Long-established in the Oil & Gas industry, SLB (SLB, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 4.31%, juxtaposed with a three-month change of 9.34%. However, fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of SLB.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 6/10
- Growth rank: 1/10
- GF Value rank: 4/10
- Momentum rank: 9/10
Based on the above method, GuruFocus assigned SLB the GF Score of 68 out of 100, which signals poor future outperformance potential.
SLB (SLB, Financial): A Snapshot of Its Business
SLB, formerly known as Schlumberger, is the largest oilfield service firm in the world, with expertise in myriad disciplines, including reservoir performance, well construction, production enhancement, and more recently, digital solutions. It maintains a reputation as one of the industry's leading innovators, which has earned it dominant share in numerous end markets. With a market cap of $82.57 billion and sales of $31.19 billion, the company has an operating margin of 16.03%.
SLB's Growth Prospects
A lack of significant growth is another area where SLB seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -6.3 per year over the past three years, which underperforms worse than 80.19% of 858 companies in the Oil & Gas industry. Stagnating revenues may pose concerns in a fast-evolving market. Lastly, SLB predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Conclusion
Given the company's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. While SLB has a strong history in the Oil & Gas industry, its current financial and growth indicators suggest that it may struggle to maintain its past performance. Investors should consider these factors when making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
