Patterson-UTI (PTEN): Buy, Sell, or Hold Post Q1 Earnings?

Patterson-UTI has been on fire lately. In the past six months alone, the company’s stock price has rocketed 110%, reaching $12.21 per share. This was partly due to its solid quarterly results, and the performance may have investors wondering how to approach the situation.

Is it too late to buy PTEN? Find out in our full research report, it’s free.

Why Does PTEN Stock Spark Debate?

Operating 135 Tier-1 super-spec rigs that can handle the industry's most demanding drilling projects, Patterson-UTI (NASDAQ:PTEN) provides contract drilling rigs, hydraulic fracturing, and drill bits to oil and gas operators.

Two Positive Attributes:

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. Over the last five years, Patterson-UTI grew its sales at an incredible 38.7% compounded annual growth rate. Its growth surpassed the average energy upstream and integrated energy company and shows its offerings resonate with customers.

2. Economies of Scale Give It Negotiating Leverage with Suppliers

In Energy, scale separates fragile single-asset producers from platform-style businesses that generate revenue across entire basins and infrastructure networks.

Patterson-UTI’s $4.66 billion of revenue in the last year is mid-sized for the industry.

One Reason to be Careful:

Low Gross Margin Reveals Weak Structural Profitability

While energy gross margins can be distorted by commodity prices, hedging, and short-term cost swings, sustained margins across a full cycle reflect a producer’s underlying asset quality, infrastructure position, and cost structure.

Patterson-UTI, which averaged 30.2% gross margin over the last five years, exhibiting bottom-tier unit economics in the sector. It means the company will struggle at higher commodity prices than peers with better gross margins.

Final Judgment

Patterson-UTI’s positive characteristics outweigh the negatives, and after the recent rally, the stock trades at 6.4× forward EV-to-EBITDA (or $12.21 per share). Is now the time to buy despite the apparent froth? See for yourself in our full research report, it’s free.

Stocks We Like Even More Than Patterson-UTI

ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.

Find out which 5 stocks it's flagging for this month - FREE. Get Our Top 5 Growth Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.