As of June 3, 2025, Helmerich and Payne Inc's estimated intrinsic value ranges from $17.22 to $75.50 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $39.33 | +150.7% |
| Discounted Cash Flow (5Y) | $35.00 | +123.1% |
| Dividend Discount Model (Multi-Stage) | $30.92 | +97.1% |
| Dividend Discount Model (Stable) | $17.22 | +9.7% |
| Earnings Power Value | $75.50 | +381.2% |
Is Helmerich and Payne Inc (HP) undervalued or overvalued?
With the current market price at $15.69, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Helmerich and Payne Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.22 | 1.69 |
| Cost of equity | 9.5% | 14.3% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 25.5% | 27.5% |
| Debt/Equity ratio | 1.18 | 1.18 |
| After-tax WACC | 6.0% | 8.3% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $35 | $5,545M | 74.6% |
| 10-Year Growth | $39 | $5,976M | 55.2% |
| 5-Year EBITDA | $16 | $3,617M | 61.0% |
| 10-Year EBITDA | $24 | $4,448M | 39.9% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $666M |
| Discount Rate (WACC) | 8.3% - 6.0% |
| Enterprise Value | $7,978M - $11,165M |
| Net Debt | $2,066M |
| Equity Value | $5,913M - $9,100M |
| Outstanding Shares | 99M |
| Fair Value | $59 - $92 |
| Selected Fair Value | $75.50 |
| Metric | Value |
|---|---|
| Market Capitalization | $1560M |
| Enterprise Value | $3626M |
| Trailing P/E | 7.07 |
| Forward P/E | 4.18 |
| Trailing EV/EBITDA | 3.20 |
| Current Dividend Yield | 886.56% |
| Dividend Growth Rate (5Y) | -10.31% |
| Debt-to-Equity Ratio | 1.18 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $11.80 |
| Discounted Cash Flow (5Y) | 25% | $8.75 |
| Dividend Discount Model (Multi-Stage) | 20% | $6.18 |
| Dividend Discount Model (Stable) | 15% | $2.58 |
| Earnings Power Value | 10% | $7.55 |
| Weighted Average | 100% | $36.86 |
Based on our comprehensive valuation analysis, Helmerich and Payne Inc's weighted average intrinsic value is $36.86, which is approximately 135.0% above the current market price of $15.69.
Key investment considerations:
Given these factors, we believe Helmerich and Payne Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.