Vallourec (VK) AI Stock Analysis

• Market Cap: €3.63B
• Dividend Yield: 9.68%
• Average Volume (3M): 560.69K
• Price to Earnings (P/E): 10.1
• Beta (1Y): 0.76
• Revenue Growth: -15.12%
• EPS Growth: -10.10%
• Country: FR
• 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: 15.53% 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: €16.50 ▲(5.91% 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

Revenue Growth

The significant revenue growth rate of 44.6% indicates strong market demand and effective business strategies, enhancing long-term revenue potential.

Profitability

Improved net profit margin reflects operational efficiency and cost management, which can sustain profitability over the long term.

Balance Sheet Health

A manageable debt-to-equity ratio indicates financial stability and the ability to leverage growth opportunities without excessive risk.

Negative Factors

Cash Flow Volatility

Declining free cash flow growth and volatility can hinder investment capacity and financial flexibility, impacting long-term operations.

Revenue Growth Fluctuations

Fluctuating revenue growth can lead to unpredictability in financial performance, challenging consistent strategic planning and investment.

Cash Generation Alignment

Misalignment between cash generation and net income can strain liquidity, affecting the company's ability to fund operations and growth.

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 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	3.83B	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: Negative
• Last Price: 15.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 15.58 is above the 20-day moving average (MA) of 15.57, below the 50-day MA of 15.81, and below the 200-day MA of 15.69, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 47.91 is Neutral, neither overbought nor oversold. The STOCH value of 34.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	€1.73B	15.79	―	1.35%	10.55%	13.50%
VK	66 Neutral	€3.63B	10.13	16.47%	9.68%	-15.12%	-10.10%
AKE	62 Neutral	€3.87B	26.96	2.27%	7.05%	-2.71%	-57.75%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
NK	56 Neutral	€1.96B	-11.80	-5.29%	6.28%	-7.71%	-451.19%
JCQ	54 Neutral	€433.39M	47.29	1.38%	0.99%	-7.44%	85.42%
ERA	46 Neutral	€1.53B	-15.75	-7.36%	2.83%	-6.91%	-222.35%