RPC (RES) Margin Compression Challenges Bullish Narratives Despite FY 2025 Q3 Revenue Scale

RPC (RES) has just posted its FY 2025 third quarter scorecard, reporting revenue of $447.1 million and basic EPS of $0.06. This puts fresh numbers on the table after a run of mixed earnings over the past year. The company’s revenue has moved from $364.2 million in FY 2024 Q2 to $337.7 million in Q3 and $335.4 million in Q4, then to $332.9 million, $420.8 million and now $447.1 million through FY 2025. Over the same stretch, quarterly EPS shifted from $0.15 to $0.09, $0.06, $0.06, $0.05 and $0.06. With trailing net margins at 3% compared with 7.9% a year earlier, this latest report arrives in a context where investors are weighing revenue resilience against compressed profitability.

See our full analysis for RPC.

With the headline numbers now on the board, the next step is to set these results against the most widely held narratives around RPC to see which stories the data supports and which ones may be becoming outdated.

Curious how numbers become stories that shape markets? Explore Community Narratives

Margins Tighten With 3% Net Profit

• Over the last 12 months, RPC converted US$1.54b of revenue into US$46.6 million of net income, which works out to a 3% net profit margin compared with 7.9% a year earlier.
• What stands out for the bearish view is that this 3% margin sits alongside trailing 12 month EPS of US$0.22. This contrasts with the earlier five year period where earnings grew 31.3% per year, so critics highlight that the recent earnings soft patch is arriving after a stronger multi year stretch and is now the main weak point they focus on.
  • Bears point to the fall in net income from US$117.1 million to US$46.6 million on a trailing basis as evidence that recent profitability has cooled relative to the prior year.
  • They also flag that quarterly EPS has moved from US$0.15 in FY 2024 Q2 to a range of roughly US$0.05 to US$0.09 over the last six reported quarters, which they see as consistent with the thinner margin profile.

TTM Revenue Holds Above US$1.5b

• Over the latest trailing 12 months, revenue sits at about US$1.54b, with quarterly revenue in FY 2025 stepping through US$332.9 million, US$420.8 million and US$447.1 million. This gives some sense of scale compared with the earlier FY 2024 quarters in the US$335 million to US$364 million range.
• General market opinion often frames RPC as a cyclical oilfield services name tied to activity levels in completion and maintenance work. The revenue pattern here, where trailing revenue eased from US$1.47b to US$1.37b and then moved back up to US$1.54b, gives both sides material to work with, as it shows that while top line is still above US$1.4b, the recent 3% net margin and negative earnings growth over the last year mean that volume alone has not translated into stronger profitability.
  • Supporters can point out that quarterly revenue has grown from FY 2025 Q1 to Q3, rising from US$332.9 million to US$447.1 million, which aligns with the idea that customer activity is still present across the period.
  • Skeptics counter that, despite this, trailing EPS has slipped from US$0.55 to US$0.22 and net profit margin is 3%, so they see the revenue base as less compelling without clearer evidence that it is feeding through to the bottom line.

📊 Read the full RPC Consensus Narrative.

Valuation Signals Versus Fundamentals

• RPC currently trades at US$5.47 with a trailing P/E of 25.5x, compared with a peer average of 28.9x and a US Energy Services industry average of 22.8x. The DCF fair value is given as US$8.97, which is about 39% above the current share price.
• What is interesting for a bullish angle is that supporters can point to this 39% gap between the US$5.47 price and the US$8.97 DCF fair value, as well as the lower P/E than peers. They still need to reconcile that potential valuation upside with the reality that trailing net income is US$46.6 million on US$1.54b of revenue and that earnings over the past year have moved lower from the previous US$117.1 million level, so the tension is between what the valuation models suggest and what the most recent profitability trends actually show.
  • On one hand, the stock is cheaper than the peer group by P/E, which fits the idea that some degree of weakness is already reflected in the price.
  • On the other hand, the margin slide from 7.9% to 3% and the unstable dividend record mean that any bullish case that leans on the DCF fair value has to factor in these recent financial pressures.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on RPC's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

RPC’s thinner 3% net margin, lower trailing EPS of US$0.22, and reduced net income from US$117.1 million highlight pressure on earnings quality.

If that earnings softness gives you pause, use our CTA_SCREENER_STABLE_GROWTH to focus on companies with steadier revenue and profit trends that may offer more consistent performance.

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.

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