margin and multiple assumptions.

    Successful strategic integrations (NexTier, Ulterra) are only in early stages of realization, with ongoing operational synergies and expanded full-suite service offerings expected to enhance earnings growth and operating leverage over the next several years.

    Read the complete narrative.

    Want to know what backs that US$7.23 fair value? Revenue drifting slightly lower, margins shifting higher, and a future earnings multiple below the sector norm all sit at the core of this narrative.

    Result: Fair Value of $7.23 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, this hinges on activity not softening further and on capital spending staying in check, as slower drilling or heavier investment could quickly pressure margins and cash returns.

    Find out about the key risks to this Patterson-UTI Energy narrative.

    Build Your Own Patterson-UTI Energy Narrative

    If you see the numbers differently, or simply prefer to test your own assumptions against the data, you can build a custom Patterson-UTI story in just a few minutes, starting with Do it your way.

    A great starting point for your Patterson-UTI Energy research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

    Looking for more investment ideas?

    If PTEN has caught your eye, do not stop here, the market is full of other angles that could fit your goals and risk comfort better.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.