RPC, Inc. (RES, Financial) reported impressive first-quarter revenue results, reaching $332.88 million and surpassing the market consensus of $326.71 million. The company attributes this promising start to their outstanding performance across various service lines.
A significant highlight for RPC this quarter was the acquisition of Pintail Completions. This strategic move enhances RPC's portfolio by incorporating Pintail's robust operations in the Permian Basin, which boasts a prestigious customer base and a highly esteemed management team.
RPC's leadership, under CEO Ben M. Palmer, anticipates that the integration of Pintail will enable the company to deliver top-tier well completion services, further strengthening their position in the diversified oilfield services market.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for RPC Inc (RES, Financial) is $6.45 with a high estimate of $8.00 and a low estimate of $4.75. The average target implies an upside of 30.83% from the current price of $4.93. More detailed estimate data can be found on the RPC Inc (RES) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, RPC Inc's (RES, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for RPC Inc (RES, Financial) in one year is $6.85, suggesting a upside of 38.95% from the current price of $4.93. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the RPC Inc (RES) Summary page.
RES Key Business Developments
Release Date: January 30, 2025
- Revenue: Decreased 1% to $335 million in Q4 2024.
- Technical Services Revenue: Represented 94% of total revenues, essentially unchanged.
- Support Services Revenue: Decreased 14%, representing 6% of total Q4 revenues.
- Cost of Revenues: Increased by $2.7 million to $250.2 million.
- SG&A Expenses: Increased to $41.2 million from $37.7 million.
- Effective Tax Rate: 9.1% for the fourth quarter.
- Diluted EPS: $0.06, down from $0.09 in the previous quarter.
- EBITDA: $46.1 million, down from $55.2 million; EBITDA margins decreased to 13.7%.
- Operating Cash Flow: $94.2 million for the quarter.
- Free Cash Flow: $53.7 million after CapEx of $40.5 million for the quarter.
- Year-End Cash: $326 million with no debt.
- Dividends Paid: $8.6 million in Q4, totaling over $34 million for 2024.
- Stock Repurchase: Nearly $10 million repurchased during the year.
- Capital Expenditures: $220 million in 2024, projected $150-$200 million for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- RPC Inc (RES, Financial) is well-positioned to capture market share in the North American land frac plug market, which could serve as a growth catalyst independent of broader oilfield services demand.
- The company maintained a strong balance sheet with $326 million in cash and no debt at year-end, providing financial flexibility for future growth opportunities.
- RPC Inc (RES) generated significant free cash flow of $53.7 million in the fourth quarter and $129.5 million for the full year, supporting steady capital returns to investors.
- The company paid $8.6 million in dividends during the quarter, totaling over $34 million for 2024, and repurchased nearly $10 million of stock, demonstrating a commitment to returning capital to shareholders.
- RPC Inc (RES) is focused on strategic imperatives such as improving margins, optimizing assets, and increasing operational scale through mergers and acquisitions, which could drive long-term growth and profitability.
Negative Points
- Fourth-quarter revenues decreased by 1% to $335 million, primarily due to lower non-pressure pumping activity, which offset growth in pressure pumping.
- Cost of revenues increased by $2.7 million due to higher insurance and employee costs, impacting overall profitability.
- SG&A expenses rose to $41.2 million from $37.7 million, reflecting higher fixed costs and year-end incentive amounts.
- Diluted EPS decreased to $0.06 from $0.09 in the third quarter, indicating a decline in profitability.
- EBITDA margins decreased by 270 basis points sequentially to 13.7%, reflecting margin compression in the technical services segment.
