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1. Company Snapshot

1.a. Company Description

Nabors Industries Ltd.provides drilling and drilling-related services for land-based and offshore oil and natural gas wells.The company operates through five segments: U.S. Drilling, Canada Drilling, International Drilling, Drilling Solutions, and Rig Technologies.


It provides tubular running, wellbore placement, directional drilling, measurement-while-drilling (MWD), equipment manufacturing, and rig instrumentation services; and logging-while-drilling systems and services, as well as drilling optimization software.The company also offers REVit, an automated real time stick-slip mitigation system; ROCKit, a directional steering control system; SmartNAV, a collaborative guidance and advisory platform; SmartSLIDE, an advanced directional steering control system; and RigCLOUD, which provides the tools and infrastructure to integrate applications to deliver real-time insight into operations across the rig fleet.In addition, it manufactures and sells top drives, catwalks, wrenches, drawworks, and other drilling related equipment, such as robotic systems and downhole tools; and provides aftermarket sales and services for the installed base of its equipment.


As of December 31, 2021, the company marketed approximately 301 rigs for land-based drilling operations in the United States, Canada, and in 20 other countries worldwide; and 29 rigs for offshore platform drilling operations in the United States and internationally.Nabors Industries Ltd.was founded in 1952 and is based in Hamilton, Bermuda.

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1.b. Last Insights on NBR

The recent 3-month performance of Nabors Industries Ltd. was negatively impacted by a wider-than-expected Q4 loss of $6.67 per share, surpassing the Zacks Consensus Estimate of a loss of $1.86. This compares to a loss of $3.84 per share in the same period last year. Additionally, the company's Q4 revenue matched estimates, but its capital expenditures are expected to range from $195-$205 million, with $80-$85 million earmarked for new builds in Saudi Arabia in the first quarter of 2025.

1.c. Company Highlights

2. Nabors Industries' Q4 2025 Earnings: A Strong Finish to a Transformative Year

Nabors Industries reported a robust Q4 2025, with adjusted EBITDA of $222 million, surpassing expectations. The company's revenue for the quarter was not explicitly stated, but full-year 2025 revenue reached $3.2 billion, reflecting an 8.7% year-over-year growth, primarily driven by the acquisition of Parker and strong international expansion. The actual EPS for Q4 came out at $0.17, significantly beating estimates at -$2.93. Full-year adjusted EBITDA was $913 million, $31 million higher than the prior year.

Publication Date: Feb -14

📋 Highlights
  • Net Debt Reduction:: Nabors reduced net debt by $554 million and annualized cash interest expenses by $45 million in 2025.
  • Q4 EBITDA Outperforms:: Adjusted EBITDA of $222 million exceeded expectations, driven by a 48 average rig count and improved daily margins.
  • Revenue Growth:: Full-year 2025 revenue reached $3.2 billion, up 8.7% YoY, fueled by the Parker acquisition and international expansion.
  • Record Low Net Debt:: Net debt fell to its lowest level since 2005, with plans to reduce it by at least $100 million in 2026.
  • 2026 EBITDA Guidance:: EBITDA growth of 6-8% projected for 2026, led by International and Nabors Drilling Solutions segments.

Operational Highlights

The company's operational performance was strong, with a 50% increase in gas rig count in the Lower 48 and a significant expansion in its international operations, particularly in Saudi Arabia through its joint venture, SANAD. The company finished Q4 with 62 rigs and has since added more, bringing the current rig count to 66. Internationally, Nabors is poised for activity growth, with nearly 20 opportunities for additional rigs in countries where it currently operates.

Guidance and Outlook

Nabors provided guidance for Q1 and full-year 2026, expecting U.S. Drilling average rig count to be 64-65 rigs, with daily adjusted gross margin of approximately $13,200. For the full year, the company expects EBITDA performance to match last year's, with increases in several operations offsetting the disposition of Quail Tools. It also aims to reduce gross debt by at least $100 million in 2026.

Valuation and Financial Health

With a P/E Ratio of 3.66 and an EV/EBITDA of 0.47, Nabors' valuation suggests a relatively low expectation for future growth. However, the company's commitment to deleveraging, as evidenced by its net debt reduction of $554 million in 2025, is a positive sign. The Net Debt / EBITDA ratio stands at -0.62, indicating a strong financial position. Analysts estimate next year's revenue growth at 4.6%, which may not be fully reflected in the current valuation.

Future Prospects

The integration of Parker is progressing as expected, with realized synergies at an annualized run rate of $63 million. Nabors is also optimistic about its new CAN rig wrenches, which have shown improved performance due to automation and sensors. With a strong client base and visibility on its growth, Nabors is poised for a positive trajectory, driven by its international expansion and operational efficiencies.

3. NewsRoom

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Nabors' Q4 Earnings & Revenues Beat Estimates, Increase Y/Y

Feb -13

Source: zacks.com

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Nabors Industries Ltd. (NBR) Q4 2025 Earnings Call Transcript

Feb -12

Source: seekingalpha.com

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Nabors (NBR) Q4 Earnings: How Key Metrics Compare to Wall Street Estimates

Feb -12

Source: zacks.com

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Nabors Industries (NBR) Tops Q4 Earnings and Revenue Estimates

Feb -12

Source: zacks.com

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Nabors Announces Fourth Quarter and Full-Year 2025 Results

Feb -11

Source: prnewswire.com

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Are These 4 Energy Stocks Set to Beat Q4 Earnings Estimates?

