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1. Company Snapshot

1.a. Company Description

Newpark Resources, Inc.provides products, rentals, and services primarily to the oil and natural gas exploration and production (E&P) industry.The company operates through two segments, Fluids Systems and Industrial Solutions.


The Fluids Systems segment provides drilling, completion, and stimulation fluids products and related technical services to customers primarily in the North America, Europe, the Middle East, and Africa, as well as other countries in the Asia Pacific and Latin America.The Industrial Solutions segment offers composite matting system rentals utilized for temporary worksite access; related site construction and services to customers in various markets, including power transmission, E&P, pipeline, renewable energy, petrochemical, construction, and other industries primarily in the United States and Europe; and sells composite mats to customers worldwide.This segment also provides access road construction, site planning and preparation, environmental protection, fluids and spill containment, erosion control, and site restoration services.


Newpark Resources, Inc.was incorporated in 1932 and is headquartered in The Woodlands, Texas.

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1.b. Last Insights on NR

Newpark Resources' recent performance was driven by its Q3 2024 earnings release, which showed a decline in earnings, but beat expectations. The company's CEO, Matthew Lanigan, highlighted its focus on specialty rental solutions for the global worksite access market. Additionally, Newpark announced a new brand identity, rebranding as NPK International Inc., emphasizing its commitment to providing best-in-class products and services to support critical infrastructure projects. This strategic shift and rebranding effort are expected to drive growth and improve the company's competitive position in the market.

1.c. Company Highlights

2. NPK International's Strong Q3 2025 Earnings Driven by Rental and Service Revenue Growth

NPK International reported a 56% year-over-year increase in total revenues and a 37% increase in rental and service revenues for the third quarter of 2025. The rental fleet utilization reached a record high, and product sales generated $25 million in revenue. However, elevated transportation costs and cross-rent activity negatively impacted gross margins. The company's EPS was -$1.99305, missing estimates of $0.06. Despite the miss, the company's strong revenue growth and record rental fleet utilization are positive indicators.

Publication Date: Nov -26

📋 Highlights
  • Revenue Growth:: Total revenues surged 56% YoY, with rental and service revenues up 37%.
  • Rental Fleet Performance:: Record utilization drove $25 million in product sales revenue.
  • Capital Investments:: $12 million spent in Q3 on fleet expansion, adding $10 million to full-year investments.
  • Future Growth Targets:: 2025 revenue growth forecasted at >20%, with adjusted EBITDA growth of 30%.
  • Margin Outlook:: Q4 gross margin expected to recover to mid-30s despite transportation cost pressures.

Operational Highlights and Investments

The company invested $12 million in the third quarter to expand its rental fleet and increased its full-year fleet investment by $10 million. NPK International also accelerated its manufacturing capacity expansion planning efforts, aiming to add around half of its existing capacity. As Matthew Lanigan noted, "they're seeing increased traction in the Mid-Atlantic and Midwest, which is a result of commercial efforts to expand geographically." This strategic expansion is expected to drive future growth.

Revenue Growth and Outlook

The company expects to deliver over 20% revenue growth and 30% adjusted EBITDA growth in 2025. Analysts estimate next year's revenue growth at 13.8%, indicating a continued upward trajectory. The outlook for the fourth quarter is positive, with expected rental revenue setting a new quarterly record. NPK International's focus on expanding its rental fleet and manufacturing capacity is expected to drive long-term growth.

Valuation and Capital Allocation

NPK International's current valuation metrics include a P/E Ratio of 31.13, P/B Ratio of 3.08, and P/S Ratio of 3.97. The company's EV/EBITDA ratio is 14.52, indicating a moderate valuation. NPK International prioritizes investments in the growth of its rental fleet and expects to continue returning a portion of free cash flow generation to shareholders through its share repurchase program. The company has $144 million of availability under its bank facility and ended the quarter with a net cash position of $26 million.

Growth Drivers and Industry Trends

The company's growth is driven by its strong presence in the utility sector, with a focus on electrical utility transmission spend. NPK International is also seeing growth in midstream, although from a smaller base. The company's product sales were more concentrated with end-user utility companies this year, which is the preferred customer segment. As Greggg Piontek noted, "the growth on the RNS side is coming from the utility sector, with midstream strengthening but coming from a small base."

