NESR

We rate National Energy Services Reunited Corp. (NESR) as a Hold with a composite score of 56.8/100 at a current price of $26.30. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (83th percentile) and value (63th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (28th percentile) and stability (41th percentile) tempers our overall conviction. We assign a Narrow Moat rating (67/100), High uncertainty, and Standard capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. 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.

National Energy Services Reunited Corp. 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 56.8/100 places it at rank #1055 in our full 7,333-stock universe. At $858M in market capitalization, National Energy Services Reunited Corp. is a small-cap player in the Mining space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 15% and momentum in the 83th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 59th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of -3% (-46.4pp vs sector) narrow to operating margins of 103% (+90.9pp vs sector) and net margins of 6.1%, yielding a gross-to-net conversion rate of N/A%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $26.30, National Energy Services Reunited Corp. is trading near fair value based on current fundamentals. Our value factor score of 63/100 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. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 32.6x (a 137% premium to the sector median of 13.7x), EV/EBITDA of 2.9x (discounted to peers), P/B of 2.7x, P/S of 0.5x. 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 National Energy Services Reunited Corp.. Key risk factors include weak quality scores (28th 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: weak quality scores (28th 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 41th percentile and quality factor at the 28th 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 National Energy Services Reunited Corp.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 33.6%, and the balance sheet is managed within acceptable parameters (D/E: 46%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; National Energy Services Reunited Corp. 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, National Energy Services Reunited Corp. receives a Hold rating with a composite score of 56.8/100 (rank #1055 of 7,333). Our quantitative framework assigns a Narrow Moat (67/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 55/100.

Our analysis supports a neutral stance on National Energy Services Reunited Corp.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.