Vallourec (VK) AI Stock Analysis

• Market Cap: €3.88B
• Dividend Yield: 9.03%
• Average Volume (3M): 560.69K
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.75
• Revenue Growth: -15.12%
• EPS Growth: -10.10%
• Country: FR
• Employees: 12,497
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.21
• Shares Outstanding: 234,359,150
• 10 Day Avg. Volume: 699,143
• 30 Day Avg. Volume: 560,692
• PEG Ratio: -0.86
• Price to Book (P/B): 1.50
• Price to Sales (P/S): 0.94
• P/FCF Ratio: 11.77
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €19.80
• Price Target Upside: 19.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: €17.00 ▲(2.35% Upside)

Vallourec's overall stock score reflects a balance of strengths and challenges. The company's strong balance sheet and attractive valuation are significant positives. However, the decline in revenue and negative free cash flow growth are notable concerns. Technical indicators suggest potential short-term weakness, but the stock's reasonable valuation and high dividend yield provide a buffer.

Vallourec Business Overview & Revenue Model

Company Description

Vallourec (VK) is a global leader in premium tubular solutions, primarily serving the energy and industrial sectors. The company specializes in manufacturing seamless steel tubes and provides a wide range of services, including engineering and solutions for oil and gas, power generation, and various industrial applications. Vallourec's core products include OCTG (Oil Country Tubular Goods), line pipes, and mechanical tubes that are utilized in demanding applications where performance and reliability are critical.

How the Company Makes Money

Vallourec generates revenue through the production and sale of its high-quality steel tubular products, with a significant portion of its income derived from the oil and gas sector. The company has established key revenue streams through long-term contracts with major energy companies and operators, ensuring a steady flow of orders. Additionally, Vallourec benefits from partnerships with various stakeholders in the energy industry, which enhances its market position and facilitates access to new projects. The company also engages in research and development to innovate and improve its product offerings, which can lead to higher margins and increased demand. Fluctuations in oil prices and the overall economic climate can significantly impact Vallourec's revenue, as these factors influence the capital expenditure of its clients in the energy sector.

Vallourec Financial Statement Overview

Summary

Vallourec's financial statements present a mixed picture. The company demonstrates operational efficiency and a strong balance sheet, with healthy margins and a manageable debt level. However, the significant decline in revenue and negative free cash flow growth are areas of concern. Continued focus on revenue stabilization and cash flow improvement will be crucial for sustaining financial health.

Income Statement

Vallourec's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is healthy at 29.77%, indicating efficient cost management. However, the net profit margin has decreased to 9.49% from 11.20% in the previous year, reflecting challenges in maintaining profitability. The revenue growth rate is negative at -24.12%, highlighting a significant decline in sales, which is a concern. EBIT and EBITDA margins remain solid, suggesting operational efficiency despite the revenue drop.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.48, indicating manageable leverage. Return on equity is strong at 15.28%, showcasing effective use of equity to generate profits. The equity ratio stands at 43.10%, suggesting a solid equity base relative to total assets. Overall, the balance sheet indicates financial stability with a focus on maintaining a balanced capital structure.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth at -13.08%, which could impact future investments. The operating cash flow to net income ratio is 0.41, indicating moderate cash generation from operations. The free cash flow to net income ratio is 0.70, reflecting a reasonable conversion of profits into cash. While cash flow management is adequate, the negative growth in free cash flow is a potential risk.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.81B	4.03B	5.11B	4.88B	3.44B	3.24B
Gross Profit	1.14B	1.19B	1.59B	1.08B	836.58M	608.13M
EBITDA	962.00M	854.00M	1.17B	104.83M	514.66M	-730.97M
Net Income	362.00M	452.00M	495.91M	-366.38M	39.55M	-1.33B
Balance Sheet
Total Assets	4.83B	5.53B	5.71B	5.36B	4.75B	5.05B
Cash, Cash Equivalents and Short-Term Investments	803.00M	1.10B	899.95M	558.42M	627.32M	1.40B
Total Debt	997.00M	1.17B	1.53B	1.75B	1.44B	3.72B
Total Liabilities	2.67B	2.93B	3.49B	3.67B	2.94B	4.91B
Stockholders Equity	2.08B	2.51B	2.16B	1.64B	1.76B	-187.10M
Cash Flow
Free Cash Flow	378.00M	321.00M	498.26M	-215.66M	-283.47M	-110.96M
Operating Cash Flow	542.00M	488.00M	710.85M	-24.99M	-145.81M	27.28M
Investing Cash Flow	9.40M	71.00M	-129.69M	-162.09M	-29.59M	-128.16M
Financing Cash Flow	-503.59M	-403.00M	-214.82M	90.92M	-603.86M	-216.62M

Vallourec Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 16.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:VK, the sentiment is Positive. The current price of 16.61 is above the 20-day moving average (MA) of 15.93, above the 50-day MA of 15.89, and above the 200-day MA of 15.84, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 60.98 is Neutral, neither overbought nor oversold. The STOCH value of 87.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:VK.

Vallourec Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CBE	74 Outperform	€1.61B	15.36	―	1.39%	10.55%	13.50%
VK	64 Neutral	€3.88B	10.84	16.47%	9.03%	-15.12%	-10.10%
AKE	64 Neutral	€3.74B	17.26	3.56%	7.01%	0.19%	-37.62%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
JCQ	54 Neutral	€376.82M	41.12	1.38%	1.15%	-7.44%	85.42%
NK	52 Neutral	€1.77B	-10.59	-5.29%	6.91%	-7.71%	-451.19%
ERA	46 Neutral	€1.57B	―	-7.36%	2.79%	-6.91%	-222.35%