SLB

Based on a comprehensive review, here is an analysis of whether SLB is worth buying.

Technical Analysis SLB shows exceptionally strong bullish momentum, having surged nearly 40% over three months and approaching its 52-week high. While this demonstrates powerful investor sentiment, the stock is near potential resistance levels, suggesting near-term caution for new entries despite the clear upward trend.

Fundamental Analysis Fundamentally, SLB presents a mixed picture. Revenue growth is steady, but profitability has recently softened with a declining net margin. The company maintains a moderate debt level and healthy interest coverage, but operational efficiency is a concern, indicated by a low Return on Equity and a lengthy cash conversion cycle that pressures working capital.

Valuation & Risk Valuation metrics are ambiguous; the reasonable P/E ratio is overshadowed by a negative PEG ratio and a high EV/EBITDA, signaling the market is pricing in future growth that has yet to materialize. Key risks include exposure to volatile oil prices and energy sector cycles, though its low beta and negligible short interest suggest moderate near-term volatility risk.

Investment Recommendation SLB is a HOLD for now, not a buy. The technical rally is impressive but appears overextended near its peak, while fundamentals show profitability pressures and valuation is not compelling without clear earnings growth. Investors should wait for a more attractive entry point or clearer signs of sustained operational improvement before committing new capital. The stock remains a high-quality operator in its sector but is currently priced for perfection.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, the 12-month outlook for SLB is cautiously neutral. Key catalysts remain strong industry sentiment and SLB's position as a high-quality operator, which could drive further gains if oil prices remain supportive. However, significant risks include the stock's technically overextended position, soft profitability metrics, and a valuation that demands future growth not yet evident in its earnings. While a specific target price isn't provided, the outlook suggests a potential trading range, with a pullback toward stronger support levels offering a more attractive entry point than the current price near its 52-week high.

Wall Street Consensus

Most Wall Street analysts are optimistic about SLB's 12-month outlook, with consensus target around $46.97, indicating expected upside potential.

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

Of course, here is the technical analysis of SLB's price performance.

Overall Assessment SLB has demonstrated exceptionally strong bullish momentum over the recent quarter, significantly outperforming the broader market.

Short-term Performance The stock has delivered impressive gains of 13.78% over one month and 38.55% over three months, substantially outperforming its market benchmark by 35.18% in the latter period. This indicates powerful positive momentum that is largely driven by stock-specific factors rather than general market trends, as reflected in its relatively low beta of 0.723.

Current Position Trading at $45.90, SLB is near the top of its 52-week range ($31.11 - $46.39), sitting just 1.1% below its yearly high. While this suggests significant strength, the proximity to the resistance level and a maximum drawdown of -27.48% over the past year indicate the stock may be approaching overbought territory, warranting caution for new entry points.

Revenue & Profitability: SLB's Q3 2025 revenue of $8.93 billion represents a 4.5% sequential increase from Q2, indicating steady top-line growth. However, profitability metrics have softened, with the net profit margin declining from 11.9% in Q2 to 8.3% in Q3, primarily driven by a significant increase in other expenses that impacted pre-tax income. The gross profit margin also compressed slightly to 17.5%.

Financial Health: The company maintains a moderate debt level, with a debt-to-equity ratio of 0.50 and a healthy interest coverage ratio of 9.3, indicating sufficient earnings to service its debt obligations. The cash flow situation shows solid operational generation with an operating cash flow to sales ratio of 18.8%, though the cash flow to debt ratio of 0.13 suggests modest coverage of total debt from operating cash flows.

Operational Efficiency: SLB's operational efficiency shows room for improvement, with a Return on Equity of 2.9% and an asset turnover of 0.16, reflecting relatively low returns on capital employed. The lengthy operating cycle of 157 days, driven by high days sales outstanding (92 days), indicates a lag in converting resources into cash, which pressures working capital efficiency.

Valuation Level Analysis

SLB's current valuation metrics present a mixed picture. The stock appears reasonably valued on a P/E basis, with a trailing multiple of 17.9x closely aligned with its forward P/E of 17.1x. However, the negative PEG ratio of -0.51 is a significant red flag, indicating negative earnings growth expectations which are not captured by the P/E ratios. The EV/EBITDA of 33.9x appears exceptionally high, suggesting the market is pricing in substantial future cash flows, while the P/B of 2.51x and P/S of 1.91x reflect a premium to the company's book value and sales.

Peer Comparison Analysis

A definitive peer comparison cannot be performed as the specific industry average data was not provided. Without these benchmarks for metrics like P/E, P/B, and EV/EBITDA, it is impossible to determine how SLB's valuation stacks up against its direct competitors in the oilfield services sector. Therefore, the analysis remains incomplete, and the valuation conclusion is based solely on an absolute assessment of the provided metrics.

Of course. Here is a risk analysis for SLB based on the provided data.

1. Volatility Risk SLB exhibits moderate volatility risk. Its beta of 0.723 indicates that the stock is generally less volatile than the broader market, typically moving about 72% as much as the market index on average. However, the significant one-year maximum drawdown of -27.48% highlights its exposure to sharp, industry-specific downturns related to oil price volatility and capital expenditure cycles within the energy sector. This suggests that while it may offer some relative stability in normal markets, it remains susceptible to substantial declines during sector-wide downturns.

2. Other Risks The negligible short interest suggests that the market does not have a strong, concentrated bearish outlook on the stock in the near term. While this is a positive sentiment indicator, it does not eliminate other significant risks. SLB still faces considerable operational and financial risks, including exposure to fluctuating global energy prices, changes in exploration and production budgets from its major clients, and potential geopolitical instability in key operational regions. Liquidity risk is likely low given its large market capitalization, but the stock's performance is inherently tied to the highly cyclical nature of the oil and gas industry.