WEATHERFORD INTERNATIONAL PLC (NASDAQ:WFRD) – An Undervalued Stock Worth a Closer Look

WEATHERFORD INTERNATIONAL PLC (NASDAQ:WFRD) was identified by our Decent Value stock screener as a potential opportunity for value investors. The company operates in the energy equipment and services sector, providing drilling, evaluation, and production solutions. Despite a mixed growth outlook, WFRD stands out due to its strong profitability, reasonable financial health, and attractive valuation.

Valuation

WFRD’s valuation metrics suggest the stock is trading at a discount compared to both its industry peers and the broader market:

• P/E Ratio: At 6.98, WFRD’s P/E is significantly lower than the industry average of 22.30 and the S&P 500’s 26.25.
• Forward P/E: The forward P/E of 6.41 reinforces the stock’s cheap valuation.
• Price/Free Cash Flow: WFRD is cheaper than 82.5% of its industry peers based on this metric.

These figures indicate that the market may be undervaluing WFRD, making it an interesting candidate for value investors.

Profitability

The company’s profitability metrics are strong, outperforming most competitors:

• Return on Equity (ROE): At 34.76%, WFRD ranks in the top 5% of its industry.
• Return on Invested Capital (ROIC): At 21.38%, this metric is well above the industry average.
• Operating Margin: A solid 17.09%, better than 77.8% of peers.

These results suggest efficient capital allocation and strong operational performance.

Financial Health

While WFRD’s financial health is decent, there are some areas to monitor:

• Debt Levels: A Debt/Equity ratio of 1.17 is on the higher side, though still better than 80.95% of industry peers.
• Liquidity: A Current Ratio of 2.08 indicates no immediate liquidity concerns.
• Altman-Z Score: At 2.18, the company shows limited bankruptcy risk but warrants caution.

Growth

Growth has been sluggish, but there are signs of improvement:

• Revenue Growth: A modest 0.77% year-over-year increase, with expectations of 2.84% annual growth ahead.
• Earnings Outlook: Analysts project a 6.56% annual EPS growth, indicating a potential turnaround.

While past performance has been weak, the acceleration in projected growth could signal better days ahead.

Our Decent Value screener lists more stocks with strong valuations and solid fundamentals.
For a deeper dive, review the full fundamental report on WFRD.

Disclaimer

This is not investment advice. The observations here are based on available data at the time of writing. Always conduct your own research before making investment decisions.