On the four Ms, National Energy Services Reu earns 51 for management and 47 for moat. The management score rests on a return on invested capital of 6.1% and a gross margin of 11.0% — figures that describe returns closer to the cost of the capital behind them. Debt sits at 0.36x equity.
Three independent anchors set the price worth paying. Growth is modelled at 9.7% a year, below the 10.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 19.4x. That produces an intrinsic value of $11.05, a 10-CAP price of $20.78 and a payback time price of $25.76, with the value zone set at the highest of the three, $25.76. Today's price of $24.93 sits inside that zone.
The price sits inside the value zone, but the business scores 47 for moat and 51 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $24.93 |
| Market cap | $2.5B |
| P/E ratio | 27.2x |
| Return on invested capital | 6.1% |
| Gross margin | 11.0% |
| Debt to equity | 0.36x |
| Free cash flow yield | 7.8% |
| Growth rate used | 9.7% |
| Growth rate measured | 10.0% |
| Exit multiple assumed | 19.4x |
| Company | Moat | Buy price |
| Tidewater Inc (TDW) | 73 | $87.13 |
| Core Laboratories Inc (CLB) | 40 | $3.41 |
| Weatherford International Pl (WFRD) | 60 | $84.39 |
| NOV Inc. (NOV) | 35 | $20.62 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of National Energy Services Reu rather than accepting ours.