Core Viewpoint - Patterson-UTI Energy, Inc. reported an average of 93 drilling rigs operating in the United States for December 2025 [1] Company Summary - The company is actively engaged in drilling operations, with a specific focus on the U.S. market [1]

Financial Performance - In Q4 2025, the company averaged 93 active rigs in the United States, with cost controls exceeding expectations[3] - The company anticipates capital expenditures for 2026 to be less than $500 million, with strong adjusted free cash flow (FCF) expected for the year[3] - Adjusted EBITDA per active U.S. rig remained steady at approximately $3.6 million from 2023 to LTM Q3 2025[10] - The company has seen a 40% increase in revenue per U.S. industry rig since the beginning of 2023, following the acquisition of Ulterra Drilling Technologies[14] - Adjusted free cash flow for the last twelve months ended September 30, 2025, was $332.963 million, with a conversion rate of 36%[29] - Adjusted EBITDA for the last twelve months ended September 30, 2025, was $921.887 million[30] - Revenues for Drilling Services, Completion Services, Drilling Products, and Other for the last twelve months ended September 30, 2025, were $1.605 billion, $2.842 billion, $346.455 million, and $44.706 million, respectively[27] - The adjusted gross profit for Drilling Services, Completion Services, Drilling Products, and Other for the last twelve months ended September 30, 2025, was $610.962 million, $415.126 million, $150.729 million, and $16.860 million, respectively[27] Shareholder Returns - The company aims to return at least 50% of adjusted FCF to shareholders annually through dividends and share repurchases[3] - Since the beginning of 2024 through Q3 2025, the company has returned more than 85% of its adjusted free cash flow (FCF) to investors through dividends and share repurchases[23] - The company commits to return at least 50% of its adjusted FCF to shareholders annually through the cycle[23] - The company has paid a quarterly dividend of $0.08 per share for thirteen consecutive quarters, including the December 2025 dividend[23] - The company has a flexible distribution method to maximize shareholder value over time[23] Liquidity and Debt Management - Total liquidity as of September 30, 2025, was $682 million, including a cash balance of $187 million[22] - The company maintains a low leverage ratio of approximately 1x net debt to LTM adjusted EBITDA as of September 30, 2025[22] - The company reported a net debt of $1.108 billion as of September 30, 2025, with a debt-to-adjusted EBITDA ratio of 1.40x[30] - The company has no senior note maturities until 2028, maintaining an investment-grade credit rating from all three major rating agencies[5] Technology and Sustainability - The company is focused on advancing technologies and efficiencies to drive improved returns in core markets[5] - The company has demonstrated a commitment to sustainability with innovations such as the deployment of the first electric frac spread in 2023 and the launch of iFGS Intelligent Field Gas Solutions in 2024[25]

Company Overview - Patterson-UTI Energy, Inc. (NASDAQ:PTEN) provides drilling and completion services for oil and gas companies, including hydraulic fracturing, power and logistics solutions, and supplies for oilfield tools [1] - The company reported an average of 93 drilling rigs operating in the U.S. during November 2025, with an average count of 94 rigs earning revenue under drilling contracts for the two months ending November 30, 2025 [1] Market Sentiment - Jim Cramer expressed a negative outlook on oil and gas stocks, stating that the show has not recommended these stocks for a long time and will not do so this year [1] Investment Comparison - While Patterson-UTI Energy has potential as an investment, certain AI stocks are considered to offer greater upside potential and less downside risk [2]

Core Insights - The Zacks Rank system emphasizes earnings estimates and revisions to identify winning stocks, while also considering trends in value, growth, and momentum [1] Value Investing - Value investing is a popular strategy that utilizes fundamental analysis and traditional valuation metrics to identify stocks perceived as undervalued by the market [2] Patterson-UTI Energy (PTEN) - Patterson-UTI Energy (PTEN) is highlighted as a strong value stock, currently holding a Zacks Rank of 2 (Buy) and an A grade in the Value category [3] - PTEN's price-to-book (P/B) ratio is 0.62, which is attractive compared to the industry average of 1.33. Over the past year, PTEN's P/B has fluctuated between 0.61 and 1.06, with a median of 0.80 [4] - The price-to-sales (P/S) ratio for PTEN is 0.49, significantly lower than the industry's average P/S of 1.19, indicating potential undervaluation [5] - Overall, PTEN appears undervalued based on these metrics, and its strong earnings outlook positions it as one of the market's strongest value stocks [6]

Core Viewpoint - Patterson-UTI Energy, Inc. reported an average of 93 drilling rigs operating in the United States for November 2025 [1] Company Summary - The company is actively engaged in drilling operations, with a specific focus on the U.S. market [1]

