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Helix Energy Solutions Group (HLX)
NYSE:HLX
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Helix Energy
(NYSE:HLX)
73Outperform
Positive Factors
Market Position
The company is positioned for future growth with potential upside from the UK North Sea, strong offshore wind demand growth, and pricing in Subsea Robotics.
Robotics Segment
Robotics remains strong driven by offshore wind projects that are likely to continue to push up pricing in a very tight vessel market.
Valuation
The stock is trading at 3.5x 2025 EBITDA, which is considered undervalued for a company with significant EBITDA growth from $121MM in 2021 to $303MM in 2024.
Negative Factors
EBITDA Miss
A 3% Q3 EBITDA miss driven by continued weakness in the Shallow Water segment impacted the stock negatively.
Market Conditions
Pricing for well intervention work is expected to largely stall in the medium term due to competition and market conditions.
North Sea Market
Broader market headwinds in the North Sea could weigh on pricing for the Well Enhancer and Seawell next year.
Helix Energy (HLX) vs. S&P 500 (SPY)
Market Cap
$1.27B
Dividend YieldN/A
Average Volume (3M)2.14M
Price to Earnings (P/E)23.5
Beta (1Y)1.15
Revenue Growth5.34%
EPS GrowthN/A
CountryUS
Employees2,313
SectorEnergy
Sector Strength87
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.36
Shares Outstanding150,936,480
10 Day Avg. Volume2,643,373
30 Day Avg. Volume2,137,672
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.96
Price to Cash Flow (P/CF)4.20
P/FCF Ratio4.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.50Price Target Upside72.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Helix Energy Business Overview & Revenue Model
Company DescriptionHelix Energy Solutions Group, Inc. (HLX) is an international offshore energy services company that provides specialty services to the offshore energy industry, with a focus on subsea construction, maintenance, and decommissioning. Operating primarily in the Gulf of Mexico, Brazil, North Sea, Asia Pacific, and West Africa, Helix Energy offers a range of services including well intervention, robotics, and production facilities that support its clients' needs in maintaining and optimizing offshore oil and gas operations.
How the Company Makes MoneyHelix Energy makes money through its diverse range of services in the offshore energy sector. The company's primary revenue streams include well intervention services, which involve enhancing production and extending the life of existing wells, and robotics services, utilizing remotely operated vehicles for inspection, maintenance, and construction support. Additionally, Helix Energy generates income from its production facilities segment, which involves owning and operating offshore assets that support oil and gas production. Significant partnerships with major oil and gas companies also contribute to its revenue, as Helix's services are crucial for maintaining operational efficiency and safety in offshore environments.
Helix Energy Financial Statement Overview
Summary
Helix Energy has shown strong financial performance with revenue growth and a return to profitability. The balance sheet is stable with manageable leverage, and the company has demonstrated robust cash flow generation. While the industry is volatile, Helix's operational efficiency and financial stability position it well for the future.Income Statement
Helix Energy has demonstrated strong revenue growth, with a 5.34% increase in TTM revenue compared to the previous year. The company also improved its profitability metrics significantly, with a gross profit margin of 16.16% and a net profit margin of 4.09% in TTM, reversing the previous year's net loss. EBIT and EBITDA margins also improved, reflecting better operational efficiency. However, the fossil fuel industry remains volatile, which may impact future performance.82
Very Positive
Balance Sheet
The balance sheet shows a healthy equity ratio of 61.11% in TTM, indicating strong financial stability. The debt-to-equity ratio is moderate at 0.42, suggesting manageable leverage levels. Return on equity improved to 3.51% in TTM, recovering from negative figures in previous years. Continued focus on maintaining low leverage and improving equity will be crucial for long-term resilience.75
Positive
Cash Flow
Helix Energy's cash flow statement indicates robust cash flow generation, with a free cash flow growth rate of 31.05% in TTM. The operating cash flow to net income ratio is 3.32, signifying strong cash conversion efficiency. The company has maintained a solid free cash flow to net income ratio of 3.13, highlighting its ability to generate cash above its net income. Efficient capital management remains a strength.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.36B | 1.29B | 873.10M | 674.73M | 733.55M | Gross Profit |
| 219.56M | 200.36M | 50.62M | 15.39M | 79.91M | EBIT |
| 127.44M | 105.93M | -26.14M | -48.06M | -107.23M | EBITDA |
| 253.17M | 192.99M | 87.68M | 94.36M | 164.45M | Net Income Common Stockholders |
| 55.64M | -10.84M | -87.78M | -61.68M | 22.17M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 368.03M | 332.19M | 186.60M | 253.51M | 291.32M | Total Assets |
| 2.60B | 2.56B | 2.39B | 2.33B | 2.50B | Total Debt |
| 661.12M | 540.57M | 469.68M | 410.95M | 502.17M | Net Debt |
| 293.09M | 208.38M | 283.07M | 157.43M | 210.85M | Total Liabilities |
| 1.08B | 1.06B | 872.63M | 678.56M | 757.78M | Stockholders Equity |
| 1.52B | 1.50B | 1.52B | 1.65B | 1.74B |
| Cash Flow | Free Cash Flow | |||
| 162.72M | 132.87M | 17.60M | 131.79M | 78.56M | Operating Cash Flow |
| 186.03M | 152.46M | 51.11M | 140.12M | 98.80M | Investing Cash Flow |
| -22.84M | -18.66M | -138.29M | -8.27M | -19.28M | Financing Cash Flow |
| -125.31M | 25.11M | -44.84M | -96.00M | -52.58M |
Helix Energy Technical Analysis
Negative
8.39
Price Trends
8.29
Positive
9.07
Negative
9.94
Negative
Market Momentum
0.10
Negative
50.66
Neutral
63.58
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLX, the sentiment is Negative. The current price of 8.39 is above the 20-day moving average (MA) of 8.22, above the 50-day MA of 8.29, and below the 200-day MA of 9.94, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 50.66 is Neutral, neither overbought nor oversold. The STOCH value of 63.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HLX.
