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Ranger Energy is Undervalued Now: Time to Bet on the Stock Now?
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Key Takeaways
Ranger Energy trades at an EV/EBITDA of 2.94X, well below the industry average of 6.68X.
Favorable oil prices and a focus on well maintenance support RNGR's strong business outlook.
RNGR's High-Spec Rigs segment and debt-free balance sheet bolster its appeal to investors.
Ranger Energy Services Inc. (RNGR - Free Report) is currently trading at a trailing 12-month enterprise value-to-EBITDA (EV/EBITDA) of 2.94X, which is below the broader industry average of 6.68X. In comparison,Halliburton Company (HAL - Free Report) andSLB (SLB - Free Report) are trading at 5.47X and 6.66X, respectively.
Image Source: Zacks Investment Research
Could this valuation gap make Ranger Energy an attractive undervalued bet? Before drawing investment conclusions, let’s analyze the business fundamentals of RNGR, which is a well-known provider of mobile rig well services.
Oil Price Still Favorable for RNGR
In its latest short-term energy outlook, the U.S. Energy Information Administration (“EIA”) came out with its expectations of a lower WTI oil price for 2025 of $65 per barrel compared with the prior year’s $76.6. EIA believes that the reason for declining crude prices is rising inventories of the commodity. Despite the decline, the pricing environment of the commodity remains favorable for exploration and production activities, as the breakeven costs of most of the major upstream players are much lower. This, in turn, will raise demand for Ranger Energy’s service offerings, which are primarily specialized in maintaining wells.
According to Ranger Energy, customers are prioritizing spending heavily on production-related activities, rather than exploration and drilling operations. RNGR, with its highly advanced, well-serviced rigs, offering services primarily associated with well maintenance and production optimization, is poised to capitalize on the current trend.
Halliburton and SLB, leading oilfield service providers in the same industry, are also in a strong position to gain as upstream business operations are currently favorable. In other words, since oilfield service providers help explorers and producers in efficiently setting up oil and gas wells, HAL and SLB will not be an exception.
RNGR Generates Handsome High-Spec Rigs Margins
Ranger Energy, in its August 2025 investment presentation, stated that it has been generating handsome revenues and profits from its High-Specification Rigs business segment. RNGR mentioned that although the rig count for drilling activities onshore declined substantially, production of oil and natural gas has not fallen materially.
This will support the demand for the company’s specialized equipment and services for maintaining and completing oil and natural gas wells in the onshore resources of the United States, which is reflected in the consistent performance of RNGR’s business unit.
Image Source: Ranger Energy Services Inc.
Time to Bet on the Stock?
Ranger Energy also has a strong balance sheet with handsome generations of cash flow and zero net debt. Thus, the company can lean on its robust balance sheet when the business environment turns unfavorable.
Over the past year, although RNGR has gained just 1.4%, the stock outperformed the industry’s 11.4% decline, as well as HAL and SLB’s 26.1% and 26.9% plunge, respectively.
Image: Bigstock
Ranger Energy is Undervalued Now: Time to Bet on the Stock Now?
Key Takeaways
Ranger Energy Services Inc. (RNGR - Free Report) is currently trading at a trailing 12-month enterprise value-to-EBITDA (EV/EBITDA) of 2.94X, which is below the broader industry average of 6.68X. In comparison,Halliburton Company (HAL - Free Report) andSLB (SLB - Free Report) are trading at 5.47X and 6.66X, respectively.
Could this valuation gap make Ranger Energy an attractive undervalued bet? Before drawing investment conclusions, let’s analyze the business fundamentals of RNGR, which is a well-known provider of mobile rig well services.
Oil Price Still Favorable for RNGR
In its latest short-term energy outlook, the U.S. Energy Information Administration (“EIA”) came out with its expectations of a lower WTI oil price for 2025 of $65 per barrel compared with the prior year’s $76.6. EIA believes that the reason for declining crude prices is rising inventories of the commodity. Despite the decline, the pricing environment of the commodity remains favorable for exploration and production activities, as the breakeven costs of most of the major upstream players are much lower. This, in turn, will raise demand for Ranger Energy’s service offerings, which are primarily specialized in maintaining wells.
According to Ranger Energy, customers are prioritizing spending heavily on production-related activities, rather than exploration and drilling operations. RNGR, with its highly advanced, well-serviced rigs, offering services primarily associated with well maintenance and production optimization, is poised to capitalize on the current trend.
Halliburton and SLB, leading oilfield service providers in the same industry, are also in a strong position to gain as upstream business operations are currently favorable. In other words, since oilfield service providers help explorers and producers in efficiently setting up oil and gas wells, HAL and SLB will not be an exception.
RNGR Generates Handsome High-Spec Rigs Margins
Ranger Energy, in its August 2025 investment presentation, stated that it has been generating handsome revenues and profits from its High-Specification Rigs business segment. RNGR mentioned that although the rig count for drilling activities onshore declined substantially, production of oil and natural gas has not fallen materially.
This will support the demand for the company’s specialized equipment and services for maintaining and completing oil and natural gas wells in the onshore resources of the United States, which is reflected in the consistent performance of RNGR’s business unit.
Time to Bet on the Stock?
Ranger Energy also has a strong balance sheet with handsome generations of cash flow and zero net debt. Thus, the company can lean on its robust balance sheet when the business environment turns unfavorable.
Over the past year, although RNGR has gained just 1.4%, the stock outperformed the industry’s 11.4% decline, as well as HAL and SLB’s 26.1% and 26.9% plunge, respectively.
Hence, it is probably the right time to bet on the undervalued stock right away. Currently, Ranger Energy sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.