RPC, INC. (RES): what the price assumes

In the published model solve dated 2026-Q2, anchored at $5.77, RPC, INC. (RES) is priced for +17.9% growth. 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 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/RES

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 5: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 11.8% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.1pp.

Reconcile: at the x-ray's 9.3% required return this reads ~3.4%/yr; the models below use their own rates.

How unusual the bet is: within-range

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

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.

Families that justify the price: Relative, 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 8.3%); the inversion above states its own rate.

Per-Model Detail (n=16)

Solvency

Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 4.8%); the trailing year was depressed.

Bullet Takeaways

RPC is a deeply cyclical oilfield-services company trading at $6.57 near a trough in the frac cycle. Operating margin sits around 2 percent, far below mid-cycle, so the methods that capitalize current earnings look harsh while the price reflects an eventual recovery.

The balance sheet is the cushion. RPC carries roughly $180 million of net cash with only about $21 million of gross debt, which for an oilfield-services name is unusual financial strength and lets it ride out the down cycle and fund acquisitions without leverage.

The strategy is to diversify away from commodity pressure pumping. The Pintail wireline acquisition and other moves have cut pressure pumping to about 28 percent of pro forma revenue, shifting the mix toward less capital-intensive services. The bet is a steadier business by the time the cycle turns.

Bull Case

Read RPC for what it is: a deep cyclical caught near the bottom of its cycle, which is exactly when the trailing numbers look worst and the setup looks best. The current operating margin near 2 percent is not the normal earning power of this business; it is the trough. Oilfield services earns thin or negative margins when frac activity and pricing are depressed, then earns multiples of that when rig counts and completion activity recover. The earnings-power-value model, which normalizes toward sustainable EBIT, lands near $6.42, essentially on top of the $6.57 price, and that is the lens that matters for a cyclical: it says RPC is fairly valued on normalized earnings, not on the depressed trailing figure.

The balance sheet is what lets RPC survive the trough and pounce on the recovery. The company holds roughly $180 million in net cash against only about $21 million of gross debt, an almost unheard-of position for an oilfield-services company, where most peers carry meaningful leverage and get squeezed in downturns. That cash funded the $245 million Pintail Completions wireline acquisition, which closed in April 2025 and brought roughly $409 million of 2024 revenue, without taking on debt. A net-cash cyclical can buy assets cheaply when competitors are forced to retrench, which is precisely how value gets created across an OFS cycle.

The operating story is already inflecting. First-quarter 2026 revenue rose 7 percent sequentially to about $455 million, and the company returned to a net profit of $0.9 million from a loss the prior quarter, with Cudd pressure-pumping revenue up 20 percent sequentially. Management is deliberately rebalancing the portfolio away from commodity pressure pumping, now about 28 percent of pro forma revenue, toward less capital-intensive services. RPC pays a steady quarterly dividend and has a base of customers diversified enough that no single one exceeded 10 percent of revenue (FY2025 10-K, accession 0001104659-26-021480). The bull case is a financially fortified cyclical, buying scale at the bottom, positioned to earn well above 2 percent margins when the cycle turns.

Bear Case

The variable with the most leverage over RPC is the price of oil, and the current stock price does not fully reflect how punishing the down cycle can be. Oilfield-services demand is a direct derivative of exploration-and-production spending, which is itself a derivative of oil and gas prices. When operators cut budgets, completion activity falls, and RPC's revenue and margin fall with it. The company's own filings describe a general oversupply of OFS capacity, particularly in pressure pumping, which has created a high level of price competition (FY2025 10-K, accession 0001104659-26-021480). That is the structural problem: too many frac fleets chasing too little work, which caps pricing power even when activity recovers. A weak-oil environment would push the 2 percent margin toward zero or negative, and the price has not discounted that scenario.

