We recently published a list of the 15 NASDAQ Stocks with the Lowest P/E Ratios. In this article, we are going to take a look at where Weatherford International plc (NASDAQ:WFRD) stands against the other NASDAQ stocks.
A Revised U.S. Economic Outlook
At the start of the year, strategists and economists projected the U.S. economy to perform better in 2025 with the U.S. stock market positioned for another year of above-trend growth. Now, economic growth projections are moving slightly to the lower end of the previous forecasts.
Economic forecasting teams from Morgan Stanley, Goldman Sachs, and others revised their 2025 GDP projections lower. Morgan Stanley now projects a 1.5% growth in 2025, and Goldman expects a 1.7% growth.
The year-end targets for the S&P 500 might be too optimistic. If things go the way they are being projected, the S&P 500 will potentially underperform compared to growth in 2024, impacting the NASDAQ 100 index as well. So far in 2025, the S&P 500 has plunged over 3.30% while the NASDAQ 100 index has dropped over 5.50%, as of March 18. The first quarter is about to end and markets are volatile now with the new U.S. administration implementing its tariff policy.
The head of US equity strategy at RBC Capital Markets, Lori Calvasina, pointed out that the U.S. equity market can hold the drop if things go south.
“We have seen the U.S. equity market on a rocky path higher through year-end, and have believed that our 6,600 can absorb a 5-10% drawdown,” Calvasina wrote in a note to clients on March 9. She further added, “risks of a drawdown of more than 10% have admittedly grown, however. If that occurs, we see a ‘growth scare’ of a 14-20% decline from the peak as most likely, which could shift us into our bear case.”
President Donald Trump addressed Congress with potential disturbance to the economy from his tariff policies. In an interview with Fox Business on March 9, President Trump said:
“There is a period of transition because what we’re doing is very big … We’re bringing wealth back to America. That’s a big thing … it takes a little time, but I think it should be great for us.”
An oil and gas crew working on a midstream pipeline, illuminated against a dusk sunlit sky.
Our Methodology
To compile our list of NASDAQ stocks with the lowest P/E ratios, we first compiled a list of 40 NASDAQ listed firms with a forward P/E ratio lower than 10 and a market capitalization greater than $150 million. Then, we shortlisted the 15 stocks with the lowest P/E ratios and ranked them based on the number of hedge fund holders, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Weatherford International plc (NASDAQ:WFRD)
Forward P/E ratio: 6.54
No. of Hedge Fund Holders: 36
Weatherford International plc (NASDAQ:WFRD) is a leading global energy services company. It is focused on providing equipment and services used in the drilling, evaluation, and well construction in the oil and natural gas exploration and production industry. Weatherford’s products are also used in new energy platforms. The company operates through three segments including Drilling and Evaluation (DRE), Well Construction and Completions (WCC), and Production and Intervention (PRI).
In the fiscal year 2024, the company achieved adjusted EBITDA margins exceeding 25%, marking the highest full-year margin in over 15 years. Weatherford International plc (NASDAQ:WFRD) generated $524 million in adjusted FCF, indicating strong cash generation capabilities. In 2024, the company’s international business experienced remarkable growth in the Middle East, North Africa, and Asia regions, growing by 10% on a full-year basis. In the last three years, Weatherford’s Well Services product line has grown over 50%, showing a notable growth vector with low capital intensity.
Rewey Asset Management stated the following regarding Weatherford International plc (NASDAQ:WFRD) in its Q4 2024 investor letter:
“We added shares of Weatherford International plc (NASDAQ:WFRD) in the quarter, a $5.2 billion market cap global provider of oil field services and equipment. We see significant neglect and undervaluation in shares of WFRD, a position that shows a 59.2% upside to our AFV price target of $114 per share, a level that would still be 15.6% below its July 16th, 2024 high of $135.
Weatherford sold off in concert with the broader energy group in 4Q24, as investors fretted about the risks of slowing global oilfield spending in 2025, the potential for more drilling to push down oil prices under a Trump administration and tax loss selling by investors who purchased shares near summer highs. In our view, the current valuation level ignores the significant financial and operational improvement completed since its 2019 restructuring and the strong long-term revenue growth prospects for its globally diversified and technologically leading offerings…” (Click here to read the full text)
Overall WFRD ranks 3rd on our list of the NASDAQ stocks with the lowest P/E ratios. While we acknowledge the potential of WFRD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WFRD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
