Patterson-UTI Energy (PTEN) Posts Disappointing Q3 Results. Is This a True Picture?
Oil drilling company Patterson-UTI Energy yet again posted disappointing quarterly numbers despite the oil drilling business growing leaps and bounds in North America.
The company provides two of the most essential services for shale drilling - high-specification rigs capable of handling complex shale jobs and pressure pumping services to frack shale wells and make them producing. Despite providing some critical services and being present right at the epicenter of booming shale production, the company’s net loss for Q3 grew by ~600% compared to the previous quarter, whereas the operating loss grew by ~790% during the same period.
One of the main reasons for this quarter may have fallen short is the decision to retire 42 of its older legacy rigs and take a $48.4 million impairment charge. The other major reason may have been the company’s increased capital expenditure in the last few quarters for upgrading the rigs, which resulted in high deprecation costs. These two non-cash expenses dented the bottom-line in a big way.
Despite the losses, the picture isn’t as bad as it looks, and it could be only a couple of tough quarters before it gets back on the growth track again.
Even though the company posted losses in last few quarters, it was still able to pay dividends and buy back shares worth $100 million so far this year – indicating the strong financial health of the company.
PTEN's Indicator enters downward trend
The Aroon Indicator for PTEN entered a downward trend on May 22, 2023. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 248 similar instances where the Aroon Indicator formed such a pattern. In of the 248 cases the stock moved lower. This puts the odds of a downward move at .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on May 31, 2023. You may want to consider selling the stock, shorting the stock, or exploring put options on PTEN as a result. In of 84 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PTEN declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where PTEN's RSI Indicator exited the oversold zone, of 33 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
The Moving Average Convergence Divergence (MACD) for PTEN just turned positive on May 17, 2023. Looking at past instances where PTEN's MACD turned positive, the stock continued to rise in of 38 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where PTEN advanced for three days, in of 296 cases, the price rose further within the following month. The odds of a continued upward trend are .
PTEN may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.278) is normal, around the industry mean (1.094). P/E Ratio (7.962) is within average values for comparable stocks, (38.748). Projected Growth (PEG Ratio) (0.255) is also within normal values, averaging (0.148). Dividend Yield (0.027) settles around the average of (0.045) among similar stocks. P/S Ratio (0.770) is also within normal values, averaging (1.052).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating slightly worse than average price growth. PTEN’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PTEN’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 88, placing this stock worse than average.
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Industry description
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High and low price notable news
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a provider of onshore contract drilling and pressure pumping services
Industry ContractDrilling
PTEN and
Correlation & Price change
A.I.dvisor indicates that over the last year, PTEN has been closely correlated with HP. These tickers have moved in lockstep 90% of the time. This A.I.-generated data suggests there is a high statistical probability that if PTEN jumps, then HP could also see price increases.
| Ticker / NAME | Correlation To PTEN | 1D Price Change % | ||
|---|---|---|---|---|
| PTEN | 100% | +5.44% | ||
| HP - PTEN | 90% Closely correlated | +2.72% | ||
| NBR - PTEN | 88% Closely correlated | +4.61% | ||
| PDS - PTEN | 78% Closely correlated | +3.87% | ||
| RIG - PTEN | 68% Closely correlated | +7.17% | ||
| DO - PTEN | 64% Loosely correlated | +6.39% | ||
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