FET - Forum Energy Technologies: Valuation Concerns Before The Potential Recovery

2024-05-15 05:46:52 ET

Summary

• Forum Energy Technologies' order book in the Artificial Lift and Downhole segment grew in Q1, indicating a potential recovery in 2H 2024.
• Demand for FET's coiled tubing and drilling capital equipment decreased in international markets due to budget cuts by operators.
• FET's cash flows improved mildly in Q1, but its debt level increased aggressively after the Variperm acquisition, leading to a "sell" rating for the stock.

FET Faces A Downside

I discussed Forum Energy Technologies ( FET ) in the past, and you can read the latest article here , published on December 5, 2023. Over the past several quarters, oilfield services companies like FET benefited from the rise in average footage drilled per rig and longer and more stages in fracking. FET banked on the trend by introducing artificial lift, wireline, and advanced technology-based products. Over the past couple of quarters, it complemented its artificial lift product portfolio following the Variperm acquisition. In Q1, its Artificial Lift and Downhole segment order book swelled, which indicates a strong recovery in 2H 2024....

For further details see: