Vallourec (VK) AI Stock Analysis

• Market Cap: €4.13B
• Dividend Yield: 9.68%
• Average Volume (3M): 560.69K
• Price to Earnings (P/E): 11.5
• Beta (1Y): 0.81
• Revenue Growth: -15.12%
• EPS Growth: -10.10%
• Country: US
• Employees: 12,497
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 0.51
• 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: €18.00
• Price Target Upside: 0.56% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: €19.50 ▲(8.94% Upside)

Vallourec's overall stock score is driven by strong financial performance, particularly in revenue growth and profitability, and attractive valuation metrics. However, technical analysis indicates bearish momentum, which could pose short-term challenges. The high dividend yield adds a positive aspect to the valuation.

Positive Factors

Market leadership in steel tubular solutions

Vallourec's specialist product portfolio and engineering services create durable barriers: high technical entry costs, long project qualification cycles and entrenched customer relationships. That supports repeat long-term contracts and pricing power with major energy and industrial clients.

Improved margins and profitability

Sustained gross margin near 30% and improved net margin indicate stronger operational leverage and pricing discipline. If maintained, these margins support internal reinvestment, stable cash generation and resilience across project cycles over the medium term.

Manageable leverage and strong ROE

A moderate leverage ratio combined with a double-digit ROE suggests efficient capital deployment and financial flexibility. This balance sheet profile supports funding of capex and working capital needs, and provides capacity to absorb cyclical revenue swings without forced asset sales.

Negative Factors

Free cash flow decline and weak cash conversion

Declining FCF growth and OCF-to-net-income below 1.0 show profits are not fully translating to cash. Persistently weak cash conversion limits ability to fund capex, pay-down debt or maintain dividends without external financing, raising medium-term financial risk.

Revenue growth volatility

Large swings in top-line growth highlight sensitivity to market cycles and project timing. Such volatility complicates forecasting, investment planning and margin stability, making multi-quarter earnings visibility and capital allocation decisions more uncertain.

Concentrated exposure to cyclical oil & gas and industrial markets

Heavy reliance on energy and industrial end-markets ties performance to commodity and capex cycles. Downturns in oil & gas investment or industrial activity can depress demand for tubes and services for multiple quarters, pressuring utilization, pricing and margins.

Vallourec Business Overview & Revenue Model

Company Description

Vallourec S.A., through its subsidiaries, provides tubular solutions for the oil and gas, industry, and energy markets in Europe, North America, South America, Asia, and internationally. It operates through Seamless Tubes and Specialty Products segments. The company offers seamless tubes for refineries, petrochemical facilities, and floating liquefied natural gas plants, as well as production, storage, and offloading units; casings; tubings; VAM connections; rigid subsea line pipes, onshore rigid line pipes, and specialized tubes for transportation of oil and gas; and carbon steel and steel alloy tubes, hollow bars, and connections for the processing of industrial fluids, and oil and gas. Its oil and gas market services include assistance in lowering tubes, inspecting connections, and supervising assembly; repair services for its products and thread tubes inventory management, advisory, and training services; tube inspection, maintenance, and repair services; on-site services; preparation for drilling operations; well coordination and supply services based on the drilling programs; integrated solutions for the subsea line pipe market comprising welding, coating, insulation, logistics, and service agreements; tube coating and welding services. The company's power generation market products and services comprise seamless tubes for steam generators. Its industrial market products and services include tubes and hollow bars, as well as circular, square, rectangular, and octagonal sections; tubular solutions for infrastructure construction; tubes and rings to manufacture cranes, construction machinery, agricultural machinery, and hydraulic cylinders; and tubes and axles for automotive manufacturers. The company is also involved in the iron ore production business; and various projects concerning renewable energies. Vallourec S.A. was founded in 1899 and is headquartered in Boulogne-Billancourt, France.

How the Company Makes Money

Vallourec generates revenue primarily through the sale of its steel tubular products, which are used in various applications including oil and gas exploration, power generation, and construction. The company's revenue model is largely based on long-term contracts with major energy companies and industrial clients, ensuring a steady stream of income. Key revenue streams include the sale of seamless and welded tubes, as well as related services such as technical consulting and project management. Additionally, Vallourec benefits from strategic partnerships with industry leaders, facilitating access to new markets and enhancing its product offerings. The company's ability to adapt to market demands and invest in innovative technologies also contributes to its earnings, positioning it favorably within the competitive landscape.

Vallourec Financial Statement Overview

Summary

Vallourec's financial performance shows a strong recovery in revenue and profitability, with a significant revenue growth rate of 44.6% and improved net profit margin of 9.5%. The balance sheet is stable with a manageable debt-to-equity ratio of 0.48 and strong return on equity of 15.3%. However, cash flow volatility and historical fluctuations in revenue growth present potential risks.

Income Statement

Vallourec's income statement shows a strong recovery with a significant revenue growth rate of 44.6% in the TTM period, following a decline in the previous year. The gross profit margin is healthy at 29.8%, and the net profit margin has improved to 9.5%, indicating enhanced profitability. However, the company has experienced fluctuations in revenue growth over the years, which could pose a risk to consistent performance.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.48, showing manageable leverage. The return on equity is strong at 15.3%, indicating efficient use of equity to generate profits. However, the equity ratio is moderate, suggesting a balanced approach between debt and equity financing.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 19.8% in the TTM period, which is a concern. The operating cash flow to net income ratio is 0.41, indicating that cash generation is not fully aligned with net income. The free cash flow to net income ratio is relatively healthy at 0.70, but the volatility in cash flow growth poses a risk.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.83B	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	1.00B	854.00M	1.20B	104.83M	514.66M	-730.97M
Net Income	423.00M	452.00M	495.91M	-366.38M	39.55M	-1.33B
Balance Sheet
Total Assets	4.90B	5.53B	5.71B	5.36B	4.75B	5.05B
Cash, Cash Equivalents and Short-Term Investments	835.00M	1.10B	899.95M	558.42M	627.32M	1.40B
Total Debt	971.00M	1.17B	1.53B	1.75B	1.44B	3.72B
Total Liabilities	2.56B	2.93B	3.49B	3.67B	2.94B	4.91B
Stockholders Equity	2.25B	2.51B	2.16B	1.64B	1.76B	-187.10M
Cash Flow
Free Cash Flow	303.00M	321.00M	498.26M	-215.66M	-283.47M	-110.96M
Operating Cash Flow	470.00M	488.00M	710.85M	-24.99M	-145.81M	27.28M
Investing Cash Flow	37.40M	71.00M	-129.69M	-162.09M	-29.59M	-128.16M
Financing Cash Flow	-518.59M	-403.00M	-214.82M	90.92M	-603.86M	-216.62M

Vallourec Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 17.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 17.9 is above the 20-day moving average (MA) of 17.06, above the 50-day MA of 16.21, and above the 200-day MA of 15.88, indicating a bullish trend. The MACD of 0.49 indicates Negative momentum. The RSI at 64.56 is Neutral, neither overbought nor oversold. The STOCH value of 70.67 is Neutral, 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	€1.75B	16.26	―	1.35%	10.55%	13.50%
VK	66 Neutral	€4.13B	11.52	16.47%	9.68%	-15.12%	-10.10%
JCQ	63 Neutral	€501.14M	54.68	1.38%	0.99%	-7.44%	85.42%
AKE	62 Neutral	€3.84B	26.78	2.27%	7.05%	-2.71%	-57.75%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
ERA	56 Neutral	€2.25B	-23.22	-7.36%	2.83%	-6.91%	-222.35%
NK	56 Neutral	€2.24B	-13.30	-5.29%	6.28%	-7.71%	-451.19%