Provides drilling services to exploration and production companies. Operates a fleet of land rigs in North America and internationally. Now — the numbers.
That much dependence is a risk in itself: if this one line weakens, the whole company feels it directly.
The company closed last year at a loss: costs ran above sales. The picture changes only if spending is reined in.
Average growth of 32% a year over the last 4 years. Red columns mark years that ended in a loss.
Before the clock runs out, either sales must climb sharply or new money must come in. This is the most critical line in the whole picture.
We compared this company with its own sector across five subjects.
A score of 50 means class average.
Clearly below the class average.
Clearly below the class average.
The price isn’t cheap next to earnings — that’s why this grade sits in the middle.
There is growth, but not at top-of-the-class tempo.
The stock has been running stronger than the market lately.
Business Quality: Profit power and business quality trail similar companies in the sector.
Financial Strength: The cash-and-debt balance is thin; the buffer for hard times is slim.
The stock trades 18% below its peak. The market has trimmed its expectations for the company.
Over the last 4 years, sales grew about 32% a year on average.
The company sells $3.7B a year; the problem isn’t sales — it’s costs running above that number.
A loss of $165.1M against $3.7B in annual sales.
At the current pace of spending, the cash lasts about 1.5 years. After that, the company needs to find new money.
On our five-subject report card, HP sits in the middle of the class: some subjects shine, others don’t. The grade moves as the numbers move.
The takeaway: HP has solid sales but closed last year at a loss. The road back to profit runs through spending discipline.