3. NewsRoom

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Newpark Resources Announces New Brand Identity, Aligning Strategic Focus on Specialty Rental Solutions for the Global Worksite Access Market

Dec -09

Source: businesswire.com

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Newpark Resources, Inc. (NR) Q3 2024 Earnings Call Transcript

Nov -08

Source: seekingalpha.com

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Newpark Resources Announces Third Quarter 2024 Results Conference Call and Webcast Date

Oct -24

Source: businesswire.com

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Earnings Preview: Newpark Resources (NR) Q3 Earnings Expected to Decline

Oct -22

Source: zacks.com

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International ID Day: Thales Stands up for a Legal and Trusted Identity for Everyone

Sep -16

Source: businesswire.com

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SCF Acquires Newpark Fluids Systems

Sep -14

Source: businesswire.com

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Is Newpark Resources (NR) Stock Outpacing Its Oils-Energy Peers This Year?

Aug -09

Source: zacks.com

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Wall Street Analysts Believe Newpark (NR) Could Rally 41.21%: Here's is How to Trade

Aug -08

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.83%)

6. Segments

Fluids Systems

Expected Growth: 1.8%

Newpark Resources' Fluids Systems segment growth of 1.8% is driven by increasing demand for drilling and completion fluids in North America, coupled with the company's expanding presence in international markets. Additionally, the segment benefits from the rising adoption of advanced drilling technologies and the need for environmentally friendly fluids solutions.

Industrial Solutions

Expected Growth: 1.9%

Newpark Resources' Industrial Solutions segment growth of 1.9% is driven by increasing demand for environmental services, expansion in the Permian Basin, and growing adoption of the company's proprietary Dura-Base matting system. Additionally, the segment benefits from a strong backlog of orders and a focus on operational efficiency, which helps to offset raw material cost inflation.

7. Detailed Products

Drilling Fluids

Newpark Resources, Inc. offers a wide range of drilling fluids and additives designed to optimize drilling performance, improve wellbore stability, and reduce costs.

Completion Fluids

Newpark Resources, Inc. provides a variety of completion fluids and additives designed to optimize well completion operations, improve hydrocarbon recovery, and reduce formation damage.

Production Chemicals

Newpark Resources, Inc. offers a range of production chemicals and additives designed to optimize oil and gas production, reduce corrosion, and improve asset integrity.

Wellbore Construction Services

Newpark Resources, Inc. provides wellbore construction services, including directional drilling, logging, and cementing, to optimize wellbore construction operations.

Filtration and Waste Management

Newpark Resources, Inc. offers filtration and waste management solutions designed to minimize environmental impact, reduce waste, and optimize drilling operations.

8. Newpark Resources, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Newpark Resources, Inc. operates in the oil and gas industry, which has a moderate threat of substitutes. While there are alternative energy sources, the demand for oil and gas is still high, and the company's products and services are specialized, making it difficult for substitutes to enter the market.

Bargaining Power Of Customers

Newpark Resources, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are specialized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Newpark Resources, Inc. relies on a few key suppliers for its operations, which gives them some bargaining power. However, the company's size and scale of operations also give it some negotiating power with its suppliers.

Threat Of New Entrants

The oil and gas industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to enter the market and compete with established players like Newpark Resources, Inc.

Intensity Of Rivalry

The oil and gas industry is highly competitive, with many established players competing for market share. Newpark Resources, Inc. operates in a niche segment, but still faces intense competition from other companies offering similar products and services.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 18.20%
Debt Cost 15.35%
Equity Weight 81.80%
Equity Cost 17.82%
WACC 17.37%
Leverage 22.25%

11. Quality Control: Newpark Resources, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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NCS Multistage Holdings

A-Score: 5.3/10

Value: 7.9

Growth: 4.8

Quality: 6.9

Yield: 0.0

Momentum: 10.0

Volatility: 2.3

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Dawson Geophysical

A-Score: 4.5/10

Value: 7.2

Growth: 4.6

Quality: 3.2

Yield: 4.0

Momentum: 8.0

Volatility: 0.0

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Smart Sand

A-Score: 4.5/10

Value: 5.3

Growth: 4.4

Quality: 3.1

Yield: 6.0

Momentum: 4.0

Volatility: 4.0

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Superior Drilling Products

A-Score: 4.3/10

Value: 7.2

Growth: 5.4

Quality: 7.2

Yield: 0.0

Momentum: 5.0

Volatility: 1.0

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Newpark Resources

A-Score: 3.8/10

Value: 5.5

Growth: 1.7

Quality: 5.4

Yield: 0.0

Momentum: 5.0

Volatility: 5.3

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DMC Global

A-Score: 3.4/10

Value: 9.1

Growth: 3.8

Quality: 3.1

Yield: 0.0

Momentum: 1.5

Volatility: 2.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.25$

Current Price

7.25$

Potential

-0.00%

Expected Cash-Flows