Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 11 Jul, 25 | NESR | Speculative Buy | USD 6.33 | USD 6.65 | USD 7.0 | 13 days | Closed |
5.06%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
National Energy Services Reunited Corp. provides oilfield services to oil and gas companies in the Middle East, North Africa, and the Asia Pacific regions. It operates through two segments, Production Services; and Drilling and Evaluation Services. The Production Services segment offers hydraulic fracturing services; coiled tubing services, including nitrogen lifting, fishing, milling, clean-out, scale removal, and other well applications; stimulation and pumping services; primary and remedial cementing services; nitrogen services; filtration services, as well as frac tanks and pumping units; and pipeline services, such as water filling and hydro testing, nitrogen purging, and de-gassing and pressure testing, as well as cutting/welding and cooling down piping/vessels systems. It also provides production assurance chemicals; laboratory services; artificial lift services; and surface and subsurface safety systems, high-pressure packer systems, flow controls, service tools, expandable liner technology, vacuum insulated tubing technology, and engineering capabilities with manufacturing capacity and testing facilities, as well as sources, treats, and disposes water for oil and gas, municipal, and industrial use. The Drilling and Evaluation Services segment offers drilling and workover rigs; rig services; fishing and remedial solutions; directional and turbines drilling services; drilling fluid systems and related technologies; wireline logging services; slickline services for removal of scale, wax and sand build-up, setting plugs, changing out gas lift valves, and fishing and other well applications; and well testing services to measure solids, gas, and oil and water produced from a well, as well as rents drilling tools. It also provides oilfield solutions for thru-tubing intervention; tubular running services; and a range of wellhead products, flow control equipment, and frac equipment. The company was incorporated in 2017 and is headquartered in Houston, Texas.
Improved EPS: Diluted earnings per share grew 10% year-over-year, rising from $0.10 to $0.11
Year-over-Year Revenue Growth: Revenue increased 2.1% from $296.8 million in Q1 2024 to $303.1 million in Q1 2025
Free Cash Flow Deterioration: Free cash flow turned negative at -$9.6 million, compared to +$31.2 million in Q1 2024
Decline in Adjusted EBITDA: Adjusted EBITDA fell 2.7% year-over-year and 28.4% sequentially to $62.5 million
NESR faces investment risk from its geographic concentration in the MENA region, which exposes it to heightened volatility from regional geopolitical tensions and seasonal disruptions
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 6.33 | 5.85 | 6.65 | 7.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Revenue and Profitability Overview: National Energy Services Reunited Corp. (NESR) reported revenue of $303.1 million for the quarter ended March 31, 2025, marking a modest 2.1% year-over-year increase. This growth came despite a notable sequential decline of 11.8% from Q4 2024, primarily attributed to seasonal factors such as the Ramadan period. Net income for the quarter rose to $10.4 million, up 4.1% compared to Q1 2024, reflecting steady profitability amidst operating headwinds.
Earnings per Share and Adjusted Metrics: Diluted earnings per share (EPS) for the quarter stood at $0.11, reflecting a 10% year-over-year growth. On a non-GAAP basis, adjusted diluted EPS was $0.14, slightly below the $0.15 recorded in the same quarter last year. Adjusted net income was reported at $13.0 million, a 7.7% decline from Q1 2024. The differences between GAAP and non-GAAP earnings include remediation expenditures, impairment charges, and reserve releases, reflecting the company’s ongoing restructuring and compliance efforts.
Adjusted EBITDA and Operational Margin: Adjusted EBITDA for the quarter was $62.5 million, down 2.7% year-over-year and 28.4% sequentially. This figure includes $2.6 million in adjustments related to non-operational charges. Despite the decline, the EBITDA margin stood at 20.6%, underlining NESR’s ability to maintain operational discipline amid a challenging macroeconomic and geopolitical environment in the MENA region.
Cash Flow and Balance Sheet Dynamics: Operating cash flow for Q1 2025 was $20.5 million, but free cash flow turned negative at $9.6 million, compared to a positive $31.2 million in Q1 2024. The decline was largely driven by seasonal increases in working capital during the holy month. Cash and cash equivalents decreased to $78.7 million from $108.0 million in the previous quarter, while total debt stood at $366.3 million, slightly down from year-end 2024. Net Debt increased to $287.6 million due to the reduction in cash despite ongoing debt repayments.
Strategic and Regional Positioning: NESR continues to benefit from its strong geographic presence in the MENA region, where upstream activity remains robust despite global economic pressures and falling commodity prices. Recent contract wins and accelerated deployment of advanced technologies, particularly in its NEDA portfolio, are expected to drive long-term growth. Management remains focused on operational efficiency, technology commercialization, and disciplined capital management.
Leadership Commentary and Outlook: Company leadership emphasized its commitment to countercyclical investment and long-term positioning, drawing parallels to its strategic response during the COVID-19 pandemic. Operational execution remained strong across the region, and internal enhancements have improved processes and control mechanisms. The management expects continued performance strength into 2025 and 2026, supported by new contracts and ongoing technological integration.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Speculative Buy’ recommendation has been given on National Energy Services Reunited Corp (NASDAQ: NESR) at the current market price of USD 6.33, as on July 11, 2025 at 10:45 AM PDT.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas Equipment & Services
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| NESR National Energy Services Reunited Corp Ordinary Shares |
-0.06 0.84% | 7.12 | 15.15 | - | 0.65 | 0.49 | 0.97 | 4.65 |
| SLB Schlumberger NV |
-0.975 2.74% | 34.66 | 14.01 | 12.05 | 1.70 | 2.86 | 1.94 | 8.58 |
| BKR Baker Hughes Co |
-0.09 0.20% | 45.66 | 12.90 | 15.72 | 1.34 | 2.20 | 1.44 | 8.87 |
| HAL Halliburton Company |
-0.455 1.97% | 22.62 | 12.44 | 10.36 | 1.42 | 3.54 | 1.72 | 8.38 |
| TS Tenaris SA ADR |
-0.31 0.81% | 37.84 | 5.88 | 7.97 | 1.37 | 1.24 | 1.19 | 3.33 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 11,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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