RPC Inc (RES, Financial), a leading player in the Oil & Gas industry, has seen a significant surge in its stock price over the past three months. The company's stock price has risen by 32.64%, from $6.94 to $9.21, marking a notable gain. This impressive performance has pushed the company's market cap to $1.99 billion. Over the past week alone, the stock has gained 6.21%, indicating a strong upward momentum. However, the company's GF Value, a measure of intrinsic value defined by GuruFocus.com, has decreased from $11.38 to $10.71 over the past three months. Despite this, the stock's current GF Valuation suggests it is modestly undervalued, a shift from three months ago when it was considered a possible value trap.
Unpacking RPC Inc's Operations
RPC Inc is a renowned oilfield services company that primarily serves independent and major oil and gas companies engaged in the exploration, production, and development of oil and gas properties throughout the United States. The company operates through two main segments: Technical Services and Support Services. The Technical Services segment, which generates the majority of the company's revenue, offers a range of services including pressure pumping, downhole tools, coiled tubing, snubbing, nitrogen, well control, wireline, and fishing. The Support Services segment provides drill pipe and related tools, pipe handling, pipe inspection and storage services, and oilfield training and consulting services.
Profitability Analysis
RPC Inc's profitability is relatively high, with a Profitability Rank of 6/10. The company's Operating Margin stands at 20.20%, outperforming 67.48% of companies in the same industry. Furthermore, the company's ROE, ROA, and ROIC, which measure the company's ability to generate profits relative to its equity, assets, and invested capital respectively, are all higher than the majority of companies in the industry. Specifically, the company's ROE is 34.43%, its ROA is 26.31%, and its ROIC is 32.88%. Over the past 10 years, the company has been profitable for 6 years, outperforming 59.17% of companies.
Growth Prospects
Despite its strong profitability, RPC Inc's growth is relatively low, with a Growth Rank of 2/10. However, the company's 3-year and 5-year revenue growth rates per share are better than 47.56% and 20.15% of companies in the industry, respectively. Specifically, the company's 3-Year Revenue Growth Rate per Share is 9.20%, while its 5-Year Revenue Growth Rate per Share is -7.50%.
Top Holders of RPC Inc's Stock
The top three holders of RPC Inc's stock are Mario Gabelli (Trades, Portfolio), Chuck Royce (Trades, Portfolio), and First Eagle Investment (Trades, Portfolio). Mario Gabelli (Trades, Portfolio) holds the largest stake with 3,081,842 shares, representing 1.42% of the company's total shares. Chuck Royce (Trades, Portfolio) holds 1,101,600 shares, accounting for 0.51% of the total shares, while First Eagle Investment (Trades, Portfolio) holds 281,499 shares, representing 0.13% of the total shares.
Competitive Landscape
RPC Inc operates in a competitive industry, with key competitors including Archrock Inc(AROC, Financial), Helix Energy Solutions Group Inc(HLX, Financial), and ProFrac Holding Corp(ACDC, Financial). Archrock Inc has a market cap of $2.06 billion, slightly higher than RPC Inc's market cap of $1.99 billion. Helix Energy Solutions Group Inc and ProFrac Holding Corp have market caps of $1.75 billion and $1.79 billion, respectively, slightly lower than RPC Inc's market cap.
Conclusion
In conclusion, RPC Inc's stock has seen a significant surge over the past three months, driven by its strong profitability and modest growth. The company's stock is currently considered modestly undervalued, offering potential upside for investors. However, the company operates in a competitive industry, and its growth is relatively low, which could pose challenges in the future. Therefore, investors should carefully consider these factors before making an investment decision.
