Ranger Energy Services, Inc. (NYSE: RNGR)

Sector: Energy Industry: Oil & Gas Equipment & Services CIK: 0001699039
Market Cap 374.07 Mn
P/B 1.41
P/E 24.77
P/S 0.61
ROIC (Qtr) 3.32
Div Yield % 0.37
Rev 1y % (Qtr) 205.66
Total Debt (Qtr) 30.40 Mn
Debt/Equity (Qtr) 0.11
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About

Ranger Energy Services, Inc., a prominent player in the energy sector, operates under the ticker symbol RNGR on the NASDAQ stock exchange. The company specializes in providing onshore high specification well service rigs, wireline services, and processing solutions, primarily in the United States. Ranger Energy Services is deeply entrenched in the oil and natural gas industry, offering a broad spectrum of services that support exploration, development, and production. The company's operations span across various regions, including the Permian...

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Investment thesis

Bull case

  • Strong operating cash flow of 77.60M provides robust 2.55x coverage of total debt 30.40M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 45.20M provide 4.91x coverage of short-term debt 9.20M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 367.80M provides 12.10x coverage of total debt 30.40M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 77.60M provides exceptional 51.73x coverage of interest expenses 1.50M, showing strong debt service capability.
  • Operating cash flow of 77.60M provides strong 11.94x coverage of stock compensation 6.50M, indicating sustainable incentive practices.

Bear case

  • Operating cash flow of 77.60M barely covers its investment activities of (21.40M), with a coverage ratio of -3.63, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 77.60M provides thin coverage of dividend payments of (5.20M) with a -14.92 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 74.10M relative to inventory of 4M (18.52 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • High depreciation of 43.30M relative to operating cash flow of 77.60M, which is 0.56x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 56.20M represents just -7.81x of debt issuance (7.20M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Oil & Gas Equipment & Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SLB Slb Limited/Nv 59.56 Bn 20.77 2.67 11.64 Bn
2 BKR Baker Hughes Co 59.13 Bn 22.85 2.13 6.09 Bn
3 FTI TechnipFMC plc 28.99 Bn 127.65 1.96 1.34 Bn
4 HAL Halliburton Co 28.83 Bn 22.47 1.30 8.13 Bn
5 WFRD Weatherford International plc 7.39 Bn 17.15 1.50 1.64 Bn
6 NOV NOV Inc. 7.09 Bn 48.90 0.81 2.34 Bn
7 VAL Valaris Ltd 6.32 Bn 15.83 2.61 1.09 Bn
8 KGS Kodiak Gas Services, Inc. 4.56 Bn 91.00 3.58 2.66 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.17 1.17
EV to Cash from Ops. EV/CFO 9.77 -3.30
EV to Debt EV to Debt 14.30 10.99
EV to EBIT EV/EBIT 18.66 4.49
EV to EBITDA EV/EBITDA 6.78 6.54
EV to Free Cash Flow [EV/FCF] EV/FCF 7.91 31.31
EV to Market Cap EV to Market Cap 1.16 1.36
EV to Revenue EV/Rev 0.71 2.02
Price to Book Value [P/B] P/B 1.41 1.73
Price to Earnings [P/E] P/E 24.77 20.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.87 0.42
Dividend Payout Ratio % Div Payout % (Qtr) 33.80 5.49
Dividend per Basic Share Div per Share (Qtr) 0.18 0.26
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 6.97 6.68
Interest Coverage Int. cover (Qtr) 15.33 -10.19
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 36.87 -37.90
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 205.41 1,334.16
Dividend Growth (1y) % Div 1y % (Qtr) -10.00 4.06
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 35.78 -12.71
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 4.89 19.66
EBIT Growth (1y) % EBIT 1y % (Qtr) 31.43 -26.68
EBT Growth (1y) % EBT 1y % (Qtr) 33.54 39.97
EPS Growth (1y) % EPS 1y % (Qtr) 41.67 27.30
FCF Growth (1y) % FCF 1y % (Qtr) 1.08 -867.31
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 73.30 5.49
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.47 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.05 0.10
Cash Ratio Cash Ratio (Qtr) 0.76 0.62
Current Ratio Curr Ratio (Qtr) 2.47 2.25
Debt to Equity Ratio Debt/Equity (Qtr) 0.11 0.88
Interest Cover Ratio Int Coverage (Qtr) 15.33 -10.19
Times Interest Earned Times Interest Earned (Qtr) 15.33 -10.19
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 12.10 16.47
EBIT Margin % EBIT Margin % (Qtr) 4.20 -0.62
EBT Margin % EBT Margin % (Qtr) 3.92 4.39
Gross Margin % Gross Margin % (Qtr) 16.70 30.41
Net Profit Margin % Net Margin % (Qtr) 2.70 2.67