Superior Drilling Products, Inc. (SDPI) | Investment Case

1. Company Snapshot

1.a. Company Description

Superior Drilling Products, Inc., a drilling and completion tool technology company, innovates, designs, engineers, manufactures, sells, rents, and repairs drilling and completion tools in the United States, Canada, the Middle East, and Eastern Europe.Its drilling solutions include Drill-N-Ream, a dual-section wellbore conditioning tool; Strider, a drill string oscillation system technology; and V-Stream, an advanced conditioning system.The company also engages in the manufacture and refurbishment of polycrystalline diamond compact drill bits for an oil field services company.

It serves oil and natural gas drilling industry.The company was formerly known as SD Company, Inc.and changed its name to Superior Drilling Products, Inc.

in May 2014.Superior Drilling Products, Inc.was founded in 1993 and is headquartered in Vernal, Utah.

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1.b. Last Insights on SDPI

Superior Drilling Products' recent performance was negatively driven by the announcement of its acquisition by Drilling Tools International Corp. for $32.2 million, sparking investor concerns and lawsuits. The company's stock price may have been impacted by the uncertainty surrounding the deal, as well as the lack of transparency in the acquisition process. Additionally, the company's financial performance may have been affected by the distraction and disruption caused by the acquisition announcement, leading to a decline in investor confidence.

1.c. Company Highlights

Last Price	1.01
Change Percentage	1.50%
Open	1.01
Previous Close	1.0
Market Cap ( Millions)	31
Volume	112682
Year High	1.38
Year Low	0.58
M A 50	1.23
M A 200	0.96

FCF Yield	-1.78%
Dividend Yield	0.00%
ROE	60.11%
Debt / Equity	40.00%
Net Debt / EBIDTA	107.99%
Price To Book	1.8
Price Earnings Ratio	4.03
Price To FCF	-56.07
Price To sales	1.46
EV / EBITDA	9.38

2. Transcript Summary

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3. NewsRoom

FIRST NATIONAL CORPORATION INVESTOR ALERT BY THE FORMER ATTORNEY GENERAL OF LOUISIANA: Kahn Swick & Foti, LLC Investigates Merger of First National Corporation - FXNC

Jul -17

Source: prnewswire.com

Star Equity Fund Issues Statement on Successful Campaign at Superior Drilling Products

Jul -08

Source: globenewswire.com

URGENT: The M&A Class Action Firm Investigates Merger and Looming Vote on July 15, 2024, of HashiCorp, Inc. - HCP

Jul -03

Source: globenewswire.com

URGENT: The M&A Class Action Firm Investigates Merger and Looming Vote on July 15, 2024, of HashiCorp, Inc. - HCP

Jul -02

Source: prnewswire.com

Superior Drilling Products Reports First Quarter 2024 Results

May -14

Source: businesswire.com

SUPERIOR DRILLING INVESTOR ALERT by the Former Attorney General of Louisiana: Kahn Swick & Foti, LLC Investigates Adequacy of Price and Process in Proposed Sale of Superior Drilling Products, Inc. - SDPI

May -13

Source: businesswire.com

Superior Drilling Products Reports Fourth Quarter and Full Year 2023 Results

Mar -07

Source: businesswire.com

SDPI Stock Alert: Halper Sadeh LLC Is Investigating Whether the Sale of Superior Drilling Products, Inc. Is Fair to Shareholders

Mar -07

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.35%)

6. Segments

Contract Services

Expected Growth: 12%

Superior Drilling Products, Inc.'s 12% growth in Contract Services is driven by increasing demand for drilling and completion services, expansion into new markets, and strategic partnerships. Additionally, the company's focus on technology advancements, operational efficiency, and cost savings have contributed to its growth. Furthermore, the rising oil prices and increasing drilling activities have also boosted the demand for contract services.

Other

Expected Growth: 10%

Superior Drilling Products, Inc.'s 10% growth is driven by increasing demand for drilling and completion services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on innovative products and services, such as its Drill-N-Line and Strider systems, has improved operational efficiency and reduced costs for its customers, leading to increased adoption and revenue growth.

