One-glance verdict
Undervalued
$21.95 our estimate vs market $12.85
Wall Street consensus: $14.07 (-35.9% lower than our fair-value estimate)
41% below our estimate, below the bear case
Fundamentals snapshot
Patterson-UTI Energy, Inc.
PTEN · NMS · Energy · Oil & Gas Drilling
Current price
$12.85
52-week range
$5.10 - $13.39
Market cap
$4.90B
Balance sheet
Distressed
-0.56x Concerning
Net debt $1.08B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Free cash flow was positive in 8/10 years.
- Reward Dividend yield is 3.1% with 23-year payout history.
- Risk Net debt grew 20.0% over 3 years.
- Risk Operating margin compressed from 8.0% to -0.6% over 3 years.
What this company does
Patterson-UTI Energy, Inc.
Patterson-UTI Energy acts like a specialized construction company for the oil and gas industry, providing the drilling rigs and expert crews that energy companies hire to access underground reserves. The company makes most of its money from two main activities: contract drilling and completion services, which includes hydraulic fracturing (a process that uses high-pressure fluid to break rock and release oil or gas). Because its business depends on new projects, Patterson-UTI's financial success is closely tied to overall drilling activity, which often rises and falls with energy prices.
How the company got here
Patterson-UTI's current form began with the 2001 merger of two separate companies, Patterson Energy and UTI Energy, which were both involved in drilling for oil and gas. For many years, the combined company grew by acquiring other drilling businesses. A major turning point came in 2023 when it merged with NexTier Oilfield Solutions, which significantly expanded its business into well completions (the process of getting a well ready to produce oil or gas). More recently, it acquired Ulterra in 2024, adding a new business line focused on making and selling specialized drilling tools. These moves have transformed the company from being primarily a drilling contractor into a broader oilfield services provider.
What it actually does
Think of Patterson-UTI as a highly specialized contractor for the big oil and gas companies. When an energy company wants to get oil or natural gas out of the ground, they hire Patterson-UTI to do the heavy lifting of drilling the wells and preparing them to start producing. Patterson-UTI provides the massive drilling rigs, the expert crews, and the specific services needed to break up underground rock formations to release the oil and gas. They primarily operate on land in the United States and Canada, serving as a crucial partner for energy exploration and production companies.
Drilling Services
This is the company's original and largest business, making up nearly half of its profits. This segment provides the land-based drilling rigs and the skilled crews that operate them under contract for oil and gas producers. Essentially, an energy company pays Patterson-UTI a daily fee (known as a dayrate) to use its equipment and people to drill a well. This part of the business also includes advanced technologies to help steer the drill bit accurately underground.
Completion Services
After a well is drilled, it needs to be 'completed' before it can produce oil or gas, and that's what this segment does. Its main service is hydraulic fracturing, often called 'fracking,' which involves pumping a mixture of water, sand, and chemicals at high pressure to crack open the underground rock and let the oil and gas flow out. This business became a much larger part of the company after its 2023 merger with NexTier. This segment is a major contributor to the company's revenue, representing about 39% of its adjusted gross profit (a measure of profit from its core business operations).
Drilling Products
This is the company's newest and smallest business line, added through an acquisition in 2024. This segment designs, manufactures, and sells the highly engineered tools that go on the end of the drill pipe, most importantly the drill bits that cut through the rock. By selling these critical parts, the company adds another way to make money from the well-creation process. This is a smaller but growing slice of the company, making up about 12% of its adjusted gross profit (a measure of profit from its core business operations).
What management is betting on now
Management is focused on transforming the company into a more integrated and technology-driven energy services provider, rather than just a cyclical drilling company. They are investing heavily in higher-quality, more efficient equipment, such as drilling rigs and fracking fleets that can run on natural gas, which customers prefer. The company is also pushing digital technology and automation to make drilling and completions faster and more accurate. A key part of their financial strategy is to generate strong free cash flow (the cash left over after paying for operating expenses and equipment) and return at least half of it to investors through dividends (a portion of profits paid to shareholders) and share buybacks (when the company buys its own stock to reduce the number of shares available).