Helix Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $13.11B | 16.29 | 27.06% | 0.64% | 16.23% | 1403.29% | |
73 Outperform | $1.27B | 23.55 | 3.68% | ― | 5.34% | ― | |
72 Outperform | $2.24B | 12.76 | 16.78% | ― | 33.25% | 83.81% | |
65 Neutral | $2.17B | 14.99 | 21.97% | ― | 9.75% | 50.93% | |
58 Neutral | $9.14B | 5.36 | -7.06% | 7.50% | 0.46% | -64.27% | |
57 Neutral | $249.77M | ― | -36.95% | ― | 10.50% | -493.15% | |
47 Neutral | $48.70M | ― | 73.91% | ― | -9.09% | -15.47% |
* Energy Sector Average
Performance Comparison
HLX
Helix Energy
8.39
-2.56
-23.38%
FTI
TechnipFMC
31.18
5.88
23.24%
FET
Forum Energy Tech
20.30
0.74
3.78%
OII
Oceaneering International
21.60
-1.85
-7.89%
TDW
Tidewater
43.46
-50.34
-53.67%
NINE
Nine Energy Service
1.15
-1.07
-48.20%
Helix Energy Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: 6.88% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance and significant contract wins in 2024, with a positive outlook for 2025. However, challenges in the North Sea market and shallow water abandonment highlighted potential risks. The company's robust balance sheet and strategic contract positioning provide confidence in continued growth, despite certain macroeconomic and geopolitical risks.Highlights
Strong Financial Performance in 2024
Revenues for the fourth quarter were $355 million, with a gross profit of $59 million resulting in a net income of $20 million. Adjusted EBITDA was $72 million for the quarter, and positive operating cash flows were $78 million, resulting in strong free cash flow of $65 million. Full-year revenues were $1.36 billion with a gross profit of $220 million and a net income of $56 million, showing a greater than 10% improvement over the previous year.
Significant Contract Wins
New contracts include a six-month operation in Nigeria, a 400-day contract with Shell in Brazil, and renewals like the Helix Producer One contract extended to June 2026. Also executed two new three-year contracts with Petrobras.
Robust Robotics Performance
Robotics segment operated six vessels during the quarter with high utilization and secured significant trenching contracts, including a 300-day contract commencing in late 2026 on the Horned Sea Free Wind Farm in the UK.
Strong Balance Sheet
Ended the year with cash of $368 million and liquidity of $430 million, with a strong outlook for generating significant free cash flow and minimal debt obligations until 2029.
Positive Outlook for 2025
Revenue guidance for 2025 is set between $1.36 billion and $1.5 billion with improved margins. EBITDA is expected to be between $320 million and $380 million, with strong free cash flow generation.
Lowlights
Challenges in North Sea Market
The North Sea well intervention market is expected to be weaker in 2025 compared to last year due to regulatory challenges and increased taxes delaying planning for 2025.
Softer Market for Shallow Water Abandonment
Shallow water abandonment in the Gulf of Mexico is expected to experience a soft market again in 2025, with reduced cost structures due to a smaller market not materializing as expected in 2024.
Geopolitical and Market Risks
Entering 2025 with macro challenges including an active geopolitical environment, softer rig market, and uncertainty in the U.S. wind farm market due to announced moratoriums.
Company Guidance
During the Helix Energy Solutions Fourth Quarter 2024 Earnings Conference Call, the company provided detailed guidance for 2025, highlighting several key financial metrics. The projected revenue for 2025 is between $1.36 billion and $1.5 billion, with an expected EBITDA range of $320 million to $380 million, driven by term contracts at market rates. Free cash flow is anticipated to be between $175 million and $225 million, influenced by capital spending plans of $70 million to $90 million. Helix aims to allocate at least 25% of its free cash flow to share repurchases, with a possibility to increase if M&A opportunities do not materialize. The company emphasized strong contract coverage in well intervention and robotics, with notable trenching projects extending into 2029. Potential geographic expansion and the robust renewables market were also discussed as areas for growth. The outlook remains positive despite some macroeconomic challenges, such as geopolitical uncertainties and a softer rig market.Helix Energy Corporate Events
Business Operations and StrategyFinancial Disclosures
Helix Energy Reports Strong 2024 Financial Turnaround
Positive
Feb 25, 2025
Helix Energy Solutions Group reported its financial results for the fourth quarter and full year 2024, showing a net income of $20.1 million for the fourth quarter and $55.6 million for the full year, marking a turnaround from a net loss in 2023. The company achieved its highest EBITDA since 2014 and reported strong free cash flow, despite challenges in its Shallow Water Abandonment segment. Helix completed the restructuring of its balance sheet by retiring convertible notes, ending the year with significant cash levels and negative net debt. The company also secured new contracts for its well intervention fleet, ensuring strong contract coverage as it enters 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.