CLB

We rate Core Laboratories Inc. /DE/ (CLB) as a Reduce with a composite score of 46.4/100 at a current price of $17.57. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in quality (60th percentile) and momentum (49th percentile), which together account for the majority of the composite score. Offsetting weakness in value (25th percentile) and investment (29th percentile) tempers our overall conviction. We assign a Narrow Moat rating (42/100), High uncertainty, and Standard capital allocation.

Key items to watch: valuation compression risk if growth disappoints. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Core Laboratories Inc. /DE/ holds a top-quartile position (#0 of 50) within the Mining sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 46.4/100 places it at rank #2584 in our full 7,333-stock universe. At N/A in market capitalization, Core Laboratories Inc. /DE/ is a small-cap player in the Mining space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 3%, though momentum at the 49th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 21% (-22.6pp vs sector) narrow to operating margins of 11% (-0.8pp vs sector) and net margins of 7.0%, yielding a gross-to-net conversion rate of 34%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $17.57, Core Laboratories Inc. /DE/ is trading at a premium to fundamental value. Our value factor score of 25/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 23.0x (a 68% premium to the sector median of 13.7x), EV/EBITDA of 14.8x (at a premium), P/B of 3.2x, P/S of 1.6x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a High uncertainty rating to Core Laboratories Inc. /DE/. Key risk factors include elevated market sensitivity (beta of 1.57), below-average price stability (40th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.57); below-average price stability (40th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 40th percentile and quality factor at the 60th percentile provide a quantitative summary of the overall risk landscape.

We identify limited risk mitigants at this time, which contributes to our high uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.

We rate Core Laboratories Inc. /DE/'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 13.7%, and the balance sheet is managed within acceptable parameters (D/E: 42%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Core Laboratories Inc. /DE/ falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, Core Laboratories Inc. /DE/ receives a Reduce rating with a composite score of 46.4/100 (rank #2584 of 7,333). Our quantitative framework assigns a Narrow Moat (42/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 41/100.

Our analysis does not support a constructive view on Core Laboratories Inc. /DE/ at this time. The combination of the current quantitative profile, high uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.