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Relative valuation derived from Energy sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
34.0%
Sector: 6.7%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, NABORS INDUSTRIES LTD (NBR) receives a "Buy" rating with a composite score of 53.1/100, ranked #37 out of 4446 stocks. Key factor scores: Quality 50/100, Value 80/100, Momentum 72/100. This is quantitative analysis only — not investment advice.
NABORS INDUSTRIES LTD (NBR) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does NABORS INDUSTRIES LTD Do?
Nabors Industries Ltd. provides drilling and drilling-related services for land-based and offshore oil and natural gas wells. The company operates through five segments: U.S. Drilling, Canada Drilling, International Drilling, Drilling Solutions, and Rig Technologies. It provides tubular running, wellbore placement, directional drilling, measurement-while-drilling (MWD), equipment manufacturing, and rig instrumentation services; and logging-while-drilling systems and services, as well as drilling optimization software. The company also offers REVit, an automated real time stick-slip mitigation system; ROCKit, a directional steering control system; SmartNAV, a collaborative guidance and advisory platform; SmartSLIDE, an advanced directional steering control system; and RigCLOUD, which provides the tools and infrastructure to integrate applications to deliver real-time insight into operations across the rig fleet. In addition, it manufactures and sells top drives, catwalks, wrenches, drawworks, and other drilling related equipment, such as robotic systems and downhole tools; and provides aftermarket sales and services for the installed base of its equipment. As of December 31, 2021, the company marketed approximately 301 rigs for land-based drilling operations in the United States, Canada, and in 20 other countries worldwide; and 29 rigs for offshore platform drilling operations in the United States and internationally. Nabors Industries Ltd. was founded in 1952 and is based in Hamilton, Bermuda. NABORS INDUSTRIES LTD (NBR) is classified as a small-cap stock in the Energy sector, specifically within the Petroleum And Natural Gas industry. The company is led by CEO Anthony G. Petrello and employs approximately 12,000 people. With a market capitalization of $1.2B, NBR is one of the notable companies in the Energy sector.
As of April 2026, NABORS INDUSTRIES LTD receives a Buy rating with a composite score of 53.1/100 and 4 out of 5 stars from the Blank Capital Research quantitative model.NBR ranks #37 out of 4,446 stocks in our coverage universe. Within the Energy sector, NABORS INDUSTRIES LTD ranks #6 of 128 stocks, placing it in the top 10% of its Energy peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
NBR Stock Price and 52-Week Range
NABORS INDUSTRIES LTD (NBR) currently trades at $80.22. The stock lost $2.70 (3.3%) in the most recent trading session. The 52-week high for NBR is $83.01, which means the stock is currently trading -3.4% from its annual peak. The 52-week low is $23.27, putting the stock 244.7% above its annual trough. Recent trading volume was 197K shares, suggesting relatively thin trading activity.
Is NBR Overvalued or Undervalued? — Valuation Analysis
NABORS INDUSTRIES LTD (NBR) carries a value factor score of 80/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 3.79x, compared to the Energy sector average of 19.63x — a discount of 81%. The price-to-book ratio stands at 1.29x, versus the sector average of 1.64x. The price-to-sales ratio is 0.39x, compared to 0.47x for the average Energy stock. On an enterprise value basis, NBR trades at 3.14x EV/EBITDA, versus 3.50x for the sector.
Based on these multiples, NABORS INDUSTRIES LTD appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
NABORS INDUSTRIES LTD Profitability — ROE, Margins, and Quality Score
NABORS INDUSTRIES LTD (NBR) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 34.0%, compared to the Energy sector average of 6.7%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 6.8% versus the sector average of 3.7%.
On a margin basis, NABORS INDUSTRIES LTD reports gross margins of 55.1%, compared to 52.7% for the sector. The operating margin is 7.1% (sector: 10.7%). Net profit margin stands at 10.0%, versus 6.4% for the average Energy stock. Revenue growth is running at 10.1% on a trailing basis, compared to -1.2% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
NBR Debt, Balance Sheet, and Financial Health
NABORS INDUSTRIES LTD has a debt-to-equity ratio of 351.0%, compared to the Energy sector average of 55.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.56x, suggesting adequate working capital coverage. Total debt on the balance sheet is $2.35B. Cash and equivalents stand at $428M.
NBR has a beta of 2.05, meaning it is more volatile than the broader market — a $10,000 investment in NBR would be expected to move 104.7% more than the S&P 500 on any given day. The stability factor score for NABORS INDUSTRIES LTD is 31/100, suggesting elevated price swings that may be unsuitable for conservative portfolios.
NABORS INDUSTRIES LTD Revenue and Earnings History — Quarterly Trend
In TTM 2026, NABORS INDUSTRIES LTD reported revenue of $3.13B and earnings per share (EPS) of $18.75. Net income for the quarter was $324M. Gross margin was 55.1%. Operating income came in at $230M.
