Helmerich & Payne, Inc. (HP) Stock Analysis
Helmerich & Payne, Inc. (HP) Stock Analysis
Overall Grade: F (Concerning)
View interactive company profile →
Helmerich & Payne, Inc. faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | -10.2% | Below expectations |
| FCF Margin | 4.4% | Cash flow pressure |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is Helmerich & Payne, Inc.'s Profitability and ROIC?
Helmerich & Payne, Inc.'s return on invested capital of -10.2% is below the typical cost of capital. Gross margin of 97.9% with operating margin at -3.6% reflects the company's strong market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -10.2% | Red flag | Below cost of capital |
| Gross Margin | 97.9% | Excellent | Strong pricing power |
| Operating Margin | -3.6% | Warning | Moderate operational efficiency |
How Strong is Helmerich & Payne, Inc.'s Cash Flow Quality?
Helmerich & Payne, Inc. generated $179.6M in free cash flow over the trailing twelve months, representing a 4.4% margin. FCF was positive in N/A of the last 8 quarters, indicating variable cash generation.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | 4.4% | Warning | Thin cash margins |
| Free Cash Flow (TTM) | $179.6M | Good | Positive cash generation |
| OCF/Net Income | -1.8x | Warning | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is Helmerich & Payne, Inc.'s Financial Health?
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Net Cash Position | $-1.7B | Warning | Net debt position |
Is Helmerich & Payne, Inc. Stock Overvalued or Undervalued?
Helmerich & Payne, Inc. trades at a P/E of -9.0x, representing a premium to the sector median of N/A. Free cash flow yield of 6.3% offers attractive cash returns.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | -9.0x | Red flag | Reasonable valuation |
| EV/Sales | 1.0x | Excellent | Attractive revenue multiple |
| FCF Yield | 6.3% | Good | Attractive cash return |
| Dividend Yield | 2.6% | Adequate | Growth focus over income |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -10.2% | Bottom 10% | -1.4x below |
| Free Cash Flow Margin | 4.4% | Bottom 50% | 0.6x below |
| Gross Margin | 97.9% | Top 25% | 2.3x above |
| Operating Margin | -3.6% | Bottom 10% | -0.3x below |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: -10.2% (Red flag)
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: 4.4% (Warning - Bottom 50% of sector (median: 7.7%))
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 97.9% (Excellent - Top 25% of sector (median: 42.4%))
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: 6.3% (Good)
Frequently Asked Questions
Q: What is Helmerich & Payne, Inc.'s Return on Invested Capital (ROIC)?
Helmerich & Payne, Inc. (HP) has a trailing twelve-month Return on Invested Capital (ROIC) of -10.2%. This compares below the sector median of 7.2%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is Helmerich & Payne, Inc.'s Free Cash Flow Margin?
Helmerich & Payne, Inc. (HP) has a free cash flow margin of 4.4%, generating $179.6 million in free cash flow over the trailing twelve months. A thin FCF margin may indicate heavy reinvestment or operational challenges.
Q: Is Helmerich & Payne, Inc. stock overvalued or undervalued?
Helmerich & Payne, Inc. (HP) trades at a P/E ratio of -9.0x, which is above the sector median of N/A. The EV/Sales multiple is 1.0x. Free cash flow yield is 6.3%, which represents an attractive cash return to investors.
Q: Does Helmerich & Payne, Inc. pay a dividend?
Helmerich & Payne, Inc. (HP) currently pays a dividend yield of 2.6%. Including share buybacks, the total shareholder yield is 2.6%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: What is Helmerich & Payne, Inc.'s revenue and earnings growth?
Helmerich & Payne, Inc. (HP) grew revenue by 48.2% year-over-year. Double-digit revenue growth indicates strong demand and market share gains.
Q: How does Helmerich & Payne, Inc. compare to competitors in Energy?
Compared to other companies in Energy, Helmerich & Payne, Inc. (HP) shows: ROIC of -10.2% is below the sector median of 7.2% (-1.4x median). FCF margin of 4.4% trails the sector median of 7.7% (Bottom 39% of sector). Gross margin at 97.9% is 55.5 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Energy companies with available SEC filings.
Q: What warning signs should I watch for with Helmerich & Payne, Inc.?
Investors in Helmerich & Payne, Inc. (HP) should monitor these potential warning signs: 1) FCF margin is thin at 4.4%, leaving limited buffer for economic downturns. 2) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-K filed 2025-11-21. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.