Company Overview - Precision Drilling Corporation is a leading provider of safe and environmentally responsible services to the energy industry, offering access to an extensive fleet of Super Series drilling rigs [4] - The company has commercialized an industry-leading digital technology portfolio known as Alpha™, which utilizes advanced automation software and analytics to deliver efficient, predictable, and repeatable results for energy customers [4] - Precision also offers well service rigs, camps, and rental equipment, supported by a comprehensive mix of technical support services and skilled personnel [4] Upcoming Financial Results - Precision Drilling intends to release its 2025 third quarter results after the market closes on Wednesday, October 22, 2025 [1] - A conference call is scheduled for Thursday, October 23, 2025, at 11:00 a.m. MT (1:00 p.m. ET) to discuss the results [1] - Participants can register for the conference call to receive a dial-in number and unique PIN for questions [1][2] Additional Information - Precision Drilling is headquartered in Calgary, Alberta, Canada, and is listed on the Toronto Stock Exchange under the symbol "PD" and on the New York Stock Exchange under the symbol "PDS" [5] - For more information, the company can be contacted through its Vice President of Investor Relations, Lavonne Zdunich [6]

Company Overview - Precision Drilling Corporation is a leading provider of safe and environmentally responsible services to the energy industry, offering access to an extensive fleet of Super Series drilling rigs [4] - The company has commercialized an industry-leading digital technology portfolio known as Alpha™, which utilizes advanced automation software and analytics to deliver efficient, predictable, and repeatable results for energy customers [4] - Precision also provides well service rigs, camps, and rental equipment, supported by a comprehensive mix of technical support services and skilled personnel [4] Upcoming Financial Results - Precision intends to release its 2025 third quarter results after the market closes on October 22, 2025 [1] - A conference call is scheduled for October 23, 2025, at 11:00 a.m. MT (1:00 p.m. ET) to discuss the results [1] - Participants can register for the conference call to receive a dial-in number and unique PIN for questions [1][2] Webcast and Replay - The conference call will also be webcast, and a replay will be available on Precision's website for 12 months [2]

Industry Overview - The Zacks Oil and Gas - Drilling industry includes companies that provide rigs and services for oil and gas exploration and development on a contractual basis [2] - Drilling for hydrocarbons is costly and technically challenging, with future prospects primarily dependent on contracting activity and rig availability rather than oil or gas prices [2] - Offshore drilling companies experience higher volatility compared to onshore counterparts, with their share prices more closely correlated to oil prices [2] Current Market Conditions - The industry is currently facing uncertainty and volatility due to cautious customer spending, geopolitical risks, and fluctuating oil prices [1][3] - Contracting activity has slowed, with operators deferring work to maintain capital discipline, impacting near-term earnings visibility [3] - Day rates have decreased from previous highs, and rig utilization is expected to bottom in the mid-80% range before recovery [5] Long-Term Outlook - A structural rise in LNG demand is anticipated to drive drilling activity, particularly from 2026 onward, providing a more stable outlook for drillers [1][4] - The global expansion of LNG is expected to support rig utilization and long-cycle contracts tied to offshore basins [1][4] Industry Performance - The Zacks Oil and Gas - Drilling industry ranks 210 out of 244 Zacks industries, placing it in the bottom 14% [6][7] - The industry's earnings estimates for 2025 have decreased by 94.6% over the past year, and estimates for 2026 have fallen by 66% [9][8] - Over the past year, the industry has declined by 20%, underperforming the broader Zacks Oil - Energy sector, which increased by 5.7%, and the S&P 500, which gained 20.2% [10] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 5.50X, significantly lower than the S&P 500's 17.94X but above the sector's 5X [13][12] - Historical trading ranges for the industry show a high of 24.81X and a low of 4.97X over the past five years, with a median of 14.54X [13] Notable Companies - **Transocean**: A leading offshore drilling contractor with a focus on ultra-deepwater and harsh environment drilling, reported contract drilling revenues of $988 million for Q2 2025, a nearly 15% increase year-over-year [15][16] - **Helmerich & Payne**: The largest land drilling contractor in the U.S., known for its FlexRig fleet and advanced automation, has a market capitalization of $2 billion and has lost 33% in a year [18][20] - **Precision Drilling**: A top drilling rig contractor in Canada with operations in the U.S. and the Middle East, has a market capitalization of $743.3 million and has seen its earnings estimates for 2025 rise from $3.89 to $4.70 per share in the past 60 days [22][24]

Core Viewpoint - Precision Drilling (PDS) shares have shown a modest gain of 0.7% recently, but analysts suggest a significant upside potential with a mean price target of $71.06, indicating a 32.9% increase from the current price of $53.47 [1] Price Targets and Analyst Estimates - The mean price target is based on eight short-term estimates with a standard deviation of $9.08, where the lowest estimate is $55.76 (4.3% increase) and the highest is $87.60 (63.8% increase) [2] - A low standard deviation among price targets suggests a strong consensus among analysts regarding the stock's potential movement [9] Earnings Estimates and Analyst Agreement - Analysts have shown increasing optimism about PDS's earnings prospects, with a positive trend in earnings estimate revisions, which historically correlates with stock price movements [11] - Over the past 30 days, one earnings estimate has increased, leading to a 40.2% rise in the Zacks Consensus Estimate for the current year [12] Zacks Rank and Investment Potential - PDS holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13] - While consensus price targets may not be entirely reliable, the implied direction of price movement appears to be a useful guide for investors [14]