In FY 2025, NABORS INDUSTRIES LTD reported revenue of $3.18B and earnings per share (EPS) of $18.75. Net income for the quarter was $374M. Gross margin was 39.9%. Revenue grew 8.7% year-over-year compared to FY 2024. Operating income came in at $471M.
In Q3 2025, NABORS INDUSTRIES LTD reported revenue of $818M and earnings per share (EPS) of $18.25. Net income for the quarter was $302M. Gross margin was 39.9%. Revenue grew 10.1% year-over-year compared to Q3 2024. Operating income came in at $128M.
In Q2 2025, NABORS INDUSTRIES LTD reported revenue of $833M and earnings per share (EPS) of $-2.71. Net income for the quarter was $-2M. Gross margin was 41.3%. Revenue grew 12.1% year-over-year compared to Q2 2024. Operating income came in at $73M.
Over the past 8 quarters, NABORS INDUSTRIES LTD has demonstrated a growth trajectory, with revenue expanding from $743M to $3.13B. Investors analyzing NBR stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
NBR Dividend Yield and Income Analysis
NABORS INDUSTRIES LTD (NBR) does not currently pay a dividend. This is common among smaller companies in the Petroleum And Natural Gas industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Energy dividend stocks may want to explore other Energy stocks or use the stock screener to filter by dividend yield.
NBR Momentum and Technical Analysis Profile
NABORS INDUSTRIES LTD (NBR) has a momentum factor score of 72/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 29/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 21/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
NBR vs Competitors — Energy Sector Ranking and Peer Comparison
Comparing NBR against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full NBR vs S&P 500 (SPY) comparison to assess how NABORS INDUSTRIES LTD stacks up against the broader market across all factor dimensions.
NBR Next Earnings Date
No upcoming earnings date has been announced for NABORS INDUSTRIES LTD (NBR) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy NBR? — Investment Thesis Summary
The bull case for NABORS INDUSTRIES LTD rests on several quantitative strengths. The value score of 80/100 suggests attractive pricing relative to fundamentals. Price momentum is positive at 72/100, suggesting the trend favors buyers. High volatility (stability score 31/100) increases portfolio risk.
In summary, NABORS INDUSTRIES LTD (NBR) earns a Buy rating with a composite score of 53.1/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on NBR stock.
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Institutional Research Dossier
NABORS INDUSTRIES LTD (NBR) Deep Dive Analysis
Published on March 24, 2026
Action RatingBuy
Sections
Executive Summary
We initiate coverage on Nabors Industries (NBR) with a Buy rating. This rating is predicated on the company's compelling valuation, strong recent profitability, and improving operational efficiency within a recovering energy sector. While acknowledging the inherent cyclicality and leverage concerns, we believe NBR's current market price undervalues its potential for continued free cash flow generation and debt reduction, making it an attractive investment opportunity for those with a higher risk tolerance.
The most critical takeaway is NBR's significant discount to its peers on key valuation metrics like P/E and EV/EBITDA, coupled with a superior ROE. This suggests the market is overly pessimistic about NBR's ability to sustain its recent performance and manage its debt load. Successful execution on debt reduction and continued operational improvements could lead to substantial upside for the stock.
Business Strategy & Overview
Nabors Industries operates primarily as a drilling contractor, providing land-based and offshore drilling services to oil and gas exploration and production companies. The company's revenue is derived from day rates charged for its drilling rigs and related services, including wellbore placement, directional drilling, and measurement-while-drilling (MWD). Nabors differentiates itself through its technology offerings, such as automated drilling systems and rig instrumentation, which aim to improve drilling efficiency and reduce costs for its customers. These technologies, including REVit, ROCKit, and SmartNAV, are designed to enhance drilling performance and provide real-time insights into operations.
Nabors' strategic positioning involves focusing on higher-specification rigs capable of handling complex drilling operations, particularly in unconventional resource plays. This strategy allows the company to command premium day rates and maintain higher utilization rates compared to competitors with older, less capable rigs. The company also emphasizes its Drilling Solutions segment, which provides a range of services and technologies that complement its drilling operations, creating a more integrated and value-added offering for its customers. This segment is crucial for diversifying revenue streams and improving overall profitability.
The company's industry context is heavily influenced by oil and gas prices, drilling activity, and technological advancements. Increased drilling activity, driven by higher commodity prices, typically leads to higher demand for Nabors' services and improved financial performance. However, the industry is also subject to cyclical downturns, which can significantly impact rig utilization rates and day rates. Technological advancements, such as automation and digitalization, are transforming the drilling industry, requiring companies like Nabors to invest in new technologies and adapt their business models to remain competitive.
