Long-established in the Oil & Gas industry, Halliburton Co (HAL, Financial) has enjoyed a stellar reputation. It has recently witnessed a surge of 3.08%, juxtaposed with a three-month change of 33.38%. However, fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Halliburton Co.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- 1. Financial strength rank: 6/10
- 2. Profitability rank: 6/10
- 3. Growth rank: 1/10
- 4. GF Value rank: 3/10
- 5. Momentum rank: 10/10
Based on the above method, GuruFocus assigned Halliburton Co the GF Score of 67 out of 100, which signals poor future outperformance potential.
Understanding Halliburton Co's Business
With a market cap of $35.77 billion and sales of $22.41 billion, Halliburton Co is one of the three largest oilfield service firms in the world. It offers superior expertise in a number of business lines, including completion fluids, wireline services, cementing, and countless others. It's the number-one pressure pumper in North America, and has been a leading innovator in hydraulic fracturing over the past two decades. The company's operating margin stands at 17.06%.
Growth Prospects
A lack of significant growth is another area where Halliburton Co seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -4.4 per year over the past three years, which underperforms worse than 76.62% of 851 companies in the Oil & Gas industry. Stagnating revenues may pose concerns in a fast-evolving market. Lastly, Halliburton Co's predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Conclusion
Despite Halliburton Co's historical performance and reputation in the Oil & Gas industry, the company's financial strength, profitability, and growth metrics suggest potential underperformance in the future. The GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. Investors should consider these factors when making investment decisions. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