Core Insights - The Zacks Oil and Gas - Drilling industry is facing challenges due to reduced near-term spending, delayed contracts, and rising operational complexities, leading to uneven rig demand and pricing pressures [1][3][5] - Despite the negative outlook, certain companies like Transocean, Helmerich & Payne, and Patterson-UTI Energy are well-positioned to navigate the evolving landscape [1][16][24] Industry Overview - The industry comprises companies providing drilling rigs and services on a contractual basis for oil and gas exploration and development [2] - Offshore drilling companies exhibit higher volatility compared to onshore counterparts, with share prices more closely tied to oil prices [2] Trends Impacting the Industry - **Slower Near-Term Contracting**: Operators are cautious due to fluctuating commodity prices, resulting in delayed contracts and fewer new project approvals [3] - **Deepwater Demand Strengthening**: There is a gradual increase in global deepwater activity, with operators seeking large offshore projects due to underinvestment in reserves [4] - **Rising Operating Complexity and Cost Pressures**: Modern drilling programs are becoming more complex, increasing operational risks and costs, which can strain margins [5] Industry Performance - The Zacks Oil and Gas - Drilling industry ranks 226 out of 243 Zacks industries, placing it in the bottom 6% [6][7] - The industry's earnings estimates for 2025 have decreased by 90% over the past year, indicating a negative outlook [8] Comparative Performance - The industry has underperformed compared to the broader Zacks Oil – Energy sector and the S&P 500, declining by 6.8% over the past year while the sector increased by 3.8% and the S&P 500 gained over 15% [10] Current Valuation - The industry is currently trading at an EV/EBITDA ratio of 4.99X, significantly lower than the S&P 500's 18.66X and the sector's 5.51X [14] Companies to Watch - **Transocean**: A leading offshore drilling contractor with a market cap of $4.9 billion, expected to see 119.2% earnings growth in 2025 [18] - **Helmerich & Payne**: The largest land drilling contractor in the U.S. with a market cap of nearly $3 billion, known for its proprietary FlexRig fleet [22] - **Patterson-UTI Energy**: A major drilling and completions service provider with a significant fleet and a market cap of approximately $3 billion [26]

Core Insights - Investors are increasingly turning to dividend-yielding stocks during market turbulence, as these companies typically have high free cash flows and offer substantial dividend payouts [1] Group 1: Analyst Ratings and Price Targets - ONEOK Inc (NYSE:OKE) has a dividend yield of 5.81%. Citigroup analyst Spiro Dounis maintained a Buy rating but reduced the price target from $102 to $95, with an accuracy rate of 74%. TD Cowen analyst Jason Gabelman maintained a Hold rating and lowered the price target from $78 to $76, with an accuracy rate of 61% [7] - Patterson-UTI Energy Inc (NASDAQ:PTEN) has a dividend yield of 5.60%. Susquehanna analyst Charles Minervino maintained a Positive rating and cut the price target from $8 to $7, with an accuracy rate of 66%. Barclays analyst David Anderson maintained an Overweight rating and also reduced the price target from $8 to $7, with an accuracy rate of 66% [7] - Chevron Corp (NYSE:CVX) has a dividend yield of 4.61%. Piper Sandler analyst Ryan Todd maintained an Overweight rating and slightly reduced the price target from $169 to $168, with an accuracy rate of 67%. Morgan Stanley analyst Devin McDermott maintained an Overweight rating and increased the price target from $177 to $180, with an accuracy rate of 76% [7] Group 2: Recent Company News - ONEOK reported positive quarterly results on October 28, which was highlighted by Benzinga Pro's real-time newsfeed [7] - Patterson-UTI Energy also posted upbeat quarterly results on October 22, as reported by Benzinga Pro's real-time newsfeed [7] - Chevron unveiled its 2030 roadmap during its investor day on November 12, focusing on steady cash flow growth, portfolio enhancement, AI data center power solutions, and increased shareholder returns [7]

Core Insights - The domestic oil and gas industry is currently undergoing a consolidation phase due to lower commodity prices, reduced exploration and production budgets, and a decline in the U.S. rig count [1] Industry Overview - The industry has experienced several strong years prior to this phase of consolidation [1] - The negative tone in headlines reflects the challenges faced by the industry, including financial pressures and operational adjustments [1] Research Approach - Avalon Capital Research aims to provide independent and actionable research on U.S.-listed companies, focusing on clarity and data-driven insights [1] - The company emphasizes the importance of filtering out noise and highlighting what matters for investors, regardless of their experience level [1]

Industry Overview - The domestic oil and gas industry is currently undergoing a consolidation phase after several strong years [1] - Factors contributing to this phase include lower commodity prices, reduced exploration and production budgets, and a softer U.S. rig count [1] Research Approach - Avalon Capital Research aims to provide independent and actionable research on U.S.-listed companies and market forces [1] - The company emphasizes the importance of clarity in investment research, filtering out noise and focusing on data-driven insights [1] - The goal is to make high-quality analysis accessible to both professional and retail investors without jargon or bias [1]

Core Insights - Patterson-UTI Energy, Inc. reported an average of 94 drilling rigs operating in the United States for October 2025 [1] Company Summary - The company is actively engaged in drilling operations, maintaining a significant number of rigs in operation [1]