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Borr Drilling Limited (BORR)
NYSE:BORR
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Borr Drilling
(NYSE:BORR)
Rating:65Neutral
Price Target:
$2.00
▼(-3.85%Downside)
Borr Drilling (BORR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$559.07M
Dividend Yield3.81%
Average Volume (3M)5.75M
Price to Earnings (P/E)10.3
Beta (1Y)1.23
Revenue Growth19.15%
EPS Growth15.37%
CountryUS
Employees2,087
SectorEnergy
Sector Strength55
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)-0.07
Shares Outstanding266,224,850
10 Day Avg. Volume4,902,929
30 Day Avg. Volume5,753,026
Financial Highlights & Ratios
PEG Ratio-0.06
Price to Book (P/B)0.76
Price to Sales (P/S)0.00
P/FCF Ratio-2.70
Enterprise Value/Market Cap4.70
Enterprise Value/Revenue0.71
Enterprise Value/Gross Profit4.48
Enterprise Value/Ebitda1.49
Forecast
1Y Price Target
$2.80Price Target Upside34.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Borr Drilling Business Overview & Revenue Model
Company DescriptionBorr Drilling Limited operates as an offshore drilling contractor to the oil and gas industry worldwide. It owns, contracts, and operates jack-up rigs for operations in shallow-water areas, including the provision of related equipment and work crews to conduct oil and gas drilling and workover operations for exploration and production. The company serves oil and gas exploration and production companies, such as integrated oil companies, state-owned national oil companies, and independent oil and gas companies. As of December 31, 2021, it operated a fleet of 23 jack-up drilling rigs. The company was formerly known as Magni Drilling Limited and changed its name to Borr Drilling Limited in December 2016. Borr Drilling Limited was incorporated in 2016 and is based in Hamilton, Bermuda.
How the Company Makes MoneyBorr Drilling generates revenue primarily through the leasing of its jack-up rigs to oil and gas exploration and production companies. The company enters into contracts with these companies, which typically range from short-term to multi-year agreements, to provide drilling services for their offshore projects. Revenue is recognized based on the day rates specified in these contracts, which can vary depending on factors such as rig specifications, contract duration, and market conditions. Additionally, Borr Drilling may offer ancillary services related to drilling operations, such as mobilization and demobilization of rigs, further contributing to its revenue streams. The company's earnings are significantly influenced by the global demand for oil and gas, as well as the prevailing market rates for offshore drilling services.
Borr Drilling Earnings Call Summary
Earnings Call Date:May 21, 2025
(Q1-2025)
| % Change Since: 29.19%|
Next Earnings Date:Aug 28, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with notable operational achievements and liquidity improvements. However, there were significant financial challenges, including revenue declines and a net loss, which led to the suspension of the dividend. While the company is securing new contracts and expanding operations, the financial setbacks and market uncertainties present considerable challenges.Q1-2025 Updates
Positive Updates
High Technical and Economic Utilization
The company's operational performance remained strong with technical utilization at 99.2% and economic utilization at 97.9% for active rigs.
Safety Awards and Recognition
Several rigs received industry and customer recognition for outstanding safety performance, including awards from Qatar Energies, IADC NORC chapter, and PTT EPs.
Liquidity Improvement
The liquidity position improved with approximately $120 million collected in outstanding receivables from Mexico and additional mobilization fees.
Contract Extensions and New Contracts
Borr Drilling secured nine new contract commitments, adding $221 million to the backlog with an average rate of $141,000 per day.
Increased Operating Rig Count
The operating rig count increased to twenty-two, up from sixteen in the first quarter, indicating a ramp-up in activity.
Negative Updates
Revenue Decline
Total operating revenue declined by $46.5 million quarter over quarter, with day rate revenues decreasing by $22.6 million.
Net Loss for Q1
The company reported a net loss of $16.9 million for the first quarter, a decrease of $43.2 million compared to the net income in the fourth quarter.
Suspension of Dividend
In light of uncertain market conditions, the board decided to suspend the dividend to reinforce the balance sheet.
Reduced Day Rate Revenue
Day rate revenues decreased primarily due to a decrease in the number of operating days for certain rigs.
Variable Charter Revenue Decline
Variable charter revenue decreased by $17.9 million due to the temporary suspension of rigs in Mexico.