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$115.70M
FY2024 Q4
$175.48M
FY2025 Q1
$46.31M
FY2025 Q2
$-4.46M
FY2025 Q3
$71.32M
FY2025 Q4
$259.01M
FY2026 Q1
$-52.77M
FY2026 Q2
$-99.84M
Revenue
$1.23B
Net income
$-19.60M
Diluted EPS
-0.05
Operating cash flow
$56.08M
Free cash flow
$-99.84M
Fetching…
Sources
Revenue
$1.12B
Net income
$-24.63M
Diluted EPS
-0.06
Operating cash flow
$63.86M
Free cash flow
$-52.77M
Fetching…
Sources
Revenue
$1.15B
Net income
$-9.09M
Diluted EPS
-0.01
Operating cash flow
$397.53M
Free cash flow
$259.01M
Fetching…
Sources
Revenue
$1.18B
Net income
$-36.40M
Diluted EPS
-0.10
Operating cash flow
$215.80M
Free cash flow
$71.32M
Fetching…
Sources
Revenue
$1.22B
Net income
$-49.14M
Diluted EPS
-0.13
Operating cash flow
$139.75M
Free cash flow
$-4.46M
Fetching…
Sources
Revenue
$1.28B
Net income
$1.00M
Diluted EPS
0.00
Operating cash flow
$208.14M
Free cash flow
$46.31M
Fetching…
Sources
Revenue
$1.16B
Net income
$-51.58M
Diluted EPS
-0.10
Operating cash flow
$315.83M
Free cash flow
$175.48M
Fetching…
Sources
Revenue
$1.36B
Net income
$-978.76M
Diluted EPS
-2.50
Operating cash flow
$296.29M
Free cash flow
$115.70M
Fetching…
Sources
Is it cheap or expensive?
Fair value $21.95 vs current price $12.85
Wall Street consensus is the average analyst price target: $14.07 (-35.9% lower than our fair-value estimate).
Our most-likely fair value is $21.95 a share — about 70.8% above today's price of $12.85, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $1.1B. Interest coverage -0.6x.
Net debt
$1.08B
Interest coverage
-0.56x
Patterson-UTI Energy, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
PTEN
BASELINE
Patterson-UTI Energy, Inc.
Total debt $1.29B Interest coverage -0.56x This is the baseline the peer rows are being compared against.
Total debt $1.86B Interest coverage 2.15x This peer still has a real interest-payment cushion, while PTEN does not.
Total debt $1.61B Interest coverage 2.24x This peer still has a real interest-payment cushion, while PTEN does not.
Total debt $2.13B Interest coverage 1.22x This peer still has a real interest-payment cushion, while PTEN does not.
Total debt $502.60M Interest coverage 1.83x This peer still has a real interest-payment cushion, while PTEN does not.
What you should know
The case for and against PTEN
2 Rewards
3 Risks
Rewards
-
Free cash flow was positive in 8/10 years.
-
Dividend yield is 3.1% with 23-year payout history.
Risks
-
Net debt grew 20.0% over 3 years.
-
Operating margin compressed from 8.0% to -0.6% over 3 years.
-
Return on equity was -2.8% last year — the company lost money on shareholders' equity.
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)
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Forward P/E
38.63x
P/B
1.58x
P/S
1.05x
EV/EBITDA
6.92x
PEG ratio
0.73x
Profitability
How much profit each dollar creates
Gross margin
23.8%
Operating margin
-0.6%
Net margin
-1.9%
ROE
-2.8%
ROA
-0.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.41x
Current ratio
1.75x
Quick ratio
1.48x
Total debt
$1.29B
Total cash
$201.02M
Growth
How the business has been compounding
Revenue TTM
$4.67B
Revenue 5Y CAGR
37.3%
EPS TTM
-0.24
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$733.27M
Free CF TTM
$372.19M
FCF margin
8.0%
Dividend
Shareholder payout
Yield
3.1%
Payout ratio
213.3%
Last ex-div date
2026-09-01