Nabors Industries stock is edging higher today, up about 2% in active trading, even though the fresh quarter again showed a loss at the earnings per share line. The market is reacting less to that headline loss and more to what sat behind it. Adjusted earnings before interest, tax, depreciation and amortization came in at roughly US$222 million with margins above 27%, ahead of management’s own targets. For a stock that has fallen over the past quarter, investors are now weighing that stronger operating engine against the longer term questions on growth and balance sheet pressure.

Is Nabors Industries really a bargain at a reported P/E of 5.6x, or do the one off gains and weak interest cover mean the stock deserves a discount? See how that trade off looks in our valuation analysis for Nabors Industries

Q2 2026 Earnings Summary

• Revenue, Q2 2026 vs. Q2 2025: US$816.9 million vs. US$832.8 million (slight decline year on year)
• Net Loss, Q2 2026 vs. Q2 2025: loss of US$22.3 million vs. loss of US$38.2 million (loss narrowed year on year)
• Basic EPS, Q2 2026 vs. Q2 2025: loss of US$1.56 per share vs. loss of US$2.71 per share (per share loss narrowed year on year)
• Adjusted EBITDA, Q2 2026: approximately US$222 million with a margin above 27% (ahead of company targets and supported by execution at the segment level)

Prefer clean charts over wading through another wall of earnings tables and accounting footnotes? Check Nabors Industries' full visual breakdown, including how its valuation and balance sheet line up after this quarter, in the company report for Nabors Industries.

Nabors Industries: Bull Story Meets Hard Milestones

Bulls argue Nabors Industries is shifting from a cyclical driller into a higher margin, tech enabled international contractor with improving cash generation and deleveraging. Q2 offers some tangible progress on that script. International drilling now produces US$432 million of revenue with a 30.2% EBITDA margin and a rising rig count, which supports the idea of multi year programs and a larger overseas footprint.

The technology angle also shows up in the numbers. Drilling Solutions revenue reached US$111 million with a 36.2% margin and high free cash flow conversion, and Rig Technologies grew sequentially with new TITAN tools and PACE X Ultra rigs earning premium dayrates. On balance sheet repair, management lifted full year EBITDA guidance to a range of US$920 million to US$930 million and continues to reference at least US$100 million of gross debt reduction in 2026. However, free cash flow guidance of US$20 million to US$30 million remains modest.

Compare that improving margin mix and higher value drilling work at Nabors Industries with the sentiment coming out of Wall Street. See the consensus price target analysis for Nabors Industries to gauge whether analysts think this operational story supports the current share price move.

Nabors Industries Bears Still Have Cash Flow Ammo

The core bearish worry around Nabors Industries is that structurally weak profitability and thin free cash flow keep the business highly exposed to cycles, even as EBITDA improves. Q2 puts some dents in that view but does not knock it out. Adjusted EBITDA of about US$222 million with a 27.2% margin and higher contribution from international and tech segments directly challenges the claim of chronically low margins. However, the updated full year free cash flow guide of only US$20 million to US$30 million, after SANAD is expected to consume US$60 million to US$80 million, validates concerns that cash generation lags accounting earnings.

Deleveraging remains on track with at least US$100 million of gross debt reduction targeted for 2026, which chips away at the balance sheet risk. Even so, limited near term cash and no dividend leave the bearish view of a “structural FCF gap” largely unmet this quarter.

After thin free cash flow, heavy interest costs and large one off items, you may want to review our independent risk analysis for Nabors Industries which shows 3 important warning signs

Stay Ahead With Simply Wall St

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.