National Energy Services Reunited Corp. (NESR): what the price assumes
In the published model solve dated 2026-Q2, anchored at $28.15, National Energy Services Reunited Corp. (NESR) is priced for today's economics sustained for ~7.8 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/NESR
Headline
| Field | Value |
|---|---|
| Ticker | NESR |
| Company | National Energy Services Reunited Corp. |
| Current price | $28.15/sh |
| Composition | Production Services 62% / Drilling and Evaluation Services 38% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 4.3% |
| Operating margin today | 8.0% |
| Margin compression (value-band) | -3.7pp |
| Must persist for | 7.8y |
| Multiple paid | 27x operating income |
The operating-margin figure is value-band context at year 11: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 10.7% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.8 years.
Reconcile: at the x-ray's 9.3% required return this reads ~5.3 years; the models below use their own rates.
How unusual the bet is: high
| Reference | Value |
|---|---|
| cohort percentile (of 46 peers) | 89 |
| sustained it ~7.8 years at this level | 21% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 4.93x | 5 | expensive |
| Earnings | 4.07x | 5 | expensive |
| Relative | — | 0 | — |
| Growth | 0.94x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.
Per-Model Detail (n=13)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $29.79 | 0.94x | yes | FCF base $0.1B, growth 9% (input: historical growth), terminal g 4.0%, WACC 8.4%, 5yr projection |
| DCF Exit Multiple | Growth | $31.12 | 0.90x | yes | Exit EV/EBITDA: 7.2x / 12.2x / 17.2x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/E 20.19x (blended: static sector reference 10x + trailing (TTM) 44x), scenarios: 15.1x / 20.2x / 24.2x (bear / base = reference held flat / bull), EV/EBITDA 7.85x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $6.92 | 4.07x | yes | BV/sh $9.87, ROE (TTM) 6.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $5.71 | 4.93x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $24.42 | 1.15x | yes | Rev $1.4B, growth 9% (input: historical growth; tapered), Terminal P/S: 1.5x / 2.0x / 2.4x (bear / base = today's held flat / bull, cap 6x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $3.52 | 8.00x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.06B × (1−23%) / WACC 8.4% → EPV (no growth) |
| Residual Income | Asset | $5.54 | 5.08x | yes | BV $9.87 + 5yr PV of (ROE (TTM) 6.5% − Kₑ 9.3%) × BV; BV grows 4.2%/yr |
| Graham Number | Asset | $11.92 | 2.36x | yes | √(22.5 × EPS $0.64 × BVPS $9.87) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $0.25B × sector EV/EBITDA 6.0x |
| FCF Yield | Earnings | $11.08 | 2.54x | yes | FCF $125.2M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $10.11 | 2.78x | yes | SBC-adj FCF $0.12B (FCF $0.13B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $3.46 | 8.14x | yes | EPS $0.64 × (8.5 + 2×-1.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $2.63 | 10.70x | yes | BV $9.87 × (ROIC 2.3% / WACC 8.4%) |
| P/Sales Sector | Relative | — | — | no | Revenue $1.43B × sector P/S 1.2x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $6.92 | 4.07x | yes | EPS $0.64 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Production Services | operating | enterprise | $816.0m | — | withheld | unresolved no unit value |
| Drilling and Evaluation Services | operating | enterprise | $508.0m | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $196.5m |
| Net debt / NOPAT (after-tax) | 2.25x |
| Net debt / operating income (pre-tax) | 1.73x |
| Share count CAGR (dilution) | 2.3% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
National Energy Services Reunited is a Middle East and North Africa oilfield-services company, split between Production Services at about 62% and Drilling and Evaluation Services at 38%. The balance sheet has improved to the point that management is initiating both a dividend and a buyback: net debt is about $196 million against trailing operating income of $113 million, roughly 1.7x, with interest coverage near 3.7x.
At $24.51 (June 27, 2026) the price pays about 26x company-wide operating income, which implies growth held at the self-funding ceiling for about nine years. That is an elevated bar; the static valuation families call the stock richly valued and only the forward growth method reaches the price.
The most recent quarter was a record, with revenue up about 33% and net income up roughly 130%, driven by activity in Saudi Arabia. The premium multiple rests on that MENA growth continuing, against a backdrop where the business is concentrated in the region and exposed to oil-price and geopolitical swings.
