Patterson-UTI Energy, Inc. (PTEN) | Investment Case

1. Company Snapshot

1.a. Company Description

Patterson-UTI Energy, Inc., through its subsidiaries, provides onshore contract drilling services to oil and natural gas operators in the United States and internationally.It operates through three segments: Contract Drilling Services, Pressure Pumping Services, and Directional Drilling Services.The Contract Drilling Services segment markets its contract drilling services primarily in west Texas, Appalachia, Rockies, Oklahoma, South Texas, East Texas, and Colombia.

As of December 31, 2021, this segment had a drilling fleet of 192 marketable land-based drilling rigs.The Pressure Pumping Services segment offers pressure pumping services that consist of well stimulation for the completion of new wells and remedial work on existing wells, as well as hydraulic fracturing, cementing, and acid pumping services in Texas and the Appalachian region.The Directional Drilling Services segment provides a suite of directional drilling services, including directional drilling and measurement-while-drilling services; supply and rental of downhole performance motors; and software and services that enhances the accuracy of directional and horizontal wellbores, wellbore quality, and on-bottom rate of penetration.

It also services equipment to drilling contractors, as well as provides electrical controls and automation to the energy, marine, and mining industries in North America and other markets; and owns and invests in oil and natural gas assets as a non-operating working interest owner located principally in Texas and New Mexico.Patterson-UTI Energy, Inc.was founded in 1978 and is headquartered in Houston, Texas.

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1.b. Last Insights on PTEN

Breaking News: Patterson-UTI Energy Inc reported a recent development in its shareholder base. Fisher Asset Management LLC decreased its holdings in the company by 11.2% during the quarter, selling 592527 shares. The firm now owns 4709615 shares. There is no recent earnings release to comment on. Analysts at various firms have given recommendations on the stock. Some have given a hold rating. No recent buy or sell recommendations have been made by analysts. Further updates on the company's performance and shareholder activity are anticipated.

1.c. Company Highlights

Last Price	6.32
Change Percentage	-2.47%
Open	6.47
Previous Close	6.48
Market Cap ( Millions)	2440
Volume	4978650
Year High	9.57
Year Low	5.1
M A 50	5.9
M A 200	6.18

FCF Yield	11.83%
Dividend Yield	5.06%
ROE	-4.03%
Debt / Equity	37.50%
Net Debt / EBIDTA	113.96%
Price To Book	0.75
Price Earnings Ratio	-17.87
Price To FCF	8.45
Price To sales	0.5
EV / EBITDA	3.83

2. Patterson-UTI's Q3 2025 Earnings: A Resilient Performance Amidst Industry Challenges

Patterson-UTI reported total revenue of $1.176 billion for Q3 2025, alongside a net loss of $36 million or $0.10 per share, and an adjusted net loss of $21 million. The company's adjusted EBITDA was $219 million. The drilling services segment generated revenue of $380 million with an adjusted gross profit of $134 million, while the completion services segment reported revenue of $705 million and an adjusted gross profit of $111 million. The actual EPS of -$0.10 was better than the estimated -$0.06 is not correct it was actually worse than the -$0.06 estimate that was not found, instead the estimate was -$0.1. The company's financial performance was characterized by a strong adjusted free cash flow of $146 million during the first three quarters, with $64 million returned to shareholders in Q3, including a dividend and share repurchases.

Publication Date: Oct -26

                                    📋 Highlights
                                    Revenue and Adjusted EBITDA::
                                                Q3 2025 revenue reached $1.176B with adjusted EBITDA of $219M despite a net loss of $36M ($0.10/share) and adjusted net loss of $21M.
Segment Performance::
                                                Drilling services generated $380M revenue and $134M adjusted gross profit (avg. 95 rigs), while completion services reported $705M revenue and $111M adjusted gross profit with flat pump hour activity.
Free Cash Flow and Shareholder Returns::
                                                Generated $146M in adjusted free cash flow YTD 2025, returning $64M to shareholders (Q3: $0.08/share dividend + $34M share repurchases).
Capital Allocation and Debt Position::
                                                Net debt/EBITDA ratio <1x ($187M cash, $500M undrawn revolver) with plans to reduce 2026 CapEx and prioritize high-demand equipment investments.
Technology and Future Outlook::
                                                Deployed 100% natural gas direct drive Emerald systems (250k HP capacity), targeting 25-30% lower capital costs, and expects Q4 to deliver strongest free cash flow of 2025.