The second concern is that the recovery the price assumes is not in RPC's control and keeps getting deferred. The adjusted EBITDA margin actually contracted 110 basis points sequentially in the first quarter to 11.8 percent, despite the revenue uptick, as materials, supplies, and fuel costs rose. Cost pressure squeezing margin even as revenue grows is the worst combination for a cyclical, because it means the operating leverage works against you. The price embeds a long duration of margin recovery, roughly nine years on the model, and oilfield-services cycles are notoriously hard to time. If E&P spending stays disciplined, as many large operators now prefer, RPC could spend years stuck at trough-to-mid margins.

Third, the static valuation methods are flashing genuine caution, not just cyclical distortion. The asset-based methods land near $0.40 to $1.06, the relative methods near $4.24 to $5.84, and the blended X-ray central estimate sits near $2.30, well below the $6.57 price (June 28, 2026). Only the growth-DCF and the normalized earnings-power lens reach the price. The Pintail acquisition added wireline revenue but also integration risk and exposure to large Permian operator activity, concentrating the business in a single basin's spending cycle. Analysts carry a Hold consensus with a price target around $7, which is the market saying the stock is roughly fairly valued for the trough, with limited upside until the cycle decisively turns. For a cyclical, paying a fair-to-full price at the bottom only works if the recovery arrives on schedule, and that is the one thing RPC cannot promise.

Valuation

RPC has to be valued through a cyclical lens, because its trailing 2 percent operating margin is a trough figure, not normal earning power. At $6.57 the price is justified by the relative-multiple and growth-DCF families, while the asset-based and earnings-power methods that capitalize current results say expensive. The single most relevant method for a cyclical is earnings-power value, which normalizes the earnings base, and it lands near $6.42, essentially on top of the price. That is the model's way of saying RPC is fairly valued on mid-cycle earnings.

The spread across the other methods is wide and reflects the cyclicality. The asset-based methods collapse toward zero (simple excess return near $1.06, residual income near $0.43) because depressed returns on a capital-heavy base produce almost no excess return at the trough. The relative methods land near $4.24 to $5.84. The growth lenses reach the price: the DCF perpetual-growth near $8.24 and the discounted-future-market-cap near $9.05, both assuming a recovery. The blended X-ray central estimate sits near $2.30, dragged down by the trough-distorted asset methods.

The honest framing is that RPC's valuation is a bet on the OFS cycle and the strength of its balance sheet. The net-cash position (about $180 million) is real downside protection that the asset-distorted methods do not credit, and the normalized earnings-power value near $6.42 says the price is reasonable if mid-cycle margins return. The risk is duration: the price assumes a multi-year margin recovery, and if oversupply and disciplined E&P spending keep margins at the trough, the static methods near $2 to $5 set the floor.

Catalysts

First-quarter 2026 results, reported in late April, showed a modest cyclical uptick. Revenue rose 7 percent sequentially to about $455 million, and the company returned to a net profit of $0.9 million from a $3.1 million loss the prior quarter. Cudd pressure-pumping revenue rose 20 percent sequentially on job mix and direct operator supply of materials, with pressure pumping at 31 percent of total revenue. Adjusted EBITDA margin, however, contracted 110 basis points to 11.8 percent on higher materials, supplies, and fuel costs.

The strategic catalyst is diversification. RPC closed its $245 million purchase of Pintail Completions' wireline business in April 2025, which brought roughly $409 million of 2024 revenue, and the company is deliberately rebalancing away from commodity pressure pumping, now about 28 percent of pro forma revenue, toward less capital-intensive services. The board declared a regular quarterly dividend of $0.04 per share, for a yield near 2.8 percent.