Bull Case
The clearest read on NESR's confidence is what it is now doing with cash. After years as a growth-focused, debt-carrying oilfield-services company, it is initiating a quarterly dividend of $0.10 per share starting in the fourth quarter of 2026 and launching a $50 million share-repurchase program. A company starts returning capital when management believes the cash flow is durable and the balance sheet can support it, and NESR's has improved: net debt of about $196 million is now only around 1.7x trailing operating income, with interest coverage near 3.7x. Beginning a dividend and a buyback at the same time is a deliberate signal that the deleveraging phase is largely behind it and the cash-generation phase is ahead.
The operating momentum behind that confidence is strong. The most recent quarter was a record, with revenue of $404.6 million, up about 33% year over year and well ahead of consensus, operating profit up roughly 72%, and net income up about 129%, with adjusted EBITDA of $76.7 million holding a margin near 19% despite geopolitical disruptions. The growth came from increased hydraulic fracturing and well-testing work in Saudi Arabia, the single most important oilfield-services market in the world, and the company has been adding contracts in Kuwait and North African cementing.
The regional position is the structural advantage. NESR's two segments span the completion, production, drilling, and evaluation stages of a well's life cycle (FY2025 10-K, accession 0001493152-26-009139), and it serves the national oil companies of the MENA region, which run the lowest-cost, most resilient barrels on the planet and keep investing through cycles that idle higher-cost producers elsewhere. A locally embedded service provider to those NOCs has a demand base that is far steadier than a US-focused peer tied to the shale cycle. With a record quarter, a strengthening balance sheet, and the start of capital returns, the bull case is that the price, while elevated, is paying for a genuine growth franchise in the most durable corner of the oil-services market.
Bear Case
The structural truth a NESR holder would rather not face is that this is an elevated multiple on a cyclical, geographically concentrated oilfield-services business, and the price is pricing in growth that has rarely persisted. At about 26x operating income the price assumes growth at the self-funding ceiling for roughly nine years, and history says only about 17% of comparable fast-growers sustained that pace for that long. The asset-based, earnings-power, and peer-multiple methods all call the stock richly valued, and only the single forward growth-DCF reaches the price. When the static frames are this far below the quote, the premium is a bet that the recent MENA boom continues for the better part of a decade.
The concentration is the risk the growth story glosses over. The record quarter was driven by hydraulic fracturing and well testing in Saudi Arabia, which means a large share of the business depends on the activity levels and budgets of a small number of national oil companies in one region. If Saudi Arabia or its neighbors adjust spending, or if OPEC production policy shifts, NESR's revenue is directly exposed in a way a diversified service company is not. Oilfield services is also fiercely competitive, and international markets see direct competition at every location, so winning and keeping NOC contracts is a recurring fight, not a settled moat.
The cyclicality compounds the valuation risk. NESR's 8% trailing operating margin is thinner than the headline EBITDA suggests, and oilfield-services margins are highly sensitive to activity levels and pricing, both of which track the oil price. The balance sheet has improved, but net debt of about $196 million still requires the cash flow to hold up, and management is now committing some of that cash to a dividend and buyback rather than retaining all of it as a buffer. The bear case is that an elevated multiple, single-region concentration, and commodity cyclicality combine into a setup where a downturn in MENA activity or oil prices would hit revenue, margins, and the premium multiple together, with no cheaper valuation frame underneath.
Valuation
At the current price the market is paying about 26x company-wide operating income, which implies operating growth held at its self-funding ceiling for roughly nine years. The solve runs at a cost of capital near 11.5%, reflecting the higher risk of a concentrated emerging-markets oilfield-services name, with growth searched up to a 25% ceiling and each additional point moving the implied horizon by about 1.9 years. Keep the figures approximate; they are a single inversion under fixed assumptions.
The family pattern is a clear durability premium. The asset-based, earnings-power, and peer-multiple methods all read richly valued, and only the forward growth-DCF reaches the price. That means the entire premium rests on the growth assumption holding, and the reverse-DCF range centers well below the current price with an acceptable reliability flag, quantifying how much of the quote depends on the MENA growth continuing rather than on current earnings.
The grounding is thin on the bull side and harsh on the bear side. The historical base rate is among the least favorable in the batch: only about 17% of comparable fast-growers sustained this pace for nine years. The 8% trailing operating margin and the 11.5% cost of capital both reflect the risk the market sees in the business. The valuation is justifiable only if you believe NESR is in the early innings of a multi-year MENA investment cycle that compounds at high rates; on any conservative frame, the price is well ahead of what the current fundamentals support, and the new dividend and buyback, while encouraging, do not change the demanding growth math.
