Helmerich & Payne trades at $39.88 per share and has stayed right on track with the overall market, gaining 11.6% over the last six months. At the same time, the S&P 500 has returned 12.8%.

Is now a good time to buy HP? Find out in our full research report, it’s free.

Why Does Helmerich & Payne Spark Debate?

Operating the largest fleet of super-spec rigs in North America with technology that can drill horizontal wells over two miles long, Helmerich & Payne (NYSE: HP) provides drilling rigs and crews to oil and gas companies that need wells drilled to extract hydrocarbons from underground.

Two Things to Like:

1. Skyrocketing Revenue Shows Strong Momentum

Cyclical industries such as Energy can make mediocre companies look great for a time, but a long-term view reveals which businesses can actually withstand and adapt to changing conditions. Thankfully, Helmerich & Payne’s 30.3% annualized revenue growth over the last five years was incredible. Its growth surpassed the average energy upstream and integrated energy company and shows its offerings resonate with customers.

2. EBITDA Margin Rising, Profits Up

Adjusted EBITDA margin strips out accounting distortions tied to depletion and historical drilling spend, providing a clearer view of the cash-generating power of the underlying asset base before financing and reinvestment decisions.

Helmerich & Payne’s EBITDA margin rose by 6.3 percentage points over the last year, as its sales growth gave it operating leverage. Its EBITDA margin for the trailing 12 months was 21.8%.

One Reason to Be Careful:

Low Gross Margin Reveals Weak Structural Profitability

While energy gross margins can be distorted by commodity prices, hedging, and short-term cost swings, sustained margins across a full cycle reflect a producer’s underlying asset quality, infrastructure position, and cost structure.

Helmerich & Payne, which averaged 35.1% gross margin over the last five years, exhibits poor unit economics in the sector. It means the company will struggle more at lower commodity prices than peers with better gross margins.

Final Judgment

Helmerich & Payne’s merits more than compensate for its flaws. At $39.88 per share (or 29.2× forward P/E), is now the right time to buy the stock? See for yourself in our in-depth research report, it’s free.

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