Core Insights - The article emphasizes the importance of value investing, highlighting the strategy of identifying undervalued companies in the market [2] - Zacks has developed a Style Scores system to categorize stocks, with a focus on the "Value" category for value investors [3] Company Analysis: Precision Drilling (PDS) - Precision Drilling currently holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating strong potential for value investors [4] - The Forward P/E ratio for PDS is 10.46, significantly lower than the industry average of 24.89, suggesting it may be undervalued [4] - Over the past year, PDS's Forward P/E has fluctuated between 4.90 and 12.48, with a median of 6.84, indicating volatility in valuation [4] - The P/B ratio for PDS is 0.6, which is lower than the industry average of 0.87, further supporting the notion of undervaluation [5] - PDS's P/S ratio stands at 0.53, compared to the industry's average of 0.71, reinforcing its attractiveness as a value stock [6] - Overall, the combination of these metrics suggests that Precision Drilling is likely undervalued and presents a strong investment opportunity for value investors [7]

Core Insights - Investing in stocks based on valuation metrics, particularly the price-to-sales (P/S) ratio, can identify opportunities with strong upside potential, especially for unprofitable or early-stage companies [1][2][3] Valuation Metrics - The P/S ratio compares a company's market capitalization to its revenues, providing a clearer picture of value when earnings are minimal or volatile [2][5] - A P/S ratio below 1 indicates a good bargain, as investors pay less than a dollar for each dollar of revenue generated [6] - The P/S ratio is preferred over the price-to-earnings (P/E) ratio due to the difficulty of manipulating sales figures compared to earnings [7] Investment Opportunities - Low P/S stocks can offer compelling opportunities for growth at a discount, especially when combined with strong fundamentals and positive business momentum [3][10] - Companies such as Janus Henderson Group plc (JHG), The Greenbrier Companies, Inc. (GBX), Precision Drilling (PDS), The Mosaic Company (MOS), and PagSeguro Digital (PAGS) have low P/S ratios and potential for higher returns [4][10] Company Profiles - **Janus Henderson Group plc (JHG)**: A global asset management firm with a strong balance sheet and positive net inflows, positioned for long-term value creation [13] - **The Greenbrier Companies, Inc. (GBX)**: A leading supplier in freight transportation markets, benefiting from strong market demand and a profitable leasing business [15] - **Precision Drilling (PDS)**: An oilfield services company with a positive outlook supported by U.S. drilling activity and strategic expansions [17] - **The Mosaic Company (MOS)**: A major producer of phosphate and potash, experiencing strong demand and improving cost structures [20] - **PagSeguro Digital (PAGS)**: A financial services provider in Brazil, enhancing its digital banking platform and focusing on sustainable growth [22]

Group 1 - The Conservative Income Portfolio targets high-value stocks with significant margins of safety and aims to reduce volatility through well-priced options [1] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields of 7-9% while minimizing volatility [1] - Precision Drilling (TSX: PD:CA) has underperformed, lagging behind the S&P 7 by 21% since the initial coverage [1] Group 2 - Trapping Value offers Covered Calls and Preferred Stock Trader focuses on Fixed Income, with the Covered Calls Portfolio aimed at lower volatility income investing and capital preservation [2] - The fixed income portfolio emphasizes purchasing securities with high income potential and significant undervaluation compared to peers [2] Group 3 - Trapping Value consists of a team of analysts with over 40 years of combined experience in generating options income while prioritizing capital preservation [3] - The investing group operates the Conservative Income Portfolio in collaboration with Preferred Stock Trader, featuring two income-generating portfolios and a bond ladder [3]

Group 1 - Precision Drilling (PDS) closed at $53.58, with a 7.9% gain over the past four weeks, and a mean price target of $70.3 indicating a 31.2% upside potential [1] - The average price targets from analysts range from a low of $51.70 to a high of $87.60, with a standard deviation of $10.04, suggesting variability in estimates [2] - Analysts show strong agreement on PDS's ability to report better earnings, with a positive trend in earnings estimate revisions indicating potential upside [4][11] Group 2 - The Zacks Consensus Estimate for PDS has increased by 20.8% over the past month, with no negative revisions, reflecting growing optimism about the company's earnings prospects [12] - PDS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting exact gains, they can provide a directional guide for price movement [14]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Precision Drilling (PDS) as a strong candidate for value investors due to its attractive valuation metrics and earnings outlook [2][7]. Valuation Metrics - Precision Drilling (PDS) has a P/E ratio of 12.48, significantly lower than the industry average of 22.84, indicating potential undervaluation [4]. - The P/B ratio for PDS is 0.63, compared to the industry average of 0.75, suggesting that PDS is trading at a favorable valuation relative to its book value [5]. - PDS's P/S ratio stands at 0.54, which is lower than the industry's average of 0.68, further supporting the notion that PDS may be undervalued [6]. Earnings Outlook - The strength of Precision Drilling's earnings outlook, combined with its favorable valuation metrics, positions it as a compelling value stock in the current market [7].

