3 Resilient Stocks in the Oil and Gas Drilling Industry
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 07 2024
0mins
Source: NASDAQ.COM
Industry Challenges: The Zacks Oil and Gas - Drilling industry faces declining U.S. rig counts, overcapacity limiting profit margins, and a bearish outlook indicated by a low Zacks Industry Rank, leading to concerns about future revenue and operational performance.
Stock Recommendations: Despite the industry's struggles, companies like Valaris Limited, Helmerich & Payne, and Nabors Industries show potential for growth, with significant earnings estimates and strong market positions, making them worth considering for investment.
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Analyst Views on HP
Wall Street analysts forecast HP stock price to fall
13 Analyst Rating
6 Buy
6 Hold
1 Sell
Moderate Buy
Current: 32.870
Low
26.00
Averages
31.45
High
36.00
Current: 32.870
Low
26.00
Averages
31.45
High
36.00
About HP
Helmerich & Payne, Inc., through its subsidiaries, designs, fabricates and operates high-performance drilling rigs in conventional and unconventional plays around the world. It develops and implements advanced automation, directional drilling and survey management technologies. Its segments include North America Solutions, International Solutions, and Offshore Gulf of Mexico. The North America Solutions segment has operations which are located in Texas and other states, including Colorado, Louisiana, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Utah, and West Virginia. The Offshore Gulf of Mexico segment has operations that are located in Louisiana and in the United States federal waters in the Gulf of Mexico. The International Solutions segment has rigs and/or services located in five international locations: Argentina, Australia, Bahrain, Colombia, and Saudi Arabia. It owns and operates a number of commercial real estate properties located in Tulsa, Oklahoma.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Helmerich & Payne Q1 2026 Earnings Call Highlights
- Financial Performance Exceeds Expectations: Helmerich & Payne reported $1 billion in revenue for Q1 2026, marking the third consecutive quarter at this level, with adjusted EBITDA of $230 million driven by strong performance in the International Solutions segment, despite a net loss of $0.98 per share impacted by $103 million in non-cash charges.
- Operational Efficiency Improvement: The company averaged 143 rigs in operation during the first quarter, with North American Solutions generating a direct margin of $239 million, indicating its competitive edge and technological advantages, and is expected to maintain an operational rig count of 132 to 138 in the second quarter.
- Technological Innovation Advancement: The newly launched FlexRobotics automated drilling technology is seen as a key advancement in enhancing safety and capability, with management emphasizing continued investment in innovation to strengthen global competitiveness and create value.
- Optimistic Future Outlook: Management anticipates a gradual recovery in oil and gas activity in the latter half of 2026, with International Solutions expected to generate direct margins between $12 million and $22 million, reflecting confidence in market recovery while continuing to focus on deleveraging and shareholder returns.
See More
Helmerich & Payne Q1 Earnings Analysis
- Earnings Performance: Helmerich & Payne reported a Q1 non-GAAP EPS of -$0.15, missing expectations by $0.26, indicating challenges in profitability that may affect investor confidence.
- Revenue Growth: The company achieved revenues of $1.02 billion, a 50.6% year-over-year increase, exceeding market expectations by $31.46 million, reflecting strong business momentum amid recovering market demand.
- Future Outlook: The direct margin for North America Solutions is expected to range between $205 million and $230 million, with an average contracted rig count of approximately 132 to 138, indicating stability and growth potential in the North American market.
- Expense Projections: Depreciation for fiscal year 2026 is expected to be around $700 million, with R&D expenses at approximately $25 million and general administrative expenses between $265 million and $285 million, demonstrating a cautious approach to cost control and R&D investment.
See More
Helmerich & Payne to Announce Q1 Earnings on February 5th
- Earnings Announcement Date: Helmerich & Payne (HP) is set to release its Q1 earnings report on February 5th before market open, with a consensus EPS estimate of $0.11, reflecting an 84.5% year-over-year decline, indicating significant profitability challenges.
- Revenue Expectations: The anticipated revenue for Q1 is $988.54 million, representing a 46.0% year-over-year increase, highlighting the company's potential for revenue growth despite profitability pressures.
- Historical Performance Review: Over the past two years, HP has beaten EPS estimates 38% of the time and revenue estimates 63% of the time, demonstrating relative stability in revenue performance despite earnings volatility.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen one upward revision and five downward revisions, while revenue estimates have experienced five upward revisions with no downward adjustments, indicating increased market confidence in revenue growth but ongoing concerns regarding profitability.