Catalysts
The most recent print, Q1 2026 (reported May 2026), was a record: revenue of $404.6 million, up about 33% year over year and ahead of consensus, operating profit up roughly 72%, net income up about 129%, and adjusted EBITDA of $76.7 million at a margin near 19%. Growth was led by hydraulic fracturing and well testing in Saudi Arabia, and the company highlighted new contract awards in Kuwait and North African cementing.
The headline capital-return actions are the forward catalysts: NESR is initiating a quarterly dividend of $0.10 per share starting in the fourth quarter of 2026 and launching a $50 million share-repurchase program, both signaling confidence in cash generation. New contract awards across the MENA region are the recurring operating catalyst, since each award extends the revenue base.
The dominant external catalysts are the oil price and MENA national-oil-company spending, which drive activity levels and pricing across the region. The watch items are Saudi and broader MENA activity, oil prices, contract wins and renewals, margin trends from the current ~19% EBITDA level, and execution on the dividend and buyback. Continued double-digit revenue growth with stable margins would support the premium; a slowdown in regional activity or an oil-price decline would expose the concentration and cyclicality. Sources: NESR Q1 2026 results and capital-return announcements (stocktitan.net; finance.yahoo.com; gurufocus.com; seekingalpha.com), May 2026.
Peer Cohorts (Per Segment, With Filing Citations)
Production Services (reported)
- LBRT (Liberty Energy Inc.)
- FY2025 10-K: …logistics software, PropConnect™, as a hosted software as a service. Our operations are organized into a single business segment, which consists of completions services, including hydraulic fracturing, wireline, proppant delivery and goods, including our Permian Basin sand mines, and natural gas compression and…
- FY2025 10-K: …natural gas ("CNG") delivery, data analytics, related goods (including our sand mine operations), and technologies to facilitate lower emission completions, thereby helping our customers reduce their emissions profile. We have grown from one active hydraulic fracturing fleet in December 2011 to approximately 40…
- RES (RPC, INC.)
- FY2025 10-K: Other (both segments) $ 109,285 6.8 % $ 111,842 7.9 % $ 141,187 8.7 % Technical Services Segment Pressure Pumping : 29.8% of 2025 total revenues. Services are provided to customers throughout Texas and the mid-continent regions of the United States, with a concentration in the Permian basin. We…
- FY2025 10-K: …flows in an existing formation, or to address well control issues. This operating segment consists primarily of pressure pumping, wireline, downhole tools, coiled tubing and cementing. Customers include major multi-national and independent oil and gas producers and selected nationally owned oil companies. The…
- XPRO (Expro Group Holdings N.V.)
- FY2025 10-K: …specific engineering costs associated with a project. We also procure products and services on behalf of our customers that are provided by third parties for which we are reimbursed with a mark-up or in connection with an integrated services contract. We also design, manufacture and sell equipment, which is typically…
- FY2025 10-K: …the customer simultaneously consumes the benefit of the service while it is being rendered, and, therefore, reflects the amount of consideration to which we have a right to invoice. We generally perform services either under direct service purchase orders or master service agreements which are supplemented by…
- PUMP (ProPetro Holding Corp.)
- FY2025 10-K: …hydraulic fracturing services to our customers. We operate a fleet of mobile hydraulic fracturing, wireline and cementing units and other auxiliary equipment to perform completion services to E&P companies. Additionally, we generate revenue through our PROPWR SM power generation business by providing turnkey power…
- FY2025 10-K: …vans. We also own and operate a fleet of trucks, trailers and other equipment that provide onsite storage and handling of wet sand used in the completion phase of shale wellbores. We provide dedicated equipment, personnel and services that are tailored to meet each of our customers' needs. Each fleet has a designated…
- OII (OCEANEERING INTERNATIONAL INC)
- FY2025 10-K: …and ◦ survey services, including hydrographic survey and positioning services and autonomous underwater vehicles for geoscience. • Manufactured Products -Our Manufactured Products segment provides the following: ◦ distribution and connection systems including production control umbilicals and field development…
- FY2025 10-K: …in which we have a high degree of focus, may be postponed or suspended during periods when exploration and production companies reduce their offshore capital spending. Over the last several years, one of our focus areas has been to increase our service and product offerings toward our energy customers' operating…
- HLX (Helix Energy Solutions Group, Inc.)
