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Investors have fled RPC Inc. (RES - Free Report) in 2023 as crude prices have fallen. But that has created a buying opportunity in this Zacks Rank #1 (Strong Buy). RPC is expected to grow earnings by 67% in 2023.
RPC provides specialized oilfield services and equipment to the oil and natural gas exploration and production companies throughout the United States, including the Gulf of Mexico, mid-continent, southwest, Appalachian and Rocky Mountain regions, and in selected international markets.
RPC is a small cap company, with a market cap of $1.6 billion.
Another Beat in Q4 2022
On Jan 25, 2023, RPC reported its fourth quarter and full year 2022 results. It beat the Zacks Consensus Estimate for the third straight quarter, reporting $0.41 versus the consensus of $0.30.
The oilfield services environment remained robust through the end of the year. Revenue jumped 79.7% to $213.8 million in the fourth quarter of 2023 compared to the prior year due to improved pricing, higher customer activity levels and a larger active fleet of revenue-producing equipment.
As a percentage of revenues, cost of revenues decreased year-over-year to 64% from 74.8% in Q4 2021 due to improved pricing for RPC's services and leverage of direct employment costs.
"As we begin the first quarter of 2023, we expect continued robust drilling and completion activities based on indications from most customers," said Ben M. Palmer, CEO.
Earnings Estimates on the Rise for 2023 and 2024
As RPC is a small cap company, Zacks only has one earnings estimate on the company for 2023 and 2024. But it was raised for both years in the last 60 days.
The Zacks Consensus for 2023 is calling for $1.71 per share up from $1.02 the company made in 2022. That's earnings growth of 67.7%.
2024 is also looking bullish with the Zacks Consensus of $1.84, or another 7.6% in earnings growth.
Doubled the Dividend to Start 2023
RPC's cash balance grew by $90.5 million during the fourth quarter to $126.4 million despite increasing activity and capital expenditures of $49.3 million during the quarter.
On Jan 23, 2023, the board of directors doubled the quarterly dividend to $0.04 per share from $0.02. It is currently yielding 2%.
Shares Sell-Off: Is This a Buying Opportunity?
WTI crude fell below $70 for the first time in 2023 in March 2023. The Street sold off all the energy stocks, even those in the services side, like RPC.
Shares of RPC have fallen 17.8% in just the last month. But they are also now dirt-cheap on a forward P/E basis.
Image Source: Zacks Investment Research
RPC trades at just 4.6x.
If you're looking for an oilfield services stock that's on sale, RPC should be on your short list.
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Bull of the Day: RPC Inc. (RES)
Investors have fled RPC Inc. (RES - Free Report) in 2023 as crude prices have fallen. But that has created a buying opportunity in this Zacks Rank #1 (Strong Buy). RPC is expected to grow earnings by 67% in 2023.
RPC provides specialized oilfield services and equipment to the oil and natural gas exploration and production companies throughout the United States, including the Gulf of Mexico, mid-continent, southwest, Appalachian and Rocky Mountain regions, and in selected international markets.
RPC is a small cap company, with a market cap of $1.6 billion.
Another Beat in Q4 2022
On Jan 25, 2023, RPC reported its fourth quarter and full year 2022 results. It beat the Zacks Consensus Estimate for the third straight quarter, reporting $0.41 versus the consensus of $0.30.
The oilfield services environment remained robust through the end of the year. Revenue jumped 79.7% to $213.8 million in the fourth quarter of 2023 compared to the prior year due to improved pricing, higher customer activity levels and a larger active fleet of revenue-producing equipment.
As a percentage of revenues, cost of revenues decreased year-over-year to 64% from 74.8% in Q4 2021 due to improved pricing for RPC's services and leverage of direct employment costs.
"As we begin the first quarter of 2023, we expect continued robust drilling and completion activities based on indications from most customers," said Ben M. Palmer, CEO.
Earnings Estimates on the Rise for 2023 and 2024
As RPC is a small cap company, Zacks only has one earnings estimate on the company for 2023 and 2024. But it was raised for both years in the last 60 days.
The Zacks Consensus for 2023 is calling for $1.71 per share up from $1.02 the company made in 2022. That's earnings growth of 67.7%.
2024 is also looking bullish with the Zacks Consensus of $1.84, or another 7.6% in earnings growth.
Doubled the Dividend to Start 2023
RPC's cash balance grew by $90.5 million during the fourth quarter to $126.4 million despite increasing activity and capital expenditures of $49.3 million during the quarter.
On Jan 23, 2023, the board of directors doubled the quarterly dividend to $0.04 per share from $0.02. It is currently yielding 2%.
Shares Sell-Off: Is This a Buying Opportunity?
WTI crude fell below $70 for the first time in 2023 in March 2023. The Street sold off all the energy stocks, even those in the services side, like RPC.
Shares of RPC have fallen 17.8% in just the last month. But they are also now dirt-cheap on a forward P/E basis.
Image Source: Zacks Investment Research
RPC trades at just 4.6x.
If you're looking for an oilfield services stock that's on sale, RPC should be on your short list.