Baker Hughes Company (BKR) Stock Analysis — Fair Value, Risk & Moat Rating
NMS · Energy · Oil & Gas Equipment & Services
Is Baker Hughes Company a safe investment right now?
Baker Hughes Company's Altman Z-Score of 1.5 places it in the distress zone. Our DCF model estimates intrinsic value at $30.21, suggesting the stock is overvalued by 96%. Moat rating: 1.6/5 stars.
Could Baker Hughes Company go bankrupt? Altman Z-Score analysis
Z-Score of 1.5 falls below the 1.8 distress threshold, indicating significant financial stress.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives BKR's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.11 | 1.2 | 0.13 |
| B · Retained Earnings / Total Assets | RE / TA | -0.1522 | 1.4 | -0.21 |
| C · EBIT / Total Assets | EBIT / TA | 0 | 3.3 | 0.0 |
| D · Market Cap / Total Liabilities | MCap / TL | 1.5297 | 0.6 | 0.92 |
| E · Revenue / Total Assets | Rev / TA | 0.6649 | 1.0 | 0.66 |
How has BKR's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2017 | 1.74 | Distress |
| 2018 | 1.07 | Distress |
| 2019 | 1.12 | Distress |
| 2020 | 1.25 | Distress |
| 2021 | 1.48 | Distress |
| 2022 | -0.11 | Distress |
| 2023 | 1.44 | Distress |
| 2024 | 1.4 | Distress |
| 2025 | 1.5 | Distress |
Source: Calculated from BKR's latest 10-K filing on SEC EDGAR.
What could Baker Hughes Company be worth? (High Uncertainty)
Fair value range: $17.45 — $38.08
Valuation Methods Used
| Method | Fair Value | Weight | Detail |
|---|---|---|---|
| Historical PE × Forward EPS | $38.08 | 50% | 13.6x avg PE (2 years) × $2.80 forward EPS |
| DCF (Discounted Cash Flow) | $25.61 | 30% | Two-stage DCF: $1.1B TTM FCF, 9.2% growth, 8.7% WACC |
| EV/FCF Multiple | $17.45 | 20% | TTM FCF × 18x multiple + net cash |
Assumptions & Data Sources
| Parameter | Value | Source |
|---|---|---|
| FCF Growth Rate (Stage 1) | 9.2% | 70% analyst consensus + 30% historical |
| Analyst EPS Growth (This Year) | -8.1% | Consensus (21 analysts) |
| Analyst EPS Growth (Next Year) | 17.2% | Consensus |
| Historical 5Y FCF CAGR | 20.0% | SEC EDGAR |
| Terminal Growth Rate | 2.5% | Long-term GDP proxy |
| Discount Rate (WACC) | 8.7% | CAPM (Rf=4.3% + 0.9*5.5%) |
| Net Cash / (Debt) | $-2,987M | Balance sheet |
| Base FCF (TTM) | $1.1B | Trailing 12 months |
| Shares Outstanding | 991,757,347 | Latest |
Sensitivity Analysis
| Growth Rate | 8% WACC | 10% WACC | 8.7% WACC | 13% WACC |
|---|---|---|---|---|
| 0% | $18.30 | $13.52 | $16.28 | $9.76 |
| 2.5% | $21.18 | $15.54 | $18.79 | $11.10 |
| 5.0% | $24.50 | $17.84 | $21.67 | $12.62 |
| 7.5% | $29.01 | $20.92 | $25.58 | $14.62 |
Free Cash Flow History
| Year | FCF | Growth |
|---|---|---|
| 2017 | $0.7B | — |
| 2018 | $−0.2B | N/A |
| 2019 | $−1.5B | N/A |
| 2020 | $0.8B | N/A |
| 2021 | $0.9B | +15.5% |
| 2022 | $0.3B | +-62.8% |
| 2023 | $1.5B | +360.0% |
| 2024 | $0.9B | +-40.8% |
| 2025 | $1.8B | +104.4% |
Source: FCF data from SEC EDGAR filings. Price via Yahoo Finance.
Does Baker Hughes Company have a durable competitive advantage?
Moat rating: 1.6/5.
What makes up BKR's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 1/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 3/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 1/5.
How stable is BKR's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2017 | -0.8% | — |
| 2018 | 1.0% | Rising |
| 2019 | -0.7% | Declining |
| 2020 | 1.6% | Rising |
| 2021 | 3.9% | Rising |
| 2022 | -61.0% | Declining |
| 2023 | 5.7% | Rising |
| 2024 | 5.0% | Stable |
Source: ROIC calculated from SEC EDGAR filings.
Is Baker Hughes Company's dividend safe?
Can Baker Hughes Company afford its dividend?
Payout ratio is 35.4%. FCF covers the dividend 0.0x. 40 consecutive years of payments.
Baker Hughes Company's key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $25.5B | $21.2B | $20.7B | Rising |
| Net Income | $1.9B | −$0.6B | −$9.9B | Rising |
| Free Cash Flow | $1.8B | $0.9B | $0.3B | Rising |
| Gross Margin | 4.9% | 5.2% | N/A | — |
Common questions about Baker Hughes Company
Is Baker Hughes Company at risk of going bankrupt?
Baker Hughes Company's Altman Z-Score of 1.5 places it in the distress zone. This metric uses balance sheet ratios to predict bankruptcy probability within 2 years. A score below 1.8 signals distress, while above 3.0 indicates safety.
What is Baker Hughes Company's intrinsic value based on DCF?
Our DCF model estimates Baker Hughes Company's intrinsic value at $30.21 per share. The current margin of safety is -95.9%. This estimate is based on historical free cash flow trends and a risk-adjusted discount rate.
Does Baker Hughes Company have a competitive moat?
Baker Hughes Company receives a moat rating of 1.6 out of 5 stars, based on ROIC stability, gross margin trends, and estimated switching costs. A rating above 3.5 suggests a durable competitive advantage.
Is Baker Hughes Company's dividend safe?
Our dividend safety analysis examines payout ratio, free cash flow coverage, and the company's streak of consecutive dividend payments to determine whether the current payout is sustainable.
Before you invest in Baker Hughes Company, make sure you truly understand it.
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 20, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
BKR analysis methodology: How we calculate fair value, Z-Scores, and moat ratings