Helmerich & Payne (HP): Buy, Sell, or Hold Post Q1 Earnings?

Radek Strnad Thu, July 30, 2026 at 12:09 AM PDT 3 min read **

• HP +1.06%

Helmerich & Payne (HP): Buy, Sell, or Hold Post Q1 Earnings? Helmerich & Payne currently trades at $32.70 per share and has shown little upside over the past six months, posting a small loss of 3%. The stock also fell short of the S&P 500's 6.5% gain during that period.

Is now the time to buy HP? Find out in our full research report, it's free.

Why Does Helmerich & Payne Spark Debate?

Operating the largest fleet of super-spec rigs in North America with technology that can drill horizontal wells over two miles long, Helmerich & Payne (NYSE:HP) provides drilling rigs and crews to oil and gas companies that need wells drilled to extract hydrocarbons from underground.

Two Things to Like:

1. Skyrocketing Revenue Shows Strong Momentum

A company's long-term performance can give signals about its business quality. Even a bad business, especially in a cyclical industry, can shine for a year or so, but a top-tier one should exhibit resilience through cycles. Luckily, Helmerich & Payne's sales grew at an incredible 32.2% compounded annual growth rate over the last five years. Its growth beat the average energy upstream and integrated energy company and shows its offerings resonate with customers.

Helmerich & Payne Quarterly Revenue

2. EBITDA Margin Rising, Profits Up

Adjusted EBITDA margin is an important measure of profitability for the sector and accounts for the gross margins and operating costs mentioned previously. Unlike operating margin, it is not distorted by accounting conventions around reserves, drilling costs, and assumptions on commodity consumption from the well or basin. Adjusted EBITDA highlights the economic reality of how much cash the rock produces before the capital structure (debt service) and the drilling budget (capex) are considered.

Helmerich & Payne's EBITDA margin rose by 11 percentage points over the last year, as its sales growth gave it immense operating leverage. Its EBITDA margin for the trailing 12 months was 22.5%.

Helmerich & Payne Trailing 12-Month EBITDA Margin

One Reason to Be Careful:

Low Gross Margin Reveals Weak Structural Profitability

In any given year, energy gross margins are heavily influenced by prices, hedging, and cost inflation, but over a full cycle these gross margins reveal which producers are structurally advantaged through superior "rock" quality, infrastructure access, and cost position.

Helmerich & Payne, which averaged 34.9% gross margin over the last five years, exhibits poor unit economics in the sector. It means the company will struggle more at lower commodity prices than peers with better gross margins.

Helmerich & Payne Trailing 12-Month Gross Margin

Final Judgment

Helmerich & Payne's merits more than compensate for its flaws. With its shares trailing the market in recent months, the stock trades at 31.9× forward P/E (or $32.70 per share). Is now a good time to initiate a position? See for yourself in our comprehensive research report, it's free.

Story Continues

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