Feb -10

Source:

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Venezuela Opportunity Emerges as Oil Services Stocks Rally Through January

Jan -22

Source: 247wallst.com

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Nabors Announces Redemption of 7.500% Senior Guaranteed Notes Due 2028 and Fourth Quarter 2025 Reduction in Net Debt of Approximately $366 Million, Equivalent to $25 per Share

Jan -15

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.43%)

6. Segments

International Drilling

Expected Growth: 4.5%

Nabors Industries Ltd.'s International Drilling segment growth of 4.5% is driven by increasing demand for oil and gas, expansion into new markets, and improved operational efficiency. Additionally, strategic partnerships, investments in technology, and a strong backlog of contracts contribute to the segment's growth.

United States Drilling

Expected Growth: 4.2%

The 4.2% growth in United States Drilling from Nabors Industries Ltd. is driven by increasing oil prices, rising demand for energy, and improved drilling efficiencies. Additionally, the ongoing shale revolution and investments in infrastructure development have contributed to the growth. Furthermore, Nabors' strategic acquisitions and cost-saving initiatives have enhanced its competitiveness, supporting the segment's expansion.

Drilling Solutions

Expected Growth: 4.8%

Nabors Industries' Drilling Solutions segment growth of 4.8% is driven by increasing demand for oil and gas, improved drilling efficiency, and expansion into new markets. Additionally, the company's investments in digitalization and automation, such as its RigSphere platform, have enhanced operational performance and reduced costs, contributing to the segment's growth.

Rig Technologies

Expected Growth: 4.9%

Rig Technologies from Nabors Industries Ltd. growth of 4.9% driven by increasing demand for drilling services, rising oil prices, and growing adoption of digital technologies in oil and gas operations, leading to higher revenue from equipment sales and services.

Other Reconciling Items

Expected Growth: 4.1%

Nabors Industries Ltd.'s 4.1% growth in Other Reconciling Items is driven by increased drilling activity, improved operational efficiency, and favorable foreign exchange rates. Additionally, the company's cost-saving initiatives and strategic investments in digital technologies have contributed to this growth.

7. Detailed Products

Drilling Rigs

Nabors Industries Ltd. offers a range of drilling rigs, including land-based and offshore rigs, designed for efficient and safe drilling operations.

Directional Drilling Services

Nabors provides directional drilling services, including measurement-while-drilling (MWD) and logging-while-drilling (LWD) services, to optimize wellbore placement and improve drilling efficiency.

Well Intervention Services

Nabors offers well intervention services, including coiled tubing, wireline, and hydraulic workover services, to optimize well performance and extend well life.

Drilling Technologies

Nabors develops and provides advanced drilling technologies, including automated drilling systems and drilling optimization software, to improve drilling efficiency and reduce costs.

Rig Equipment and Components

Nabors designs, manufactures, and supplies rig equipment and components, including drilling motors, pumps, and other equipment, to support drilling operations.

Project Management and Consulting Services

Nabors provides project management and consulting services to support drilling operations, including well planning, drilling engineering, and operations management.

8. Nabors Industries Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Nabors Industries Ltd. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the availability of alternative drilling technologies.

Bargaining Power Of Customers

Nabors Industries Ltd. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand reputation and high-quality services reduce the likelihood of customers switching to competitors.

Bargaining Power Of Suppliers

Nabors Industries Ltd. relies on a few key suppliers for critical components, which gives them some bargaining power. However, the company's large scale of operations and long-term contracts mitigate this risk.

Threat Of New Entrants

The drilling and oilfield services industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants and allows Nabors Industries Ltd. to maintain its market position.

Intensity Of Rivalry

The drilling and oilfield services industry is highly competitive, with several large players competing for market share. Nabors Industries Ltd. faces intense competition from companies like Schlumberger, Halliburton, and Baker Hughes.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 90.60%
Debt Cost 15.24%
Equity Weight 9.40%
Equity Cost 15.77%
WACC 15.29%
Leverage 963.39%

11. Quality Control: Nabors Industries Ltd. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
PHX Energy

A-Score: 7.1/10

Value: 8.6

Growth: 7.2

Quality: 5.8

Yield: 10.0

Momentum: 3.5

Volatility: 7.3

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Precision Drilling

A-Score: 5.1/10

Value: 8.3

Growth: 6.4

Quality: 5.5

Yield: 0.0

Momentum: 5.0

Volatility: 5.7

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Borr Drilling

A-Score: 4.5/10

Value: 8.1

Growth: 8.2

Quality: 4.7

Yield: 0.0

Momentum: 4.0

Volatility: 2.0

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Ensign Energy Services

A-Score: 4.4/10

Value: 9.8

Growth: 4.8

Quality: 3.0

Yield: 0.0

Momentum: 4.5

Volatility: 4.3

1-Year Total Return ->

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Independence Contract Drilling

A-Score: 3.8/10

Value: 10.0

Growth: 3.8

Quality: 2.2

Yield: 0.0

Momentum: 6.0

Volatility: 1.0

1-Year Total Return ->

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Nabors

A-Score: 3.8/10

Value: 9.8

Growth: 3.8

Quality: 5.2

Yield: 0.0

Momentum: 2.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

78.19$

Current Price

78.19$

Potential

-0.00%

Expected Cash-Flows