Nabors' product pipeline focuses on further developing and commercializing its suite of drilling technologies. This includes enhancing its automated drilling systems, improving its directional steering control systems, and expanding its RigCLOUD platform. The company aims to leverage these technologies to improve drilling efficiency, reduce costs, and enhance safety for its customers. By continuously innovating and investing in new technologies, Nabors seeks to maintain its competitive advantage and capture a larger share of the drilling market.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
10.1%
Sector: -1.2%
-965% VS SCTR
Economic Moat Analysis
Nabors Industries possesses a narrow economic moat, primarily derived from switching costs and, to a lesser extent, intangible assets. The switching costs arise from the integrated nature of Nabors' services and the potential disruption associated with changing drilling contractors. Once a drilling program is underway, switching contractors can lead to delays, increased costs, and potential operational risks. This creates a degree of stickiness with existing customers, particularly for complex and technically demanding drilling operations.
The company's intangible assets include its proprietary drilling technologies and its reputation for providing reliable and efficient drilling services. These technologies, such as its automated drilling systems and directional steering control systems, provide a competitive advantage by improving drilling performance and reducing costs for its customers. Nabors' reputation, built over decades of experience in the drilling industry, also contributes to its ability to attract and retain customers. However, these intangible assets are not insurmountable, as competitors can develop similar technologies and build their own reputations over time.
The moat is considered narrow because the drilling industry is highly competitive, with numerous players offering similar services. While Nabors has a strong market position and a differentiated technology offering, it faces intense competition from other large drilling contractors and smaller, regional players. The industry is also subject to cyclical downturns, which can erode the value of any competitive advantages. During periods of low drilling activity, pricing pressure intensifies, and customers are more likely to switch contractors in search of lower rates.
Furthermore, the commoditized nature of drilling services limits Nabors' ability to command premium pricing. While the company's higher-specification rigs and advanced technologies provide a degree of differentiation, customers are ultimately price-sensitive and will often choose the lowest-cost option, particularly during periods of low commodity prices. This limits Nabors' ability to generate consistently high returns on invested capital and maintain a wide economic moat.
The moat's strength is also influenced by the evolving technological landscape. As new drilling technologies emerge, Nabors must continuously invest in innovation to maintain its competitive advantage. Failure to keep pace with technological advancements could erode its market share and weaken its economic moat. The company's ability to successfully commercialize its new technologies and integrate them into its existing operations will be crucial for sustaining its competitive position.
Financial Health & Profitability
Nabors Industries' financial health presents a mixed picture. The company's revenue has shown positive growth, with FY2025 revenue at $3.18 billion compared to $2.93 billion in FY2024 and $3.01 billion in FY2023. This indicates a recovery in drilling activity and increased demand for Nabors' services. The company's gross margin has remained relatively stable, hovering around 40%, while the operating margin has improved significantly, reaching 14.8% in FY2025 compared to 8.5% in FY2024. This suggests improved operational efficiency and cost control.
However, Nabors' profitability has been volatile. While FY2025 saw a net income of $374.43 million, FY2024 resulted in a net loss of $87.99 million. This volatility is largely due to the cyclical nature of the oil and gas industry and the impact of commodity price fluctuations on drilling activity. The company's ROE of 34.0% significantly exceeds the sector average of 6.9%, indicating superior profitability relative to its peers. However, this high ROE should be viewed with caution, as it is influenced by the company's high leverage.
Nabors' balance sheet is characterized by a significant debt load. As of the latest data, the company has $2.35 billion in total debt and $428.05 million in total cash. The debt-to-equity ratio of 351.00 is substantially higher than the sector average of 55.00, indicating a high degree of financial leverage. This high leverage increases the company's financial risk and makes it more vulnerable to cyclical downturns in the oil and gas industry. However, the current ratio of 1.56 suggests adequate liquidity to meet short-term obligations.
Free cash flow generation has been inconsistent. While the company reported positive free cash flow of $92.47 million for the trailing twelve months, quarterly data shows significant fluctuations. For example, Q3 FY2024 saw free cash flow of $182.91 million, while Q2 FY2024 saw negative free cash flow of $-136.93 million. This inconsistency reflects the variability in drilling activity and the timing of capital expenditures. Consistent free cash flow generation is crucial for Nabors to reduce its debt load and improve its financial health.
The quarterly financial history reveals a trend of improving profitability in FY2025, with consistent positive net income in Q1 and Q3. However, Q2 FY2025 saw a slight net loss, highlighting the ongoing volatility in the company's financial performance. The company's ability to sustain its recent profitability and generate consistent free cash flow will be critical for improving its financial health and reducing its debt burden.
Valuation Assessment
Nabors Industries' valuation appears compelling based on several key metrics. The company's P/E ratio of 4.3x is significantly lower than the sector average of 19.5x, suggesting that the stock is undervalued relative to its earnings. Similarly, the company's EV/EBITDA ratio of 0.6x is substantially lower than the sector average of 3.5x, indicating that the stock is undervalued relative to its enterprise value and operating performance. These low multiples suggest that the market is overly pessimistic about Nabors' ability to sustain its recent profitability and manage its debt load.
