Frank’s International Q3 Earnings: Is NYSE:FI Cheap at 0.5x Price/Book?

in EARNINGS/INVESTING IDEAS by

Frank’s International N.V. (NYSE:FI) is scheduled to report Q3 earnings results on November 3, 2020.

The company is expected to report earnings of -$0.10/share on revenue of $85.37 million. The consensus earnings per share (EPS) of -$0.10/share is based on a poll of 2 analysts and represents a decline in eps of -15.3% over the same quarter last year, when the company reported earnings of -$0.08/share.

The revenue forecast of $85.37 million based on a poll of 3 analysts implies a year-over-year (YoY) decline in revenue of −39.2%. Last year the company reported $140.4 million in revenue for the quarter.

Expected to report EPS of -$0.10/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $85.37 $140.42 −39.2%
EPS -$0.10 -$0.08 -15.3%

Earnings Call Trends

Historically, management has exceeded analyst expectations 2 out of the last 8 tracked quarters, missed 5 quarters, and met expectations 1 quarters.

What are your expectations from Frank’s International N.V. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.11 -$0.13 -18.2% Missed
Q1, 2020 -$0.04 -$0.04 0.0% Met
Q4, 2019 -$0.05 -$0.06 -28.6% Missed
Q3, 2019 -$0.06 -$0.08 -31.8% Missed
Q2, 2019 -$0.05 -$0.06 -18.9% Missed
Q1, 2019 -$0.07 -$0.13 -78.1% Missed
Q4, 2018 -$0.06 -$0.06 0.0% Met
Q3, 2018 -$0.10 -$0.05 48.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 10.9%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $2.38 $2.64 10.9% Increase
May 11, 2020 $2.14 $2.15 0.5% Increase
February 25, 2020 $3.50 $3.69 5.4% Increase
November 5, 2019 $5.32 $5.20 −2.3% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −5.09, the model suggests that the company is not likely to be an earnings manipulator. A value of −5.09 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

Frank’s International N.V. is currently trading at $1.53/share, down −5.2% for the day. The company is trading at approximately 26.6% of its 52-week high of $5.76/share. The company’s stock price is down −41.9% since the last earnings report and down −9.7% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 40.70 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:FI Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −1.11 and a forward P/E multiple of −4.29.

Frank’s International N.V.’s current share price also implies a price-to-book (P/B) multiple of 0.50. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $1.53
P/E Ratio −1.1x
P/E Ratio (Fwd) −4.3x
PEG Ratio 0.0
Total Debt / Total Capital 7.7%
Levered Free Cash Flow $8.622 million
EV / EBITDA 9.6x

Finbox

Frank’s International N.V. is a small-cap stock with a market capitalization of $366.4 million and a total enterprise value of $204.1 million. The company operates in the Energy sector and the Energy Equipment & Services industry.

Frank’s International N.V. provides various engineered tubular services for the oil and gas exploration and production, and oilfield services companies in the United States, Europe, the Middle East, Africa, Latin America, the Asia Pacific, and internationally. It operates through three segments: Tubular Running Services, Tubulars, and Cementing Equipment. The company provides tubular running services; and specialized equipment, services, and products utilized in the construction, completion, and abandonment of the wellbore in onshore and offshore environments. Its tubular services include the handling and installation of multiple joints of pipe to establish a cased wellbore; and the installation of smaller diameter pipe inside a cased wellbore to provide a conduit for produced oil and gas to reach the surface. The company also designs, manufactures, and sells outside diameter (OD) pipes, connectors, and casing attachments; and provides specialized fabrication and welding services in support of deep water projects, including drilling and production risers, flowlines and pipeline end terminations, and long length tubulars for use as caissons or pilings. In addition, it offers specialty well construction and well intervention services and products; and distributes OD pipes manufactured by third parties. Frank’s International N.V. was founded in 1938 and is headquartered in Den Helder, the Netherlands.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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