Nabors Industries (NBR) has drawn fresh attention after reporting fourth quarter 2025 adjusted profit of US$0.17 per share and fully redeeming its 7.500% Senior Guaranteed Notes due 2028, a move that reshapes its near term debt profile.

The stronger operating contribution from International Drilling and Drilling Solutions, together with the recent debt redemption, comes against a backdrop of firm share price momentum. The 90 day share price return of 55.99% and the 1 year total shareholder return of 82.64% contrast with weaker 3 and 5 year total shareholder returns.

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With the share price up strongly over the past year but the stock trading at what appears to be a steep intrinsic discount, the key question is whether Nabors is still undervalued or if the market is already pricing in future growth.

Most Popular Narrative: 12.2% Overvalued

With Nabors Industries last closing at $79.96 against a most followed fair value estimate of $71.25, the current setup reflects a richer market price than that narrative implies while still leaning on a relatively high discount rate of 10.88%.

The analyst fair value estimate for Nabors Industries has risen from $58.25 to $71.25. This change reflects higher Street price targets in the $60 to $85 range as analysts update their models to incorporate revised assumptions for growth, margins, discount rates and future P/E ratios.

Curious what justifies a higher fair value even as the narrative still flags the shares as overvalued? The answer lies in a mix of upgraded revenue trajectories, fatter margin assumptions and a trimmed discount rate that still sits in double digits. The real twist is how these inputs interact with an unusually high implied future earnings multiple. If you want to see exactly how those moving parts add up, the full narrative lays it out in detail.

Result: Fair Value of $71.25 (OVERVALUED)

However, the story can change quickly if U.S. rig margins remain under pressure or if international reactivations require more capital before earnings catch up.

Another Way To Look At Value

The fair value narrative suggests Nabors Industries is 12.2% overvalued at $79.96 versus a $71.25 fair value, yet the company also screens as trading 66.4% below an estimated intrinsic value based on future cash flows. When two models disagree this sharply, which set of assumptions do you trust more?

To unpack how a future cash flow view can point to such a large gap between price and estimated value, it helps to see how the SWS DCF model treats growth, margins and risk in one place, rather than focusing only on earnings multiples. Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Nabors Industries for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this mix of risks and rewards leaves you on the fence, take a moment to review the key data points yourself and act while the market is still reacting to fresh information. You can do this by weighing up the 2 key rewards and 3 important warning signs

Looking for more investment ideas?

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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.