Baker Hughes Company

Based on the provided analysis, here is a comprehensive assessment of whether BKR is worth buying.

Technical Analysis BKR is exhibiting powerful bullish momentum, significantly outperforming the market with substantial gains over one and three months. The stock is technically strong, trading near its 52-week high, though this also suggests it could be overbought and may need a period of consolidation before attempting further significant gains.

Fundamental Analysis The company shows solid revenue growth and a sharp improvement in net profit margin, though this was aided by a tax benefit as core operational margins faced slight pressure. Financially, BKR is healthy with low debt and strong interest coverage, providing a stable foundation. However, operational efficiency metrics like return on equity and asset turnover are only moderate, indicating room for improvement.

Valuation & Risk Valuation is attractive based on earnings growth potential, highlighted by a low forward P/E and a very compelling PEG ratio. The primary risks involve its capacity for sharp drawdownsdowns despite a lower-than-market beta, and exposure to industry-specific cycles. Still, the lack of significant short interest is a positive signal for market sentiment.

Recommendation BKR presents a compelling case for investment. Its strong price momentum is supported by reasonable valuation metrics and a sturdy financial foundation. While the stock is near its high and operational efficiency could improve, the attractive growth prospects relative to its price make it a buy candidate. Investors should be aware of the potential for volatility but may find the risk-reward profile favorable for a position.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, here is a 12-month outlook for BKR:

The primary catalyst is the stock's strong bullish momentum and its attractive valuation, particularly the compelling PEG ratio, which suggests significant upside if the company achieves its earnings growth projections. The sturdy financial health, characterized by low debt and strong interest coverage, provides a solid foundation for this growth. Key risks include the stock's current position near 52-week highs, increasing its vulnerability to a pullback or consolidation, alongside inherent exposure to industry cyclicality that could pressure operational margins. Given the positive momentum and fundamentals, a reasonable target price range would be in the mid-to-high $60s, though the lack of a specific analyst target underscores the need for the stock to prove it can sustain its current levels.

Wall Street Consensus

Most Wall Street analysts are optimistic about Baker Hughes Company's 12-month outlook, with consensus target around $62.56, indicating expected upside potential.

Overall, BKR has investment potential but also faces challenges. Here are key factors to weigh before investing.

BKR has delivered exceptionally strong price appreciation over the recent period, significantly outperforming the broader market. Its performance reflects a powerful bullish trend, particularly over the last quarter.

The stock has posted impressive short-term gains, surging 18.87% over one month and 29.42% over three months. This performance notably outpaces the market, as indicated by a substantial 28.82% relative strength, highlighting its recent momentum and investor confidence.

BKR's current price is near its 52-week high of $62.27, indicating the stock is in a technically strong position and potentially overbought in the immediate term. Having recovered substantially from its 52-week low, further upside may require consolidation given its proximity to the peak.

Revenue & Profitability BKR demonstrated solid revenue growth, increasing from $7.01 billion in Q3 to $7.39 billion in Q4. The company's net profit margin improved significantly to 11.9% in Q4 from 8.7% in Q3, primarily driven by a substantial tax benefit that positively impacted net income. However, the gross profit margin declined slightly to 23.7%, indicating some pressure on core operational profitability.

Financial Health The company maintains a conservative debt profile with a low debt-to-equity ratio of 0.38 and strong interest coverage of 15.9x. BKR's cash position appears adequate with a current ratio of 1.36, though the quick ratio of 1.0 suggests limited liquidity buffer excluding inventory. Operating cash flow generation remains healthy, supporting the company's financial stability.

Operational Efficiency BKR's return on equity stands at 4.7%, reflecting moderate efficiency in generating shareholder returns. The asset turnover ratio of 0.18 indicates relatively low efficiency in utilizing assets to generate revenue. The cash conversion cycle of 87 days suggests reasonable working capital management, though there is room for improvement in inventory and receivables turnover.

Based on the available metrics, BKR appears reasonably valued considering its growth prospects. The forward PE of 12.8 is significantly lower than the trailing PE of 22.5, reflecting strong expected earnings growth. This outlook is strongly supported by the low PEG ratio of 0.29, which indicates the stock may be undervalued relative to its earnings growth potential, though the elevated EV/EBITDA of 52.9 warrants attention regarding its enterprise-level valuation.

A direct peer comparison is not possible due to the unavailability of industry average data. However, the forward PE of 12.8 and a PEG ratio well below 1.0 generally signify an attractive valuation profile in most market contexts. The PB ratio of 3.1 provides an additional reference point, but its interpretation is highly dependent on the capital intensity and standard practices within its specific industry.

Volatility Risk: With a beta of 0.859, BKR exhibits slightly lower volatility than the broader market, suggesting the stock is somewhat less sensitive to overall market swings. However, its substantial one-year maximum drawdown of -25.5% highlights a significant potential for capital depreciation during market downturns, indicating that while its day-to-day moves may be muted, it can still experience sharp declines.

Other Risks: The absence of notable short interest suggests that professional investors do not currently perceive a high risk of a near-term price collapse. This lack of negative sentiment is a positive factor, but the stock remains subject to industry-specific risks inherent to its operations, such as capital expenditure cycles within the energy sector.