Company Guidance
During the Q1 2025 results call, Power Tools Limited provided guidance on several key financial metrics. The company reported a decrease in total operating revenue by $46.5 million quarter-over-quarter, resulting in an adjusted EBITDA of $96.1 million. Despite challenges such as temporary rig suspensions, the operational performance remained strong with technical utilization at 99.2% and economic utilization at 97.9% for active rigs. The company highlighted several safety achievements, including awards for outstanding safety performance. Looking forward, Power Tools Limited expects a ramp-up in activity with the operating rig count increasing to twenty-two, laying a foundation for improved financial performance. Liquidity improved with the collection of $120 million in outstanding receivables and $10 million in mobilization fees, with an additional $35 million received post-quarter. The company is comfortable with the Bloomberg consensus estimate of approximately $460 million for adjusted EBITDA in 2025. However, due to uncertain market conditions, the Board has decided to suspend the dividend to reinforce the balance sheet and focus on long-term value creation.Borr Drilling Financial Statement Overview
Summary
Borr Drilling has demonstrated strong revenue growth and improved profitability metrics, indicating positive operational performance. However, the high leverage and negative free cash flow present significant financial stability risks. Addressing cash flow issues and managing debt levels are crucial for long-term sustainability.Income Statement
Borr Drilling has demonstrated a strong improvement in its revenue growth rate, with a significant increase in total revenue from $771.6 million in 2023 to $1.01 billion in 2024. The gross profit margin improved to 54.8%, indicating better control over costs and a solid performance in generating profit from sales. The net profit margin is at 8.1%, reflecting profitability, although there's room for improvement. The company also saw improvements in EBIT and EBITDA margins, now at 37% and 50% respectively, showcasing operational efficiency.78
Positive
Balance Sheet
The balance sheet shows a relatively high debt-to-equity ratio of 2.13, which suggests a heavy reliance on debt financing, posing potential risks. However, the equity ratio stands at 29%, indicating a moderate level of financial stability. Return on Equity (ROE) is calculated at 8.3%, which, while positive, suggests there is room for better use of equity to generate profits.65
Positive
Cash Flow
Cash flow performance is a concern, with a negative free cash flow of -$332.1 million in 2024, reflecting high capital expenditures. Although operating cash flow improved to $77.3 million, the free cash flow to net income ratio and operating cash flow to net income ratio indicate that there is insufficient cash generated from operations relative to profits. This suggests potential liquidity issues.47
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.01B | 771.60M | 443.80M | 245.30M | 307.50M |
| Gross Profit | 567.30M | 654.20M | 327.30M | 125.70M | 189.60M |
| EBITDA | 505.00M | 361.24M | -2.00M | 29.20M | -96.10M |
| Net Income | 82.10M | 22.10M | -292.80M | -193.00M | -317.60M |
Balance Sheet | |||||
| Total Assets | 3.42B | 3.08B | 3.00B | 3.08B | 3.18B |
| Cash, Cash Equivalents and Short-Term Investments | 61.60M | 102.50M | 108.00M | 34.90M | 19.20M |
| Total Debt | 2.11B | 1.70B | 1.64B | 1.92B | 1.91B |
| Total Liabilities | 2.43B | 2.10B | 2.10B | 2.19B | 2.13B |
| Stockholders Equity | 993.30M | 984.00M | 897.80M | 889.90M | 1.05B |
Cash Flow | |||||
| Free Cash Flow | -332.10M | -164.70M | -20.80M | -77.80M | -97.10M |
| Operating Cash Flow | 77.30M | -50.70M | 62.50M | -58.90M | -54.70M |
| Investing Cash Flow | -409.40M | -104.20M | -82.60M | 40.90M | -119.80M |
| Financing Cash Flow | 292.00M | 139.00M | 92.60M | 44.80M | 65.20M |
Borr Drilling Technical Analysis
Neutral
2.08
Price Trends
1.90
Positive
2.09
Negative
3.10
Negative
Market Momentum
0.04
Negative
55.40
Neutral
80.52
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BORR, the sentiment is Neutral. The current price of 2.08 is above the 20-day moving average (MA) of 2.06, above the 50-day MA of 1.90, and below the 200-day MA of 3.10, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 55.40 is Neutral, neither overbought nor oversold. The STOCH value of 80.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BORR.
Borr Drilling Peers Comparison
Overall Rating
UnderperformOutperform
Sector (75)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $3.52B | 11.88 | 14.66% | ― | 30.82% | -62.91% | |
77 Outperform | $308.61M | 18.25 | 6.77% | ― | 22.64% | 78.46% | |
75 Outperform | €24.38B | 14.64 | 15.38% | 5.60% | 5.38% | 18.55% | |
72 Outperform | $2.15B | 12.16 | 26.17% | ― | 10.04% | 68.14% | |
67 Neutral | $2.53B | ― | -6.65% | ― | 24.47% | -55.45% | |
65 Neutral | $559.07M | 10.34 | 5.17% | 3.81% | 19.15% | 15.37% | |
55 Neutral | $539.44M | ― | -44.00% | ― | -0.94% | -19.18% |
* Energy Sector Average
Performance Comparison
BORR
Borr Drilling
2.08
-4.31
-67.45%
NBR
Nabors Industries
34.67
-40.82
-54.07%
NGS
Natural Gas Services Group
24.70
4.33
21.26%
OII
Oceaneering International
21.73
-3.35
-13.36%
RIG
Transocean
2.89
-2.41
-45.47%
VAL
Valaris
50.56
-26.20
-34.13%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.