Fundamentals snapshot

Dawson Geophysical Company

DWSN · NMS · Energy · Oil & Gas Equipment & Services

Current price

$2.89

52-week range

$1.50 - $7.85

Market cap

$89.75M

One-glance verdict

Undervalued

$5.06 our estimate vs market $2.89

Balance sheet

Distressed

-3.10x Concerning

Net debt $13.92M. Interest coverage shows how many times profit covers the interest bill.

What stands out

2 Rewards 1 Risk

2 rewards · 1 risks

Reward Returns 20.0% on equity, ahead of 40% of its peers.
Reward Free cash flow was positive in 4/10 years.
Risk Insider ownership is only 1.2% (peer median: 3.1%).

View details ↓

What this company does

Dawson Geophysical Company

Dawson Geophysical Company helps oil and gas companies find where to drill by creating detailed underground maps using sound waves. They make money by selling these seismic data services, so their business success depends heavily on how much energy companies are willing to spend on exploration. This spending often rises and falls with the price of oil and natural gas.

How the company got here

Dawson Geophysical was founded in 1952 by L. Decker Dawson in Midland, Texas, to help oil companies find where to drill. The company grew by being an early adopter of new technology, most notably the shift from 2D to 3D seismic imaging, which gives a much more detailed picture of what's underground. A key event was its 2015 combination with TGC Industries, which expanded its operations across the United States and Canada. In 2022, the company became a subsidiary of Wilks Brothers, LLC, a family-owned investment firm.

What it actually does

Think of Dawson Geophysical as a company that gives the earth an ultrasound to find oil and gas. They provide services called seismic data acquisition, which involves sending powerful vibrations into the ground and recording the echoes that bounce back. These echoes are then processed by computers to create detailed 2D and 3D maps of the rock layers deep underground. Energy companies buy these maps to dramatically increase their chances of drilling a successful well, reducing the risk of spending millions on a dry hole.

Seismic Data Acquisition and Processing

This is the company's single, primary business. Dawson's crews work on land in the U.S. and Canada, using specialized trucks and thousands of small sensors to gather seismic data for clients. These clients, which include major oil and gas companies, pay Dawson a fee for conducting these surveys on a contract basis. The company does not own the energy reserves itself; it simply provides the service of mapping the underground geology. The majority of its business comes from operations within the United States.

What management is betting on now

The company is heavily investing in new technology to stay competitive, such as purchasing thousands of lightweight, wireless sensors called nodes. These modern tools allow crews to conduct surveys faster, more safely, and with higher detail than older, cable-based systems. Dawson is also applying its mapping technology to new and growing fields, such as monitoring underground sites for Carbon Capture Utilization and Storage (CCUS) projects. Finally, the company recently acquired assets from a competitor to increase its equipment capacity and create cost synergies (savings that come from combining operations).

Price history

How the share price has moved

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Earnings history

Last 8 quarters — what happened

Click any quarter to read the call summary and what the numbers say.

Free cash flow by quarter (oldest to newest)

FY2024 Q3 $-4.30M FY2024 Q4 $-5.73M FY2025 Q2 $14.19M FY2025 Q3 $4.71M FY2025 Q4 $-13.50M FY2026 Q1 $-1.90M FY2026 Q2 $6.24M

Revenue —

Net income $-3.44M

Diluted EPS -0.11

Operating cash flow $6.46M

Free cash flow $6.24M

Revenue —

Net income $7.66M

Diluted EPS 0.25

Operating cash flow $-465.00K

Free cash flow $-1.90M

Revenue —

Net income $569.00K

Diluted EPS 0.03

Operating cash flow $-12.79M

Free cash flow $-13.50M

Revenue —

Net income $-1.15M

Diluted EPS -0.04

Operating cash flow $10.14M

Free cash flow $4.71M

Revenue —

Net income $-2.35M

Diluted EPS -0.08

Operating cash flow $14.88M

Free cash flow $14.19M

Revenue —

Net income $992.00K

Diluted EPS 0.03

Operating cash flow $1.75M

Free cash flow —

Revenue —

Net income $-802.00K

Diluted EPS -0.02

Operating cash flow $-5.42M

Free cash flow $-5.73M

Revenue $8.00K

Net income $-5.62M

Diluted EPS -0.18

Operating cash flow $-4.23M

Free cash flow $-4.30M

Is it cheap or expensive?