Financial Performance - Total revenue for Q2 2025 was $406,615, a decrease of 5.5% compared to $429,214 in Q2 2024[3] - Net earnings for Q2 2025 were $16,487, down 20.5% from $20,701 in Q2 2024[5] - Comprehensive income for Q2 2025 was a loss of $21,951 compared to a gain of $26,301 in Q2 2024[5] - Net earnings for the period ending June 30, 2025, were $51,434,000, compared to $57,217,000 for the same period in 2024, reflecting a decrease of approximately 10.5%[8] - Total revenue for the six months ended June 30, 2025, was $902,946,000, an increase from $957,002,000 in the same period of 2024, indicating a decline of about 5.6%[18] - Total revenue for the three months ended June 30, 2025, was $406.615 million, a decrease from $429.214 million in the same period of 2024, representing a decline of approximately 5.9%[22] - Net earnings for reportable segments for the three months ended June 30, 2025, were $16.487 million, compared to $20.701 million in the same period of 2024, reflecting a decrease of about 20.5%[23] - The company reported earnings before income taxes of $108.100 million for the three months ended June 30, 2025, down from $115.121 million in the same period of 2024, a decline of approximately 6.5%[22] - The net earnings attributable to shareholders for the three months ended June 30, 2025, were $16.267 million, compared to $20.701 million in 2024, reflecting a decrease of approximately 21.8%[40] Assets and Liabilities - Total current assets decreased to $411,030 from $501,284 as of December 31, 2024, representing a decline of 18%[1] - Total liabilities increased to $1,077,637 from $1,274,316, a reduction of 15.4%[1] - Long-term debt decreased to $546,429 from $812,469, a reduction of 32.7%[1] - The total assets as of June 30, 2025, amounted to $2.742 billion, a decrease from $2.915 billion as of June 30, 2024, indicating a reduction of approximately 5.9%[24] - The total long-term debt as of June 30, 2025, was $682.610 million, which includes $680.905 million in unsecured senior notes and $10 million in senior credit facilities[25] - The balance of shareholders' equity as of June 30, 2025, was $1,665,200,000, down from $1,681,999,000 at the beginning of the year[8] - The total liability for share-based compensation plans was $23.710 million, down from $57.858 million at December 31, 2024[30] Cash Flow and Capital Expenditures - Cash provided by operations for Q2 2025 was $147,495, compared to $174,075 in Q2 2024, a decrease of 15.2%[6] - Cash at the end of the period was $46,698, down from $73,771 at the beginning of the period[6] - Capital expenditures for the six months ended June 30, 2025, were $112.738 million, compared to $93.950 million for the same period in 2024, showing an increase of about 20%[24] Shareholder Activities - The company reported a share repurchase of $40,921,000 during the period, contributing to a decrease in shareholders' equity[8] - Precision repurchased and cancelled a total of 646,058 common shares for $45 million during the period ended June 30, 2025, compared to 366,214 shares for $34 million in 2024[38] - The company recorded a liability of $5 million for share repurchases estimated to occur during the blackout period as of June 30, 2025[39] - The total number of outstanding Restricted Share Units (RSUs) as of June 30, 2025, was 135,313, down from 179,760 at December 31, 2024[31] Market and Operational Insights - Revenue from Contract Drilling Services in Canada for the three months ended June 30, 2025, was $175,028,000, up from $163,429,000 in 2024, representing an increase of approximately 7.7%[18] - The total revenue from the United States for the six months ended June 30, 2025, was $260,149,000, a decrease from $308,043,000 in the same period of 2024, reflecting a decline of approximately 15.5%[19] - The company experienced a significant impact from seasonal factors, with late March through May traditionally being the slowest period due to weather conditions affecting operations in Canada[20] - The company continues to focus on its two reportable segments: Contract Drilling Services and Completion and Production Services, which are essential for its operational strategy[21] Other Financial Metrics - Basic net earnings per share attributable to shareholders was $1.21, down from $1.44 in Q2 2024, a decline of 16%[3] - Other comprehensive income for the period was a loss of $39,631,000, which negatively impacted the overall equity position[8] - The fair value of unsecured senior notes at June 30, 2025, was approximately $674 million, down from $801 million at December 31, 2024[41] - The weighted average shares outstanding for diluted earnings per share for the six months ended June 30, 2025, was 14,158, a slight decrease from 14,402 in 2024[40] - As of June 30, 2025, Precision's consolidated senior debt to consolidated covenant EBITDA ratio was 0.03, well below the covenant limit of 2.50[28] - The finance charges for the three months ended June 30, 2025, were $14.857 million, an increase from $18.189 million in the same period of 2024, indicating a decrease of approximately 18.3%[23]