However, it's crucial to consider the company's high leverage when assessing its valuation. The high debt-to-equity ratio increases the company's financial risk and makes it more vulnerable to cyclical downturns. This risk is likely reflected in the company's low valuation multiples. Investors may be discounting the stock due to concerns about the company's ability to service its debt and generate consistent free cash flow.
Despite the high leverage, Nabors' strong ROE of 34.0% suggests that the company is generating significant returns on its equity. This high ROE, coupled with the low valuation multiples, indicates that the stock may be a bargain for investors who are willing to take on the associated risk. If Nabors can successfully reduce its debt load and sustain its recent profitability, the stock could experience significant upside.
The company's free cash flow yield, while not explicitly provided, can be estimated based on the free cash flow of $92.47 million and the market cap of $1.17 billion. This results in a free cash flow yield of approximately 7.9%, which is attractive compared to other companies in the energy sector. A high free cash flow yield suggests that the company is generating significant cash flow relative to its market value, which could be used to reduce debt, invest in growth opportunities, or return capital to shareholders.
Overall, Nabors' valuation appears attractive based on its low P/E and EV/EBITDA ratios, high ROE, and estimated free cash flow yield. However, investors should carefully consider the company's high leverage and the cyclical nature of the oil and gas industry before investing in the stock. The stock is likely cheap due to the perceived risk associated with its debt load, but successful debt reduction and continued operational improvements could lead to substantial upside.
Risk & Uncertainty
Nabors Industries faces several specific risks that could negatively impact its business and financial performance. The most significant risk is the cyclical nature of the oil and gas industry. Demand for Nabors' drilling services is highly correlated with oil and gas prices, and a decline in commodity prices could lead to reduced drilling activity and lower day rates. This could significantly impact the company's revenue and profitability, making it difficult to service its debt and generate free cash flow.
Another key risk is the company's high leverage. Nabors has a substantial amount of debt outstanding, which increases its financial risk and makes it more vulnerable to cyclical downturns. The company's ability to service its debt depends on its ability to generate consistent free cash flow, which is subject to fluctuations in drilling activity and commodity prices. Failure to meet its debt obligations could lead to financial distress and potentially bankruptcy.
Competition is also a significant risk for Nabors. The drilling industry is highly competitive, with numerous players offering similar services. Nabors faces competition from other large drilling contractors, as well as smaller, regional players. Increased competition could lead to pricing pressure and reduced market share, negatively impacting the company's revenue and profitability.
Technological obsolescence is another risk that Nabors faces. The drilling industry is constantly evolving, with new technologies emerging that can improve drilling efficiency and reduce costs. Nabors must continuously invest in new technologies to maintain its competitive advantage. Failure to keep pace with technological advancements could erode its market share and weaken its economic moat.
Finally, regulatory risks could also impact Nabors' business. The oil and gas industry is subject to extensive regulations, including environmental regulations and safety regulations. Changes in these regulations could increase the company's operating costs and limit its ability to conduct drilling operations. Increased scrutiny of hydraulic fracturing, or fracking, could also negatively impact drilling activity and demand for Nabors' services.
Bulls Say / Bears Say
The Bull Case
BULL VIEWNabors' depressed valuation multiples offer a compelling entry point, as the market is overlooking the company's improving operational efficiency and strong ROE relative to its peers.
BULL VIEWThe company's focus on higher-specification rigs and advanced drilling technologies positions it to benefit from increased drilling activity in unconventional resource plays, driving revenue growth and free cash flow generation.
BULL VIEWSuccessful debt reduction, fueled by consistent free cash flow, will significantly de-risk the company and unlock substantial upside for the stock as investors recognize its improved financial health.
The Bear Case
BEAR VIEWNabors' high debt load and the cyclical nature of the oil and gas industry make it a risky investment, as a downturn in commodity prices could lead to financial distress and potentially bankruptcy.
BEAR VIEWThe company's inconsistent free cash flow generation and volatile profitability raise concerns about its ability to service its debt and sustain its recent performance.
BEAR VIEWIntense competition in the drilling industry and the potential for technological obsolescence could erode Nabors' market share and weaken its economic moat, limiting its long-term growth potential.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score NBR and 4,400+ other equities.
NABORS INDUSTRIES LTD exhibits a 32% valuation discount relative to institutional benchmarks. This represents a constructive entry window based on current multiples.
Return on Assets
Efficiency of asset utilization
6.8%
Sector: 3.7%
Gross Margin
Pricing power and cost efficiency
55.1%
Sector: 52.7%
Operating Margin
Core business profitability
7.1%
Sector: 10.7%
Net Margin
Bottom-line profitability
10.0%
Sector: 6.4%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
