- Wondering if Helmerich & Payne at around US$36.95 still offers value, or if most of the opportunity is already reflected in the share price.
- The stock has returned 2.8% over the last 7 days, 6.4% over the past month, 23.4% year to date, and 50.0% over the past year, which can change how the market views both its potential and its risks.
- These moves are unfolding against a backdrop of ongoing interest in energy services companies, along with continued attention on how drilling activity and capital spending plans affect the sector. While the share price story is front and center, the wider industry context and sentiment around future demand for energy services are also important for understanding where value may or may not still exist.
- Helmerich & Payne currently holds a valuation score of 5 out of 6 on Simply Wall St. The next step is to look at how different valuation approaches assess the stock today, and then finish with a framework that can help you go one step further in judging whether that value really stacks up.
Find out why Helmerich & Payne's 50.0% return over the last year is lagging behind its peers.
Approach 1: Helmerich & Payne Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and then discounts them back to today’s dollars to estimate what the business could be worth right now.
For Helmerich & Payne, Simply Wall St uses a 2 Stage Free Cash Flow to Equity model based on cash flow projections. The latest twelve month Free Cash Flow is about $22.8 million. Analyst estimates and extrapolated figures point to Free Cash Flow of $348 million in 2030, with intermediate years such as 2026 and 2027 projected at $445.8 million and $479.2 million respectively, all in dollars and then discounted to present value.
Bringing all of these projected cash flows back to today, the model arrives at an estimated intrinsic value of about $65.11 per share. Compared with the recent share price of around $36.95, the DCF output suggests the stock is roughly 43.3% undervalued on this set of assumptions.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Helmerich & Payne is undervalued by 43.3%. Track this in your watchlist or portfolio, or discover 61 more high quality undervalued stocks.
Approach 2: Helmerich & Payne Price vs Sales
For companies where earnings can be uneven, the P/S ratio is often a useful way to think about value because it focuses on how much investors are paying for each dollar of revenue rather than profits that can swing from year to year.
What counts as a “normal” or “fair” multiple is influenced by how quickly investors expect a company to grow and how risky that growth looks. Higher growth and lower perceived risk can support a higher multiple, while slower growth or higher risk usually call for a lower number.
Helmerich & Payne currently trades on a P/S of 0.90x. That sits below both the Energy Services industry average P/S of about 1.42x and a peer group average of 1.96x. Simply Wall St’s Fair Ratio for Helmerich & Payne is 0.96x, which is the P/S level its model suggests based on factors such as the company’s growth profile, profit margins, industry, market value and risk indicators.
This Fair Ratio goes a step further than simple peer or industry comparisons because it adjusts for company specific traits rather than assuming one multiple fits all. With the current 0.90x P/S sitting close to the 0.96x Fair Ratio, the shares look priced at about the level the model would suggest.
Result: ABOUT RIGHT
P/S ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies.
Upgrade Your Decision Making: Choose your Helmerich & Payne Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach your story about Helmerich & Payne to specific numbers by pairing your view on its future revenue, earnings and margins with a forecast and a fair value. You can then compare that fair value with today’s price to help you judge whether the stock looks appealing or expensive. Everything updates automatically as new news or earnings arrive, and different investors on the Community page often land on very different fair values, such as one Narrative around US$43.68 and another closer to US$30.00. This reflects how two people can look at the same company and come to very different but clearly quantified conclusions.
For Helmerich & Payne however, we will make it really easy for you with previews of two leading Helmerich & Payne Narratives:
Fair value in this bullish narrative is about US$43.68 per share.
At the recent share price of about US$36.95, this narrative implies the stock is roughly 15.4% below its own fair value estimate on these assumptions.
Revenue growth in this view is set at about 2.47% a year.
- Focuses on leadership transition, international expansion, and technology driven drilling to support higher earnings and a stronger global position over time.
- Assumes improving profit margins and earnings, with capital discipline and lower spending freeing up room for dividends and buybacks.
- Highlights risks from the energy transition, customer concentration, regulatory pressure, and potential rig and technology challenges that could unsettle this view.
Fair value in this more cautious narrative is about US$30.00 per share.
At the same US$36.95 share price, this view implies the stock is roughly 23.2% above its own fair value estimate on these assumptions.
Revenue growth in this case is set at about a 1.39% decline a year.
- Emphasises the risk that the energy transition, tighter regulation, and ongoing investment needs could keep long term drilling demand and margins under pressure.
- Builds in relatively modest revenue growth assumptions, tighter profitability, and a lower P/E, which all pull the fair value estimate down.
- Flags that execution on global growth, technology, and cost control could still offset some of these headwinds, which is why the narrative frames this as one possible path rather than a certainty.
If you want to go beyond these summaries and see how other investors are framing the same facts into very different stories about future returns, it is worth reading the full narratives side by side to test which set of assumptions feels closer to your own view.
Do you think there's more to the story for Helmerich & Payne? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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