                                

Segment Performance and Industry Outlook

The drilling services segment operated with an average of 95 rigs, while the completion services segment saw flat activity on a pump hour basis compared to Q2. CEO William Hendricks noted satisfaction with the team's execution, particularly in high-end work such as large simul fracs and trimul fracs, where pricing trends have held up relatively well. The company is optimistic about its completion services business, driven by the deployment of its EOS platform and Vertex automation for frac operations.

Capital Allocation and Shareholder Returns

Patterson-UTI remains committed to returning at least 50% of its annual free cash flow to shareholders. The company declared a $0.38 per share dividend for Q4 2025 and has been actively repurchasing shares. With a net debt to EBITDA ratio of just over 1x and $187 million in cash, the company is well-positioned to continue investing in technology and returning value to shareholders.

Valuation and Growth Prospects

With a P/S Ratio of 0.53 and an EV/EBITDA of 3.95, the market appears to have tempered expectations for Patterson-UTI's growth. Analysts estimate a revenue decline of -4.1% for the next year. The company's focus on maximizing free cash flow, investing in high-demand technologies, and maintaining a strong balance sheet positions it for long-term value creation. The Dividend Yield stands at 4.83%, providing a relatively attractive return for income investors.

Operational Highlights and Future Plans

The company is making significant strides in technology, including the deployment of its 100% natural gas direct drive Emerald systems, which are expected to reduce costs and improve capital efficiency. Patterson-UTI is also exploring opportunities in power generation, particularly in microgrids for drilling. While cautious about new investments, the company is committed to its core competencies and is open to accretive M&A opportunities.

3. NewsRoom

Edgestream Partners L.P. Buys New Stake in Patterson-UTI Energy, Inc. $PTEN

Dec -06

Source: defenseworld.net

3 Oil & Gas Drillers That Look Resilient Despite Pressure

Dec -05

Source: zacks.com

Patterson-UTI Energy, Inc. $PTEN Shares Sold by Fisher Asset Management LLC

Dec -03

Source: defenseworld.net

American Century Companies Inc. Boosts Stock Position in Patterson-UTI Energy, Inc. $PTEN

Nov -26

Source: defenseworld.net

Patterson-UTI Energy: An Overlooked And Undervalued Oil Trade

Nov -26

Source: seekingalpha.com

Patterson-UTI Reports Drilling Activity for October 2025

Nov -05

Source: accessnewswire.com

Ethic Inc. Lowers Position in Patterson-UTI Energy, Inc. $PTEN

Nov -01

Source: defenseworld.net

Patterson-UTI Energy, Inc. $PTEN Shares Sold by Mutual of America Capital Management LLC

Oct -30

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.95%)

6. Segments

Completion Services

Expected Growth: 9%

Patterson-UTI Energy's Completion Services segment growth is driven by increasing demand for hydraulic fracturing and pressure pumping services, supported by rising oil prices, growing shale production, and improving operational efficiency. Additionally, the company's strategic acquisitions and investments in technology, such as its proprietary FLEX25 frac pump, have enhanced its service offerings and competitiveness.

Drilling Services

Expected Growth: 11%

Patterson-UTI Energy's 11% growth in Drilling Services is driven by increasing demand for oil and gas, improved operational efficiency, and strategic investments in premium drilling technologies. Additionally, the company's expanded fleet of high-spec rigs and growing presence in key basins such as the Permian and Eagle Ford contribute to its growth momentum.

Drilling Products

Expected Growth: 8%

Patterson-UTI Energy's Drilling Products segment growth is driven by increasing demand for oil and gas, rising drilling activity, and growing adoption of advanced drilling technologies. Additionally, the company's strategic acquisitions, expanded product offerings, and strong relationships with major oil and gas operators contribute to its 8% growth.

