Oil & Gas Equipment & Services · NASDAQ
Current Price
$68.81
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Baker Hughes Company with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide. It operates through four segments: Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions (DS). The OFS segment offers exploration, drilling, wireline, evaluation, completion, production, and intervention services; and drilling and completions fluids, wireline services, downhole completion tools and systems, wellbore intervention tools and services, pressure pumping systems, oilfield and industrial chemicals, and artificial lift technologies for oil and natural gas, and oilfield service companies. The OFE segment provides subsea and surface wellheads, pressure control and production systems and services, flexible pipe systems for offshore and onshore applications, and life-of-field solutions, including well intervention and decommissioning solutions; and services related to onshore and offshore drilling and production operations. The TPS segment provides equipment and related services for mechanical-drive, compression, and power-generation applications across the oil and gas industry. Its product portfolio includes drivers, compressors, and turnkey solutions; and pumps, valves, and compressed natural gas and small-scale liquefied natural gas solutions. This segment serves upstream, midstream, downstream, onshore, offshore, and industrial customers. The DS segment provides sensor-based process measurements, machine health and condition monitoring, asset strategy and management, control systems, as well as non-destructive testing and inspection, and pipeline integrity solutions. The company was formerly known as Baker Hughes, a GE company and changed its name to Baker Hughes Company in October 2019. Baker Hughes Company is based in Houston, Texas.
ROIC (TTM)
8.3%
ROE (TTM)
16.8%
FCF Yield
3.36%
Based on trailing twelve-month data, BKR shows a free cash flow per share of N/A and a ROIC of 8.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.36% are important context metrics when evaluating BKR's stock valuation relative to peers.
The intrinsic value of BKR depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether BKR is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $68.81. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Baker Hughes Company: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Equipment & Services industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting BKR's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Baker Hughes Company, this means projecting how much free cash flow the Oil & Gas Equipment & Services will produce over the next 5-10 years, then discounting those amounts to today's dollars. BKR's ROIC of 8.3% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For BKR, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