Near-term catalysts to watch: the direction of oil and gas prices and the resulting E&P completion spending, which drives the whole business, the integration and revenue trajectory of the Pintail wireline operations tied to large Permian operator activity, whether pricing firms as OFS oversupply works off, and any change to the capital-return cadence given the net-cash balance sheet. Analyst sentiment is a Hold consensus with a price target around $7, reflecting a stock seen as roughly fairly valued near the cyclical trough.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• LBRT (Liberty Energy Inc.)
• FY2025 10-K: …of activity in the industry. Any prolonged and substantial reduction in oil and natural gas prices would likely affect oil and natural gas production levels and therefore affect demand for our services. A material decline in oil and natural gas prices or U.S. activity levels could have a material adverse effect on…
• FY2025 10-K: …domestic and global oil and natural gas inventories; • the supply of and demand for completions services and equipment in the United States and Canada; • federal, tribal, state and local laws, regulations and taxes, including the policies of governments regarding hydraulic fracturing, oil and natural gas exploration,…
• PUMP (ProPetro Holding Corp.)
• FY2025 10-K: …operate are highly competitive. To be successful, an energy service company must provide services and equipment that meet the specific needs of oil and natural gas E&P companies at competitive prices. Competitive factors impacting sales of our services are price, reputation, technical expertise, emissions profile,…
• FY2025 10-K: …are not able to procure additional work from XTO, we will be required to redeploy the equipment associated with the affected fleets with other customers, exposing us to the risks described below associated with a delay or inability to redeploy our equipment. Finally, there have been many recent mergers and…
• NESR (NATIONAL ENERGY SERVICES REUNITED CORP.)
• FY2025 10-K: …which could adversely affect our business, financial condition, results of operations, cash flows and prospects. With respect to national oil company ("NOC") customers, we are also subject to risk of policy, regime, currency and budgetary changes, all of which may affect our customers' capital expenditures. Our…
• FY2025 10-K: …financial condition. ● Our assets require capital for maintenance, upgrades and refurbishment and we may require significant capital expenditures for new equipment. ● The geographic concentration of our operations and customers exposes us to the risks of the regional economy and other regional adverse conditions. ●…
• XPRO (Expro Group Holdings N.V.)
• FY2025 10-K: …to their approved annual budgets and higher or lower activity in the first quarter of the year based on whether the new year's budget has been approved. Customers We derive our revenue from services and product sales to customers primarily in the oil and gas industry. No single customer accounted for more than 10% of…
• 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…
• OII (OCEANEERING INTERNATIONAL INC)
• FY2025 10-K: …and energy markets. We believe the reduction in capacity by some of our competitors over the last few years, coupled with an increase in demand, should help with balancing a historically over-supplied market. Within our mobility solutions business, there are many niche competitors offering specialized services and…
• FY2025 10-K: …quality standards enable us to compete effectively in our selected asset integrity and inspection services market segments. Aerospace and Defense Technologies. Engineering services is a very broad market with a large number of competitors. We compete in specialized areas in which we can combine our extensive…
• HLX (Helix Energy Solutions Group, Inc.)
• FY2025 10-K: …well control purposes. Our Production Facilities segment also includes acquired mature deepwater offshore wells and related subsea infrastructure. 7 Table of Contents GEOGRAPHIC AREAS We primarily operate in the Gulf of America (deepwater and shelf), Brazil, North Sea, West Africa and Asia Pacific regions. Our North…
• FY2025 10-K: …types of services. All material intercompany transactions between the segments have been eliminated. See Note 1 for more information on our business segments. Our chief operating decision maker ("CODM") is the chief operating officer. The CODM uses segment operating income or loss as the measure of segment profit or…
• WTTR (SELECT WATER SOLUTIONS, INC.)
• FY2025 10-K: …Further, Accommodations and Rental's margins declined due to customer and activity mix. This was partially offset by improved gross margins in our Fluids Hauling business line, favorably impacted by the divestment of lower margin operations in connection with the Omni transaction. Chemical Technologies . Costs of…
• FY2025 10-K: …by a $17.4 million increase in our Chemical Technologies segment and a $16.0 million increase in gross profit from our Water Infrastructure segment. Gross margin as a percentage of revenue was 14.4% and 15.1% during the years ended December 31, 2025 and December 31, 2024, respectively. Selling, General and…

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.
• 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.