Other

Expected Growth: 12%

Patterson-UTI Energy's 12% growth is driven by increasing demand for oilfield services, expansion into new markets, and strategic acquisitions. The company's diversified portfolio of services, including drilling, pressure pumping, and directional drilling, positions it for growth in a recovering oil and gas market. Additionally, its focus on technology and operational efficiency enables it to capitalize on rising drilling activity and increasing well complexity.

7. Detailed Products

Contract Drilling

Patterson-UTI Energy, Inc. provides contract drilling services to oil and natural gas operators, offering a fleet of drilling rigs and experienced personnel to support drilling operations.

Pressure Pumping

The company offers pressure pumping services, including hydraulic fracturing and cementing, to enhance oil and gas production.

Directional Drilling

Patterson-UTI provides directional drilling services, enabling operators to access hard-to-reach reservoirs and improve drilling efficiency.

Well Servicing

The company offers well servicing, including maintenance, repair, and workover services, to keep wells operating efficiently.

Equipment Manufacturing

Patterson-UTI designs and manufactures drilling and completion equipment, including rigs, pumps, and other specialized equipment.

8. Patterson-UTI Energy, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Patterson-UTI Energy, Inc. is medium due to the availability of alternative energy sources such as solar and wind power. However, the high cost of switching to these alternatives and the lack of infrastructure to support widespread adoption mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers for Patterson-UTI Energy, Inc. is low due to the company's diversified customer base and the lack of concentration in the industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Patterson-UTI Energy, Inc. is medium due to the company's dependence on a few key suppliers for drilling equipment and services. However, the company's large scale of operations and diversified supply chain mitigate this threat.

Threat Of New Entrants

The threat of new entrants for Patterson-UTI Energy, Inc. is low due to the high barriers to entry in the oil and gas industry, including the need for significant capital investment and regulatory approvals.

Intensity Of Rivalry

The intensity of rivalry for Patterson-UTI Energy, Inc. is high due to the competitive nature of the oil and gas industry, with many established players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	21.20%
Debt Cost	4.91%
Equity Weight	78.80%
Equity Cost	15.12%
WACC	12.95%
Leverage	26.90%

11. Quality Control: Patterson-UTI Energy, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Debt

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

Magnolia Oil & Gas

A-Score: 5.8/10

Value: 6.0

Growth: 6.6

Quality: 7.1

Yield: 5.0

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

Helmerich & Payne

A-Score: 4.7/10

Value: 6.8

Growth: 5.7

Quality: 3.1

Yield: 8.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

Patterson-UTI Energy

A-Score: 4.7/10

Value: 8.9

Growth: 4.2

Quality: 3.6

Yield: 7.0

Momentum: 1.0

Volatility: 3.3

1-Year Total Return ->

PBF Energy

A-Score: 4.4/10

Value: 9.6

Growth: 1.8

Quality: 4.2

Yield: 5.0

Momentum: 3.5

Volatility: 2.3

1-Year Total Return ->

Liberty Energy

A-Score: 4.3/10

Value: 7.5

Growth: 7.9

Quality: 4.6

Yield: 3.0

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

Equitrans Midstream

A-Score: 3.8/10

Value: 2.2

Growth: 3.0

Quality: 5.0

Yield: 5.0

Momentum: 5.0

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.21%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

12.95%

Patterson-UTI Energy, Inc. - US7034811015

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PTEN

1.c. Company Highlights

Average Quality

Medium Volatility

Average Growth

Earnings Beats

Earnings Miss

Fairly Valued

Revenues Miss

Weak Momentum

Stable Momentum

Revenues Beats

Lower Quality

Average Yield

Cheaper

2. Patterson-UTI's Q3 2025 Earnings: A Resilient Performance Amidst Industry Challenges

Segment Performance and Industry Outlook

Capital Allocation and Shareholder Returns

Valuation and Growth Prospects

Operational Highlights and Future Plans

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.95%)

6. Segments

Completion Services

Expected Growth: 9%

Drilling Services

Expected Growth: 11%

Drilling Products

Expected Growth: 8%

Other

Expected Growth: 12%

7. Detailed Products

Contract Drilling

Pressure Pumping

Directional Drilling

Well Servicing

Equipment Manufacturing

8. Patterson-UTI Energy, 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: Patterson-UTI Energy, 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

6.32$

Current Price

6.32$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA