Vallourec (VK) AI Stock Analysis

• Market Cap: €3.63B
• Dividend Yield: 9.67%
• Average Volume (3M): 423.49K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.87
• Revenue Growth: -15.12%
• EPS Growth: -10.10%
• Country: FR
• Employees: 12,497
• Sector: Basic Materials
• Sector Strength: 65
• Industry: Steel
• EPS (TTM): 0.27
• Shares Outstanding: 234,359,150
• 10 Day Avg. Volume: 384,553
• 30 Day Avg. Volume: 423,492
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €19.47
• Price Target Upside: 26.59% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 64 Neutral
• Price Target: €17.00 ▲(10.53% Upside)

Vallourec's overall stock score is primarily influenced by its financial performance and valuation. While the company shows operational efficiency and a strong balance sheet, the decline in revenue and negative cash flow growth are concerns. The stock's low P/E ratio and high dividend yield are positive valuation factors. However, bearish technical indicators suggest potential short-term weakness.

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 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.

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: Negative
• Last Price: 15.38
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 15.38 is below the 20-day moving average (MA) of 15.88, below the 50-day MA of 16.09, and below the 200-day MA of 15.76, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 35.24 is Neutral, neither overbought nor oversold. The STOCH value of 31.91 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
VK	64 Neutral	€3.63B	10.29	16.47%	9.67%	-15.12%	-10.10%
Sector *	61 Neutral	$10.31B	6.18	0.76%	2.94%	3.30%	-36.34%
0IB0	―	€4.71B	22.09	3.56%	―	―	―
0MGV	―	€1.43B	109.28	-7.36%	―	―	―
0NPX	―	€1.87B	49.79	-5.29%	―	―	―
0IN3	―	€435.54M	71.53	0.93%	―	―	―
CBE	72 Outperform	€1.59B	16.61		1.35%	11.99%	20.45%