A Look At Helmerich & Payne (HP) Valuation After Revenue Growth And A Swing To Quarterly Net Loss

Why Helmerich & Payne’s latest earnings matter for shareholders

Helmerich & Payne (HP) just posted first quarter results that paired revenue of US$1,017.03 million with a net loss of US$96.71 million, a clear shift from the profit reported a year earlier.

See our latest analysis for Helmerich & Payne.

Despite swinging to a quarterly loss, Helmerich & Payne’s share price has gained 22.46% over the past 90 days and delivered a 32.48% total shareholder return over the last year, suggesting recent momentum has been building rather than fading.

If this update has you thinking about where else the market is finding opportunity, it could be a good moment to scan 24 power grid technology and infrastructure stocks as another potential hunting ground.

With the shares up strongly over the past year, yet trading around 5% below the average analyst price target and at a modelled intrinsic discount of roughly 48%, you have to ask: is there still a buying opportunity here, or is the market already pricing in future growth?

Most Popular Narrative: 10.1% Overvalued

With Helmerich & Payne closing at $33.31 against a narrative fair value of about $30.27, the most followed storyline sees the shares trading ahead of that estimate while still hinging on a very specific growth and margin path.

The company's growing international footprint, highlighted by the successful KCA integration and new tender opportunities in Saudi Arabia and Argentina, positions H&P to capture incremental market share and expand EBITDA as geopolitical instability and supply concerns reinforce demand for high-spec rigs.

Read the complete narrative.

Curious what kind of revenue ramp, margin rebuild and future earnings multiple are needed to back that fair value math? The narrative leans on a detailed earnings trajectory and a specific discount rate that could surprise you once you see the full set of assumptions.

Result: Fair Value of $30.27 (OVERVALUED)

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

However, if U.S. shale activity softens or rig overcapacity persists, weaker day rates and lower utilization could quickly challenge the upbeat fair value story.

Find out about the key risks to this Helmerich & Payne narrative.

Another Angle: Multiples Point To A Different Story

While the most popular narrative sees Helmerich & Payne as about 10.1% overvalued versus a fair value of $30.27, the simple P/S yardstick paints a different picture. At 0.8x sales, HP sits below the US Energy Services industry at 1.2x and well under peers at 1.7x, and even slightly under its own 0.9x fair ratio.

That kind of gap can hint at a valuation cushion. It can also reflect real concerns around profitability and balance sheet pressure. Which side of that trade do you think you are on?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Mixed messages in the story so far? Take a moment to look through the data yourself and weigh both sides, including the 3 key rewards and 3 important warning signs.

Looking for more investment ideas?

If this update has sharpened your thinking, do not stop here. The broader market is full of other opportunities that could better match your goals and risk comfort.

• Target quality at a discount by reviewing our 56 high quality undervalued stocks, which filters for companies combining strong fundamentals with prices that may not fully reflect their strengths.
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• Spot future leaders early using the screener containing 24 high quality undiscovered gems, a focused set of under-the-radar names with solid underlying metrics that many investors may be overlooking today.

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.

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