Tool and Product

Expected Growth: 18%

Superior Drilling Products' Tool and Product segment growth of 18% is driven by increasing demand for drilling and completion services, expansion into new markets, and strategic partnerships. The company's proprietary Drill-N-Line and Strider tools, which improve drilling efficiency and reduce costs, are also key contributors to growth.

Tool Rental

Expected Growth: 13%

Superior Drilling Products' tool rental growth is driven by increasing demand for oil and gas exploration, rising adoption of horizontal drilling, and growing need for efficient drilling operations. Additionally, the company's expanding fleet of rental tools, strategic partnerships, and cost-effective solutions contribute to its 13% growth.

7. Detailed Products

Strider

A drill string oscillator system that reduces the risk of stuck pipe and improves drilling efficiency.

DrillNite

A high-performance, water-based drilling fluid system designed for use in horizontal drilling operations.

JetTronite

A high-pressure, high-temperature (HPHT) drilling system designed for use in deep, hot wells.

V-Door

A casing and cementing system designed to improve wellbore integrity and reduce the risk of wellbore instability.

P-Blade

A high-performance, fixed-cutter drill bit designed for use in a variety of drilling applications.

8. Superior Drilling Products, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Superior Drilling Products, Inc. is medium due to the availability of alternative drilling technologies and services.

Bargaining Power Of Customers

The bargaining power of customers for Superior Drilling Products, Inc. is low due to the company's strong relationships with its customers and its ability to provide customized drilling solutions.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Superior Drilling Products, Inc. is medium due to the availability of multiple suppliers for drilling equipment and services.

Threat Of New Entrants

The threat of new entrants for Superior Drilling Products, Inc. is low due to the high barriers to entry in the drilling industry, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry for Superior Drilling Products, Inc. is high due to the competitive nature of the drilling industry, with multiple 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	12.52%
Debt Cost	3.95%
Equity Weight	87.48%
Equity Cost	3.79%
WACC	3.81%
Leverage	14.31%

11. Quality Control: Superior Drilling Products, Inc. passed 3 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

NCS Multistage Holdings

A-Score: 5.3/10

Value: 7.9

Growth: 4.8

Quality: 6.9

Yield: 0.0

Momentum: 10.0

Volatility: 2.3

1-Year Total Return ->

Dawson Geophysical

A-Score: 4.5/10

Value: 7.2

Growth: 4.6

Quality: 3.2

Yield: 4.0

Momentum: 8.0

Volatility: 0.0

1-Year Total Return ->

Smart Sand

A-Score: 4.5/10

Value: 5.3

Growth: 4.4

Quality: 3.1

Yield: 6.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

Superior Drilling Products

A-Score: 4.3/10

Value: 7.2

Growth: 5.4

Quality: 7.2

Yield: 0.0

Momentum: 5.0

Volatility: 1.0

1-Year Total Return ->

Newpark Resources

A-Score: 3.8/10

Value: 5.5

Growth: 1.7

Quality: 5.4

Yield: 0.0

Momentum: 5.0

Volatility: 5.3

1-Year Total Return ->

DMC Global

A-Score: 3.4/10

Value: 9.1

Growth: 3.8

Quality: 3.1

Yield: 0.0

Momentum: 1.5

Volatility: 2.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

24.78%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

3.81%

Superior Drilling Products, Inc. - US8681531070

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SDPI

1.c. Company Highlights

More Volatile

Weak Momentum

Lower Yield

Earnings Miss

Revenues Miss

Strong Momentum

Medium Volatility

Average Quality

Stable Momentum

Fairly Valued

Better Quality

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.35%)

6. Segments

Contract Services

Expected Growth: 12%

Other

Expected Growth: 10%

Tool and Product

Expected Growth: 18%

Tool Rental

Expected Growth: 13%

7. Detailed Products

Strider

DrillNite

JetTronite

V-Door

P-Blade

8. Superior Drilling Products, 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: Superior Drilling Products, Inc. passed 3 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

1.01$

Current Price

1.01$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA