How Drilling Tools' OneDTI Is Unlocking Value in Challenging Markets

In the cyclical oilfield services sector, execution and integration often determine which companies outperform when activity slows. Drilling Tools International DTI is addressing the near-term downturn by prioritizing disciplined integration rather than broad cost cuts. Its OneDTI program is designed to merge acquired businesses, streamline operations and enhance customer responsiveness. By focusing on efficiency, asset visibility and standardized processes, the company aims to protect margins and strengthen its competitive positioning even as pricing pressure and rig volatility persist in the U.S. market.

OneDTI centers on centralizing systems, processes and reporting across divisions. Through its Compass platform, the company is improving asset tracking, customer engagement and utilization — critical advantages in the rental tools segment. A clear example of execution is the relocation of its Drill-N-Ream repair facility to Houston, completed well ahead of schedule. The move has enhanced access to skilled labor, suppliers and logistics infrastructure, lowering costs and boosting margins during a period of fluctuating demand and tightening industry budgets.

The program is also driving international growth. Eastern Hemisphere revenues climbed 41% year over year in third-quarter 2025, generating $9.1 million in EBITDA and expanding the region’s contribution to overall sales. Management is integrating global operations onto a unified accounting platform by early 2026, improving transparency and scalability. Strong free cash flow has supported debt reduction and share repurchases.

With centralized operations, a growing global footprint and disciplined capital allocation, the company is positioning itself to emerge stronger when industry conditions recover.

Competitive Edge: How DTI Stacks Up Against the Competition

Oil States International OIS is pursuing growth through acquisitions and technology expansion across offshore, subsea and completion markets. However, integration has been more gradual, and margin performance has remained uneven amid offshore exposure and cost variability. Oil States is working to improve efficiency, streamline operations and strengthen its balance sheet. Its long-term outlook depends on accelerating synergy realization and enhancing returns as offshore investment gradually improves.

KLX Energy Services KLXE has adopted an aggressive consolidation strategy in U.S. shale basins, expanding across coiled tubing, wireline and pressure control services. This broad portfolio has increased operational complexity, while elevated debt and restructuring efforts have weighed on cash flow. KLX Energy’s management is focused on reducing leverage and improving cost discipline. Successful integration and stronger free cash generation will be critical to positioning the company for sustained performance through the next upcycle.

DTI’s Price Performance, Valuation and Surprise History

Shares of DTI have outperformed the sector in the past year, as seen in the chart below.

DTI is undervalued with a low price-to-sales ratio of 0.87, below the sector average. With strong performance and a Zacks Value Score of B, it is a stock to watch for potential growth.

DTI’s earnings history shows a mixed performance, with the metric beating the Zacks Consensus Estimate in two of the past four quarters and missing in the other two, resulting in an average surprise of 50%. The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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