KLX Energy Services Holdings, Inc. (KLXE) | Investment Case

1. Company Snapshot

1.a. Company Description

KLX Energy Services Holdings, Inc.provides drilling, completions, production, and well intervention services and products to the onshore oil and gas producing regions of the United States.The company operates through three segments: Southwest, Rocky Mountains, and Northeast/Mid-Con.

It provides directional drilling services; and downhole navigational and rental tools businesses and support services, including well planning, site supervision, accommodation rentals, and other drilling rentals.The company also offers coiled tubing and nitrogen services; pressure control products and services; wellhead and hydraulic fracturing rental products and services; flowback and testing services; and wireline services.In addition, it offers toe sleeves; wet shoe cementing bypass subs; composite plugs; dissolvable plugs; liner hangers; stage cementing tools, inflatables, float and casing equipment; retrievable completion tools; cementing products and services; thru-tubing technologies and services; rig assist snubbing services; and acidizing and pressure pumping services.

Further, the company provides production services comprising maintenance-related intervention services; production blow out presenters; mechanical wireline services; slick line services; hydro-testing services; premium tubulars; and other specialized production tools.It also provides intervention services consisting of technicians and equipment that are focused on providing customers engineered solutions to downhole complications.The company offers a range of technical services, and related tools and equipment to companies engaged in the exploration and development of North American onshore conventional and unconventional oil and natural gas reserves.

KLX Energy Services Holdings, Inc.was incorporated in 2018 and is headquartered in Houston, Texas.

Show Full description

1.b. Last Insights on KLXE

KLX Energy Services Holdings' recent stock performance was negatively driven by the decline in earnings estimate revisions. Although the company's shares surged 7.4% in the last session, the trend in earnings estimate revisions may not translate into further price increase in the near term. The company's credit agreement refinancing, which added approximately $357 million in debt, may also weigh on its financial performance. Additionally, the absence of recent earnings release or any significant new product or acquisition announcements may have contributed to the negative sentiment surrounding the company.

1.c. Company Highlights

Last Price	2.66
Change Percentage	-8.28%
Open	2.94
Previous Close	2.9
Market Cap ( Millions)	47
Volume	504607
Year High	5.29
Year Low	1.46
M A 50	2.18
M A 200	1.96

FCF Yield	-71.66%
Dividend Yield	0.00%
ROE	210.86%
Debt / Equity	-514.05%
Net Debt / EBIDTA	485.42%
Price To Book	-0.83
Price Earnings Ratio	-0.67
Price To FCF	-1.4
Price To sales	0.07
EV / EBITDA	5.61

2. KLX Energy Services' Q3 Results Exceed Expectations

KLX Energy Services reported revenue of $167 million, up 5% from Q2, and adjusted EBITDA of $21 million, up 14% from Q2. The company's EPS was -$0.73, slightly below estimates of -$0.72. The revenue growth was driven by the Northeast Mid-Con segment, which saw a 29% revenue increase and a 101% adjusted EBITDA increase. The company's adjusted EBITDA margin improved to 12.6%, demonstrating its ability to maintain profitability despite a challenging market environment.

Publication Date: Nov -29

                                    📋 Highlights
                                    Q3 Revenue & EBITDA Growth::
                                                Revenue reached $167M (+5% QoQ), adjusted EBITDA hit $21M (+14% QoQ).
NE Mid-Con Performance::
                                                Revenue surged 29% YoY, adjusted EBITDA jumped 101%, margins hit 24.2% (3-year high).
Rig Productivity::
                                                $318K revenue/rig (+20% YoY), $40K EBITDA/rig (+227% YoY) in Q3.
Q4 Outlook::
                                                Mid-single-digit revenue decline expected, better than last year’s 13% drop, with stable margins due to cost controls.

                                

Segment Performance

The Northeast Mid-Con segment was a standout in Q3, driven by higher utilization across its completions portfolio, reduced white space in the calendar, and targeted expense management. The segment's adjusted EBITDA margin improved to 24.2%, the highest in three years. This strong performance was a key contributor to the company's overall revenue and adjusted EBITDA growth.

Outlook and Guidance

KLX Energy Services expects a mid-single-digit revenue decline from Q3 to Q4, which is materially below the 13% quarter-over-quarter decline seen last year. The company expects margins to hold up despite declining revenue due to cost controls and typical Q4 accrual unwinds. The company's focus on operational discipline, margin optimization, and proactive capital stewardship positions it well to navigate the remainder of 2025 successfully.

Valuation and Metrics

The company's valuation metrics indicate a mixed picture. The P/S Ratio is 0.05, indicating a relatively low revenue multiple. However, the EV/EBITDA ratio is 5.28, suggesting that the company's enterprise value is relatively high compared to its EBITDA. The ROE is 212.02%, driven by the company's significant net income, while the ROIC is -12.51%, indicating that the company's invested capital is not generating returns. Analysts estimate next year's revenue growth at -0.5%, indicating a relatively flat outlook.

Balance Sheet and Liquidity

The company has $65 million in available liquidity and expects to generate strong cash flow in Q4 due to working capital trends and minimal net CapEx spend. The company's net debt to EBITDA ratio is 4.81, indicating a relatively high level of debt. However, the company's liquidity is expected to improve as it navigates the remainder of the year, and it will continue to reiterate its guidance. As Keefer Lehner, Executive Vice President and Chief Financial Officer, noted, the company will continue to evaluate its PIK option to manage its balance sheet, providing flexibility in a challenging market environment.

3. NewsRoom

Is KLX Energy (KLXE) Stock Outpacing Its Oils-Energy Peers This Year?