See More
PayPal Shares Plunge 20% Amid Profit Warning
- Profit Warning: PayPal warned that its adjusted profits for 2026 could see a low-single-digit percentage decline, leading to a more than 20% drop in stock price by the close of trading, indicating severe market challenges ahead.
- Lackluster Growth: In the fourth quarter, revenue grew only 4% year-over-year to $8.7 billion, with active accounts increasing just 1% to 439 million and payment transactions rising 2% to 6.8 billion, failing to meet growth expectations and impacting investor confidence.
- Intensifying Competition: PayPal faces fierce competition from tech giants like Apple and Google, who pose formidable threats with their technical expertise and large user bases, further exacerbating market pressures on PayPal's business model.
- Executive Change: To tackle these challenges, PayPal's board decided to replace outgoing CEO Alex Chriss with Enrique Lores, former CEO of HP, who will take over on March 1, aiming to leverage his leadership experience to drive the company's transformation.
See More
Palantir and Teradyne Stocks Surge Post Earnings
- Palantir Stock Surge: Following a fourth-quarter report that exceeded expectations, Palantir's shares jumped over 11%, driven by increased spending on AI data tools from businesses and government agencies, highlighting its potential as a rapidly growing and highly profitable software and consulting firm.
- Teradyne's Strong Performance: Teradyne's stock surged more than 20% after reporting better-than-expected fourth-quarter results, with management's fiscal Q1 guidance for 2026 significantly surpassing estimates, indicating robust demand that solidifies its market position.
- Sandisk's Continued Rise: Sandisk's stock rose another 4% after closing at record highs for four consecutive sessions, reflecting a more than 180% increase year-to-date, driven by strong momentum in AI infrastructure trades, despite JPMorgan suspending its rating for policy reasons.
- Alphabet's Financing Update: Alphabet's Waymo announced a $16 billion raise at a $126 billion valuation, with Alphabet contributing $13 billion, as analysts remain optimistic about fundamentals, forecasting an acceleration in the large-cap advertising market by 2026.
See More
Seadrill (SDRL) Shares Surge 8.9% on $235M New Contracts Announcement
- Contract Signing Boost: Seadrill announced multiple offshore drilling contracts totaling approximately $235 million, significantly enhancing its revenue backlog and earnings visibility into 2026-2027, which is expected to positively impact future performance.
- Strong Stock Performance: In the latest trading session, Seadrill shares surged 8.9% to close at $38.16, with trading volume far exceeding normal levels, reflecting strong investor confidence in the company's outlook.
- Key Contract Details: Notable contracts include a $157 million ultra-deepwater drillship contract set to commence in Q2 2026 for 440 days, along with a $78 million accommodation contract, further strengthening the company's competitive position in the Norwegian market.
- Earnings Outlook Analysis: Although the upcoming quarterly EPS is projected at $0.07, representing a 93.5% year-over-year decline, revenues are expected to reach $332 million, up 14.9% from the previous year, indicating resilience and potential growth capacity amid challenges.
See More
Helmerich & Payne Q1 2026 Earnings Call Highlights
- Financial Performance Exceeds Expectations: Helmerich & Payne reported $1 billion in revenue for Q1 2026, marking the third consecutive quarter at this level, with adjusted EBITDA of $230 million driven by strong performance in the International Solutions segment, despite a net loss of $0.98 per share impacted by $103 million in non-cash charges.
- Operational Efficiency Improvement: The company averaged 143 rigs in operation during the first quarter, with North American Solutions generating a direct margin of $239 million, indicating its competitive edge and technological advantages, and is expected to maintain an operational rig count of 132 to 138 in the second quarter.
- Technological Innovation Advancement: The newly launched FlexRobotics automated drilling technology is seen as a key advancement in enhancing safety and capability, with management emphasizing continued investment in innovation to strengthen global competitiveness and create value.
- Optimistic Future Outlook: Management anticipates a gradual recovery in oil and gas activity in the latter half of 2026, with International Solutions expected to generate direct margins between $12 million and $22 million, reflecting confidence in market recovery while continuing to focus on deleveraging and shareholder returns.
See More
Helmerich & Payne Q1 Earnings Analysis
- Earnings Performance: Helmerich & Payne reported a Q1 non-GAAP EPS of -$0.15, missing expectations by $0.26, indicating challenges in profitability that may affect investor confidence.
