Forum Energy Technologies, Inc. (NYSE: FET) has unveiled its first quarter 2025 financial results, presenting a complex picture of segment-specific achievements and hurdles. The Drilling and Completions segment emerged as a standout, with revenue climbing to $115.6 million, a 4.1% increase from the previous quarter. This growth was fueled by rising demand for completions equipment and subsea projects, alongside a 31% jump in segment adjusted EBITDA to $12.0 million, attributed to a favorable revenue mix and higher-margin subsea activities. Orders in this segment also saw a significant 28% rise to $132.1 million, achieving a book-to-bill ratio of 1.14x, up from 0.93x, signaling strong future performance potential.
On the other hand, the Artificial Lift and Downhole segment encountered difficulties, with a 13.5% sequential revenue drop to $77.8 million. Challenges stemmed from delayed international project shipments and a downturn in demand for valve products, particularly within the Valve Solutions line. This segment's orders fell by 21.1% to $68.6 million, and adjusted EBITDA decreased by approximately 30% to $14.0 million, reflecting the segment's current struggles.
Despite these mixed results, Forum Energy Technologies maintained its streak of positive free cash flow before acquisitions, marking the seventh consecutive quarter with $7.2 million generated. The company's focus remains on disciplined capital management, enhancing working capital efficiency, and pursuing strategic initiatives aimed at fostering long-term value. Management has expressed cautious optimism, reiterating full-year free cash flow guidance and forecasting second-quarter adjusted EBITDA to range between $18.0 million and $22.0 million. This outlook is set against a backdrop of macroeconomic uncertainties, including potential tariff shifts and OPEC+ supply dynamics.
Financial analysts at Stonegate Capital Partners have analyzed FET's valuation, employing discounted cash flow and enterprise value/EBITDA comparative analysis. Their findings suggest a valuation range for FET shares between $26.17 and $31.00, with midpoint estimates positioned at $27.84 and $28.98, respectively, offering a glimpse into the company's financial standing and future prospects.