- FY2025 10-K: …gas processing, well control response services, and oil and gas production from owned properties. We generate revenue in our Shallow Water Abandonment segment by providing decommissioning and intervention services with P&A and CT systems and personnel; by providing marine access to offshore facilities with liftboats,…
- FY2025 10-K: …liftboats, offshore supply vessels ("OSVs"), dive support vessels ("DSVs"), a heavy lift derrick barge, a crew boat, plug and abandonment (‘P&A") systems and coiled tubing ("CT") systems. Our Production Facilities segment includes the Helix Producer I (the " HP I "), a ship-shaped dynamically positioned floating…
- WTTR (SELECT WATER SOLUTIONS, INC.)
- FY2025 10-K: … o Well Testing and Flowback. Our well testing and flowback services, covering a dynamic range of temperature, pressure, volume and H2S concentrations, aims to add value for our customers by providing well productivity data associated with our services, including fracturing support, fracturing plug drill out,…
- FY2025 10-K: …operations associated with our water distribution pipeline infrastructure, our water recycling facilities, our produced water gathering pipelines, SWDs, and our solids management facilities, primarily serving E&P companies. ● Water Services. The Water Services segment primarily consists of the Company's water-related…
Drilling and Evaluation Services (reported)
- SLB (SLB LIMITED/NV)
- FY2025 10-K: …digital transformations. These services include transition support from on-prem to cloud-based digital solutions, data clean-up and migration, workflow automation - including deployment of workflow solutions built within SLB's global network of Innovation Factori workspaces - and training to further enable customers'…
- FY2025 10-K: …reduce cycle time and improve efficiency of workflows to allow customers to make better, faster decisions to improve their project economics and reservoir performance. • Digital Operations: Combines the strengths of SLB's oilfield services with advanced digital technologies to deliver more reliable, efficient, and…
- BKR (Baker Hughes Co)
- FY2025 10-K: …and technology portfolio to focus on new energy areas, such as geothermal and CCUS; strengthening its digital architecture; and addressing key energy market themes. The OFSE segment is organized into four product lines. • Well Construction focuses on drilling and includes drilling services (directional drilling,…
- FY2025 10-K: 5, the Company expects to recognize revenue of approximately 59 %, 74 %, and 89 % of the total remaining performance obligations within 2 , 5 , and 15 years, respectively, and the remaining thereafter. Contract modifications could affect both the timing to complete as well as the amount to be received as the Company…
- HAL (HALLIBURTON COMPANY)
- FY2025 10-K: 88 475 Other 2,604 1,942 Total segment operating expenses $ 10,542 $ 8,085 Year Ended December 31, 2023 Millions of dollars Completion and Production Drilling and Evaluation Segment operating expenses: Cost of products, materials, and supplies $ 5,906 $ 3,771 Compensation 1,810 1,750 Depreciation, depletion, and…
- FY2025 10-K: , questions arise about the scope of our operations in the shale natural gas and shale oil sectors, and the extent to which these operations may affect human health and the environment. At the direction of our customer, we design and generally implement a hydraulic fracturing operation to stimulate the well ' s…
- NOV (NOV INC.)
- FY2025 10-K: …to assess performance and for resource allocation decisions in the annual budgeting process and in the quarterly performance review processes. Energy Products and Services The Company's Energy Products and Services segment primarily designs, manufactures, rents, and sells products and equipment used in drilling,…
- FY2025 10-K: …of oilfield drilling activity by oil and gas companies, drilling contractors, and oilfield service companies. Demand for the segment's composite solutions serving applications outside of oil and gas are driven by industrial activity, infrastructure spend, and population growth. Energy Equipment The Company's Energy…
- RES (RPC, INC.)
- FY2025 10-K: …flows in an existing formation, or to address well control issues. This operating segment consists primarily of pressure pumping, wireline, downhole tools, coiled tubing and cementing. Customers include major multi-national and independent oil and gas producers and selected nationally owned oil companies. The…
- FY2025 10-K: …effect on our operations; ● fluctuations in drilling rig count and well completions; ● our concentration of customers in the energy industry and periodic downturns; ● our business depends on capital spending by our customers, many of whom rely on outside financing to fund their operations; ● dependence on our key…
- WFRD (Weatherford International plc)
- FY2025 10-K: …develop and produce from their oil and natural gas reservoirs more efficiently. Our products and services are designed to enable our customers to increase production rates while reducing their costs of drilling and production. Reportable Segments We offer our services and technologies in relation to the well life…
- FY2025 10-K: …analyze customer requirements and provide software enabled design input from pre-job planning to installation. Completions offer customers a comprehensive portfolio of completion tools, such as safety valves, production packers, downhole reservoir monitoring, flow control, isolation packers, multistage fracturing…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.