Feb -10

Source:

Head-To-Head Comparison: KLX Energy Services (NASDAQ:KLXE) and Drilling Tools International (NASDAQ:DTI)

Jan -30

Source: defenseworld.net

KLX Energy Services (NASDAQ:KLXE) Stock Price Down 5.5% – Here’s What Happened

Jan -15

Source: defenseworld.net

KLX Energy: Strong Upside As US Onshore Rig Activity Stabilize Led By Natural Gas Improvements

Jan -06

Source: seekingalpha.com

3 Energy Stocks Down 35% From Their Highs to Buy in 2026

Dec -31

Source:

KLX Energy Services Appoints Geoffrey C. Stanford as Interim Chief Financial Officer

Dec -10

Source: prnewswire.com

Presenting on Emerging Growth Conference 88 Day 1 on December 10; Register to live stream

Dec -09

Source: globenewswire.com

KLX Energy Services Announces Upcoming Participation in the Emerging Growth Conference

Dec -08

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.58%)

6. Segments

Northeast/ Mid-Con

Expected Growth: 4.83%

Northeast/Mid-Con segment of KLX Energy Services Holdings, Inc. is driven by increasing demand for oil and gas production, improved operational efficiencies, and strategic acquisitions. The region's prolific shale plays, such as the Marcellus and Utica, support high levels of drilling activity, while KLX's expanded service offerings and cost savings initiatives contribute to the 4.83% growth rate.

Southwest

Expected Growth: 4.83%

Southwest growth driven by increasing demand for oilfield services, particularly in the Permian Basin, where KLX Energy Services Holdings, Inc. operates. Rising rig counts, improved well completion efficiencies, and growing production volumes contribute to the 4.83% growth. Additionally, the company's diversified service offerings, including wireline and completion services, position it for continued growth in the region.

Rocky Mountains

Expected Growth: 7.3%

Rocky Mountains from KLX Energy Services Holdings, Inc. growth of 7.3% driven by increasing demand for oil and gas services, expansion of drilling activities, and strategic acquisitions. Additionally, the region's vast shale reserves and favorable regulatory environment contribute to the segment's growth.

7. Detailed Products

Well Intervention Services

KLX Energy Services provides well intervention services to help operators improve well productivity and extend the life of their wells.

Coiled Tubing Services

KLX Energy Services offers coiled tubing services to help operators access and treat wells in a safe and efficient manner.

Cementing Services

KLX Energy Services provides cementing services to help operators achieve zonal isolation and ensure the integrity of their wells.

Fishing and Rental Services

KLX Energy Services offers fishing and rental services to help operators recover from well control events and optimize their operations.

Drilling and Completion Fluids

KLX Energy Services provides drilling and completion fluids to help operators optimize their drilling and completion operations.

Downhole Tools and Services

KLX Energy Services offers downhole tools and services to help operators optimize their drilling and completion operations.

8. KLX Energy Services Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for KLX Energy Services Holdings, Inc. is moderate due to the availability of alternative energy sources and services.

Bargaining Power Of Customers

The bargaining power of customers is low for KLX Energy Services Holdings, Inc. due to the company's strong market position and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for KLX Energy Services Holdings, Inc. due to the company's dependence on a few key suppliers and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants is high for KLX Energy Services Holdings, Inc. due to the relatively low barriers to entry and the attractiveness of the energy services market.

Intensity Of Rivalry

The intensity of rivalry is high for KLX Energy Services Holdings, Inc. due to the competitive nature of the energy services market and the presence of several established players.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	88.98%
Debt Cost	11.55%
Equity Weight	11.02%
Equity Cost	14.75%
WACC	11.90%
Leverage	807.22%

11. Quality Control: KLX Energy Services Holdings, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Forum Energy Technologies

A-Score: 4.9/10

Value: 9.1

Growth: 3.1

Quality: 4.1

Yield: 0.0

Momentum: 10.0

Volatility: 3.0

1-Year Total Return ->

Dril-Quip

A-Score: 4.8/10

Value: 6.6

Growth: 6.3

Quality: 7.2

Yield: 0.0

Momentum: 6.0

Volatility: 2.3

1-Year Total Return ->

Flotek

A-Score: 4.7/10

Value: 5.1

Growth: 5.0

Quality: 7.1

Yield: 0.0

Momentum: 9.5

Volatility: 1.7

1-Year Total Return ->

Oil States International

A-Score: 4.4/10

Value: 7.6

Growth: 3.9

Quality: 4.8

Yield: 0.0

Momentum: 7.0

Volatility: 3.3

1-Year Total Return ->

KLX Energy Services Holdings

A-Score: 3.1/10

Value: 9.8

Growth: 4.2

Quality: 3.5

Yield: 0.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

ProFrac

A-Score: 2.5/10

Value: 7.4

Growth: 4.3

Quality: 1.3

Yield: 0.0

Momentum: 1.0

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

25.58%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

11.90%

KLX Energy Services Holdings, Inc. - US48253L2051

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on KLXE

1.c. Company Highlights

Lower Quality

More Volatile

Lower Yield

Earnings Miss

Revenues Miss

Weak Momentum

Earnings Beats

Revenues Beats

Cheaper

2. KLX Energy Services' Q3 Results Exceed Expectations

Segment Performance

Outlook and Guidance

Valuation and Metrics

Balance Sheet and Liquidity

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.58%)

6. Segments

Northeast/ Mid-Con

Expected Growth: 4.83%

Southwest

Expected Growth: 4.83%

Rocky Mountains

Expected Growth: 7.3%

7. Detailed Products

Well Intervention Services

Coiled Tubing Services

Cementing Services

Fishing and Rental Services

Drilling and Completion Fluids

Downhole Tools and Services

8. KLX Energy Services Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: KLX Energy Services Holdings, Inc. passed 2 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

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.66$

Current Price

2.66$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA