While growth is established for NYSE:HP, the stock's valuation remains reasonable.

Last update: Sep 27, 2023

Our stock screener has spotted HELMERICH & PAYNE (NYSE:HP) as a growth stock which is not overvalued. NYSE:HP is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

Growth Insights: NYSE:HP

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:HP was assigned a score of 7 for growth:

The Earnings Per Share has grown by an impressive 503.09% over the past year.
HP shows a strong growth in Revenue. In the last year, the Revenue has grown by 60.56%.
HP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 123.05% yearly.
Based on estimates for the next years, HP will show a quite strong growth in Revenue. The Revenue will grow by 10.62% on average per year.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

How do we evaluate the Valuation for NYSE:HP?

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:HP scores a 8 out of 10:

HP is valuated reasonably with a Price/Earnings ratio of 10.84.
Based on the Price/Earnings ratio, HP is valued cheaper than 81.25% of the companies in the same industry.
HP's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.55.
With a Price/Forward Earnings ratio of 11.76, the valuation of HP can be described as very reasonable.
The average S&P500 Price/Forward Earnings ratio is at 18.74. HP is valued slightly cheaper when compared to this.
Based on the Enterprise Value to EBITDA ratio, HP is valued a bit cheaper than 75.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, HP is valued cheaper than 81.25% of the companies in the same industry.
HP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
HP has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as HP's earnings are expected to grow with 239.39% in the coming years.

Deciphering NYSE:HP's Health Rating

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:HP has achieved a 9 out of 10:

HP has an Altman-Z score of 3.60. This indicates that HP is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.60, HP is doing good in the industry, outperforming 78.13% of the companies in the same industry.
HP has a debt to FCF ratio of 1.44. This is a very positive value and a sign of high solvency as it would only need 1.44 years to pay back of all of its debts.
HP's Debt to FCF ratio of 1.44 is amongst the best of the industry. HP outperforms 85.94% of its industry peers.
HP has a Debt/Equity ratio of 0.20. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.20, HP is doing good in the industry, outperforming 60.94% of the companies in the same industry.
A Current Ratio of 2.29 indicates that HP has no problem at all paying its short term obligations.
HP has a Current ratio of 2.29. This is in the better half of the industry: HP outperforms 70.31% of its industry peers.
A Quick Ratio of 2.06 indicates that HP has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.06, HP belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.

How do we evaluate the Profitability for NYSE:HP?

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:HP, the assigned 6 is noteworthy for profitability:

With an excellent Return On Assets value of 9.14%, HP belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
HP has a Return On Equity of 14.65%. This is in the better half of the industry: HP outperforms 73.44% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.35%, HP is in the better half of the industry, outperforming 73.44% of the companies in the same industry.
HP's Profit Margin of 13.95% is amongst the best of the industry. HP outperforms 87.50% of its industry peers.
Looking at the Operating Margin, with a value of 18.00%, HP belongs to the top of the industry, outperforming 84.38% of the companies in the same industry.
Looking at the Gross Margin, with a value of 39.45%, HP is in the better half of the industry, outperforming 79.69% of the companies in the same industry.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of HP

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.