PRECISION DRILLING Corp (PDS)

Price$90.16Cached quoteAs of 2026-09-04 16:23 UTC

AI: Fair-priced

Price checkThe shares look fairly priced because cash value offsets weak current earnings.

At the observed quote, 12.85 million shares imply an equity value near C$1.60 billion after currency conversion, almost exactly June book equity, meaning assets minus liabilities. The price is roughly 11 to 14 times free cash flow—cash left after running and investing in the business—using 2025 and the latest four quarters. That is reasonable, not clearly cheap, because trailing earnings are negative and cash flow reflects payment timing. The valuation requires activity and margins to stabilize, but not a return to 2023’s peak profit.

Big pictureCash generation has endured, but profits still swing sharply with drilling demand.

Operating cash flow stayed positive from 2020 through 2025, ranging from C$139 million to C$501 million, and cash after capital spending was also positive each year. Yet revenue doubled from C$936 million in 2020 to C$1.94 billion in 2023 before easing to C$1.84 billion in 2025; net income moved from losses to C$289 million, then nearly vanished. In 2026’s first half, revenue rose 8% but adjusted operating profit before financing, tax, and equipment wear fell 10%. This shows durable cash generation inside a highly cyclical business.

Business strengthDebt reduction and shrinking share count improve each remaining shareholder’s position.

Debt fell from C$1.17 billion at the end of 2022 to C$697 million by June 2026, leaving C$631 million after cash and more than C$500 million of available cash and borrowing capacity. Shares outstanding dropped about 10% from the end of 2023, so buybacks have more than offset stock-based compensation rather than diluted owners. Precision spent C$76 million on buybacks in 2025 and C$16 million in 2026’s first half, while cutting debt by C$75 million. This discipline strengthens downside protection, although net debt still equals about 39% of equity.

What could change the storyStronger contracted activity could lift margins, while tax and regional costs threaten cash.

Bull case: term-contracted rigs for 2026 increased 33% in Canada and 45% in the United States after April, United States activity reached the low 40s, and a five-year Kuwait award should add an eighth international rig by mid-2027. These developments could spread fixed costs and restore profit. Bear case: second-quarter adjusted operating profit fell 10% despite 11% revenue growth, planned equipment spending of C$265 million absorbs cash, Middle East costs remain elevated, and a disputed tax case carries up to C$155 million of potential liability. Margin recovery is the key test.

AI: News

Mixed second-quarter resultsSales grew, but weaker margins and a quarterly loss exposed the cost of expanding activity.

On July 28, 2026, Precision reported C$453 million of revenue, up 11%, while adjusted operating profit before financing, tax, and equipment wear fell 10% to C$97 million. Higher United States rig reactivation costs and weaker international margins outweighed growth, producing a C$1 million shareholder loss. The New York shares fell 6.6% in the next session. The timing suggests the report mattered, but does not prove it caused the entire move.

Contract coverage expandedMore long-term work improves revenue visibility, though upgrades delay the international benefit.

In the same July 28 update, Precision said its average 2026 term-contracted rig count had risen 33% in Canada and 45% in the United States since late April. It also secured a five-year Kuwait contract for an existing rig, expected to raise the international active count from seven to eight by mid-2027 after recertification and upgrades. This supports future utilization and cash flow, but the delayed start and required spending limit the immediate value.

Tax reassessment disputeA potentially large tax payment could divert cash from debt cuts and share repurchases.

Disclosed with the July 2026 quarter, Canada’s tax agency denied a 2018 deduction and proposed similar treatment for later years. Precision plans to contest the reassessment and recorded no liability, saying its filing position is appropriate. The estimated maximum exposure is C$155 million plus interest, and 50% of assessed amounts must be paid while the dispute proceeds. This is uncertain, but the worst case equals roughly one quarter of June net debt and could slow capital returns.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016
Revenue	$1.84B	$1.90B	$1.94B	$1.62B	$986.8M	$935.8M	$1.54B	$1.54B	$1.32B	$1.00B
Gross profit	$604.1M	$653.6M	$733.3M	$492.6M	$288.7M	$352.3M	$502.4M	$473.9M	$395.1M	—
Gross margin	32.76%	34.36%	37.84%	30.46%	29.26%	37.65%	32.59%	30.75%	29.90%	—
Operating expenses	$1.42B	$1.38B	$122.2M	$181.0M	$95.9M	$311.3M	$407.8M	$672.0M	$926.2M	$661.7M
Operating income	$104.6M	$211.9M	$611.1M	$311.6M	$192.8M	$41.0M	$94.6M	−$198.1M	−$88.1M	−$156.0M
Operating margin	5.68%	11.14%	31.54%	19.27%	19.53%	4.38%	6.14%	−12.85%	−6.67%	−15.55%
EBITDA	$111.7M	$532.1M	$908.7M	$590.6M	$475.1M	$357.3M	$428.2M	$179.0M	$289.7M	$235.7M
EBITDA margin	6.06%	27.97%	46.89%	36.52%	48.14%	38.18%	27.78%	11.61%	21.92%	23.49%
Net income	$3.1M	$111.3M	$289.2M	−$34.3M	−$177.4M	−$120.1M	$6.6M	−$294.3M	−$132.0M	−$155.6M
Net profit margin	0.17%	5.85%	14.93%	−2.12%	−17.98%	−12.84%	0.43%	−19.09%	−9.99%	−15.51%
Basic EPSper basic share	CA$0.14	CA$7.81	CA$21.03	-CA$2.53	-CA$13.32	-CA$8.76	CA$0.46	-CA$20.00	-CA$9.00	-CA$10.60
Diluted EPSper diluted share	CA$0.14	CA$7.81	CA$19.53	-CA$2.53	-CA$13.32	-CA$8.76	CA$0.45	-CA$20.00	-CA$9.00	-CA$10.60

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Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

View holders

Top 20 reported holders of PDS
Holder	Shares held
NATIONAL BANK OF CANADA /FI/	754.97K
FIL Ltd	719.51K
GOLDMAN SACHS GROUP INC	542.65K
Hillsdale Investment Management Inc.	512.75K
AEGIS FINANCIAL CORP	504.06K
BANK OF MONTREAL /CAN/	398.4K
BARCLAYS PLC	353.88K
Encompass Capital Advisors LLC	333.37K
ARROWSTREET CAPITAL, LIMITED PARTNERSHIP	317.81K
DIMENSIONAL FUND ADVISORS LP	316.99K
MACKENZIE FINANCIAL CORP	259.24K
MORGAN STANLEY	239.67K
AMERICAN CENTURY COMPANIES INC	234K
PICTON MAHONEY ASSET MANAGEMENT	225.74K
TWO SIGMA INVESTMENTS, LP	171.32K
Driehaus Capital Management LLC	167.7K
Quadrature Capital Ltd	163.11K
BANK OF AMERICA CORP /DE/	159.92K
ROYAL BANK OF CANADA	139.81K
Hartree Partners, LP	130K

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)0$0.00 disclosed value

No insider transactions transactions were reported in the stored SEC coverage.

Review ownership filings at SEC.gov ↗

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PRECISION DRILLING Corp (PDS)

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