Fair value $5.06 vs current price $2.89

Our most-likely fair value is $5.06 a share — about 75.1% above today's price of $2.89, so the stock currently looks cheap (undervalued).

undervalued

We estimate the cash this business should generate over the next 10 years and beyond, then convert it to today's money for a fair value per share, in its trading currency. Cautious, middle and optimistic growth cases give a range. Not for banks/insurers.

Base

Growth 4.0% · Discount 7.2% · Terminal 2.5%

$5.06

Bear

Growth 2.5% · Discount 7.2% · Terminal 2.5%

$4.59

Bull

Growth 25.0% · Discount 7.2% · Terminal 2.5%

$17.58

Is it drowning in debt?

Distressed

Net debt $13.9M. Interest coverage -3.1x.

Net debt $13.92M

Interest coverage -3.10x

Dawson Geophysical Company's profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 4 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.

Distressed

Worse cushion Baseline Better cushion

DWSN BASELINE Dawson Geophysical Company

Total debt $20.05M Interest coverage -3.10x This is the baseline the peer rows are being compared against.

GEOS Geospace Technologies Corporation

Total debt $663.00K Interest coverage -93.69x Neither company has much profit cushion over interest right now.

TUSK Mammoth Energy Services, Inc.

Total debt $5.01M Interest coverage -2.96x Neither company has much profit cushion over interest right now.

NINE Nine Energy Service, Inc.

Total debt $128.87M Interest coverage 0.01x This peer still has a real interest-payment cushion, while DWSN does not.

KLXE KLX Energy Services Holdings, Inc.

Total debt $343.00M Interest coverage -0.67x Neither company has much profit cushion over interest right now.

What you should know

The case for and against DWSN

2 Rewards 1 Risk

Rewards

Returns 20.0% on equity, ahead of 40% of its peers.
Free cash flow was positive in 4/10 years.

Risks

Insider ownership is only 1.2% (peer median: 3.1%).

The numbers

All the key metrics, grouped by purpose

Tap any ? icon to learn what it means.

Valuation

How expensive the stock looks

P/E (TTM)

24.08x

Forward P/E

-5.78x

P/B

4.48x

P/S

0.86x

EV/EBITDA

8.28x

PEG ratio

12.17x

Profitability

How much profit each dollar creates

Gross margin

22.3%

Operating margin

-16.9%

Net margin

3.5%

ROE

20.0%

ROA

6.6%

Health

Liquidity and balance-sheet strength

Debt / equity

1.00x

Current ratio

0.88x

Quick ratio

0.57x

Total debt

$20.05M

Total cash

$6.12M

Growth

How the business has been compounding

Revenue TTM

$72.56M

Revenue 5Y CAGR

-11.2%

EPS TTM

0.12

EPS 5Y CAGR

—

Cash flow

How much cash the business throws off

Operating CF TTM

$3.35M

Free CF TTM

$7.15M

FCF margin

9.8%

Dividend

Shareholder payout

Yield

—

Payout ratio

0.0%

Last ex-div date

2024-04-19

Dawson Geophysical Company

$5.06 our estimate vs market $2.89

-3.10x Concerning

2 rewards · 1 risks

Dawson Geophysical Company

How the company got here

What it actually does

Seismic Data Acquisition and Processing

What management is betting on now

How the share price has moved

Last 8 quarters — what happened

Fair value ? $5.06 vs current price $2.89

Distressed

The case for and against DWSN

Rewards

Risks

All the key metrics, grouped by purpose

How expensive the stock looks

How much profit each dollar creates

Liquidity and balance-sheet strength

How the business has been compounding

How much cash the business throws off

Shareholder payout

Fair value $5.06 vs current price $2.89