- Revenue Growth: The company achieved revenues of $1.02 billion, a 50.6% year-over-year increase, exceeding market expectations by $31.46 million, reflecting strong business momentum amid recovering market demand.
- Future Outlook: The direct margin for North America Solutions is expected to range between $205 million and $230 million, with an average contracted rig count of approximately 132 to 138, indicating stability and growth potential in the North American market.
- Expense Projections: Depreciation for fiscal year 2026 is expected to be around $700 million, with R&D expenses at approximately $25 million and general administrative expenses between $265 million and $285 million, demonstrating a cautious approach to cost control and R&D investment.
See More
Helmerich & Payne to Announce Q1 Earnings on February 5th
- Earnings Announcement Date: Helmerich & Payne (HP) is set to release its Q1 earnings report on February 5th before market open, with a consensus EPS estimate of $0.11, reflecting an 84.5% year-over-year decline, indicating significant profitability challenges.
- Revenue Expectations: The anticipated revenue for Q1 is $988.54 million, representing a 46.0% year-over-year increase, highlighting the company's potential for revenue growth despite profitability pressures.
- Historical Performance Review: Over the past two years, HP has beaten EPS estimates 38% of the time and revenue estimates 63% of the time, demonstrating relative stability in revenue performance despite earnings volatility.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen one upward revision and five downward revisions, while revenue estimates have experienced five upward revisions with no downward adjustments, indicating increased market confidence in revenue growth but ongoing concerns regarding profitability.
See More
PayPal Shares Plunge 20% Amid Profit Warning
- Profit Warning: PayPal warned that its adjusted profits for 2026 could see a low-single-digit percentage decline, leading to a more than 20% drop in stock price by the close of trading, indicating severe market challenges ahead.
- Lackluster Growth: In the fourth quarter, revenue grew only 4% year-over-year to $8.7 billion, with active accounts increasing just 1% to 439 million and payment transactions rising 2% to 6.8 billion, failing to meet growth expectations and impacting investor confidence.
- Intensifying Competition: PayPal faces fierce competition from tech giants like Apple and Google, who pose formidable threats with their technical expertise and large user bases, further exacerbating market pressures on PayPal's business model.
- Executive Change: To tackle these challenges, PayPal's board decided to replace outgoing CEO Alex Chriss with Enrique Lores, former CEO of HP, who will take over on March 1, aiming to leverage his leadership experience to drive the company's transformation.
See More
Palantir and Teradyne Stocks Surge Post Earnings
- Palantir Stock Surge: Following a fourth-quarter report that exceeded expectations, Palantir's shares jumped over 11%, driven by increased spending on AI data tools from businesses and government agencies, highlighting its potential as a rapidly growing and highly profitable software and consulting firm.
- Teradyne's Strong Performance: Teradyne's stock surged more than 20% after reporting better-than-expected fourth-quarter results, with management's fiscal Q1 guidance for 2026 significantly surpassing estimates, indicating robust demand that solidifies its market position.
- Sandisk's Continued Rise: Sandisk's stock rose another 4% after closing at record highs for four consecutive sessions, reflecting a more than 180% increase year-to-date, driven by strong momentum in AI infrastructure trades, despite JPMorgan suspending its rating for policy reasons.
- Alphabet's Financing Update: Alphabet's Waymo announced a $16 billion raise at a $126 billion valuation, with Alphabet contributing $13 billion, as analysts remain optimistic about fundamentals, forecasting an acceleration in the large-cap advertising market by 2026.
See More
Seadrill (SDRL) Shares Surge 8.9% on $235M New Contracts Announcement
- Contract Signing Boost: Seadrill announced multiple offshore drilling contracts totaling approximately $235 million, significantly enhancing its revenue backlog and earnings visibility into 2026-2027, which is expected to positively impact future performance.
- Strong Stock Performance: In the latest trading session, Seadrill shares surged 8.9% to close at $38.16, with trading volume far exceeding normal levels, reflecting strong investor confidence in the company's outlook.
- Key Contract Details: Notable contracts include a $157 million ultra-deepwater drillship contract set to commence in Q2 2026 for 440 days, along with a $78 million accommodation contract, further strengthening the company's competitive position in the Norwegian market.
- Earnings Outlook Analysis: Although the upcoming quarterly EPS is projected at $0.07, representing a 93.5% year-over-year decline, revenues are expected to reach $332 million, up 14.9% from the previous year, indicating resilience and potential growth capacity amid challenges.
See More
