Transocean (RIG) AI Stock Analysis

• Market Cap: $4.23B
• Dividend Yield: N/A
• Average Volume (3M): 35.20M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.45
• Revenue Growth: 16.93%
• EPS Growth: -335.82%
• Country: US
• Employees: 5,470
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Drilling
• EPS (TTM): 0.06
• Shares Outstanding: 1,101,441,200
• 10 Day Avg. Volume: 29,502,224
• 30 Day Avg. Volume: 35,196,184
• PEG Ratio: 0.12
• Price to Book (P/B): 0.31
• Price to Sales (P/S): 0.90
• P/FCF Ratio: 16.52
• Enterprise Value/Market Cap: 1.85
• Enterprise Value/Revenue: 2.02
• Enterprise Value/Gross Profit: 4.02
• Enterprise Value/Ebitda: -11.77
• 1Y Price Target: $4.20
• Price Target Upside: 9.38% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 0.11
• Revenue Forecast (FY): $3.95B

• Rating: 60 Neutral
• Price Target: $4.00 ▲(4.17% Upside)

Transocean's overall stock score reflects a mix of financial challenges and positive technical momentum. The company's financial performance is hindered by profitability issues, but technical indicators show strong upward momentum. The earnings call provided positive guidance, but valuation concerns due to negative earnings persist. The absence of a dividend yield further impacts the stock's attractiveness.

Positive Factors

Debt Reduction

Significant debt reduction enhances financial stability and reduces interest expenses, improving long-term financial health.

New Contracts

Securing new contracts strengthens backlog and ensures future revenue streams, solidifying market position in offshore drilling.

Operational Efficiency

High operational efficiency indicates effective cost management and maximizes revenue potential, supporting long-term profitability.

Negative Factors

Profitability Issues

Ongoing profitability challenges hinder financial performance, limiting reinvestment capacity and affecting long-term growth prospects.

Slow Contracting Pace

A slow pace of contracting can lead to idle rigs and revenue gaps, impacting financial stability and operational efficiency.

Potential Idle Time for Rigs

Idle rigs can result in lost revenue and increased costs, affecting cash flow and reducing operational efficiency.

Transocean Business Overview & Revenue Model

Company Description

Transocean Ltd., together with its subsidiaries, provides offshore contract drilling services for oil and gas wells worldwide. It contracts its mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. As of February 14, 2022, the company had partial ownership interests in and operated a fleet of 37 mobile offshore drilling units, including 27 ultra-deep water and 10 harsh environment floaters. It serves integrated energy companies, government-owned or government-controlled oil companies, and other independent energy companies. The company was founded in 1926 and is based in Steinhausen, Switzerland.

How the Company Makes Money

Transocean generates revenue primarily through contracts for drilling services offered to oil and gas companies. The company has a diversified revenue model that includes dayrate contracts, which charge clients based on the number of days a rig is in operation, and lump-sum contracts, which provide a fixed price for specific drilling projects. Key revenue streams include long-term contracts with major oil companies, which provide stability to earnings, and spot market contracts that can fluctuate based on demand and supply conditions in the offshore drilling market. Additionally, Transocean benefits from strategic partnerships and collaborations with energy firms, which enhance its market reach and operational capabilities. Factors such as global oil prices, exploration activities, and regulatory changes in the energy sector also significantly impact the company's earnings.

Transocean Financial Statement Overview

Summary

Transocean faces significant financial challenges, particularly in achieving profitability and revenue growth. The income statement reveals operational inefficiencies with a negative gross profit margin and steep net losses. The balance sheet shows moderate stability with manageable leverage levels, but profitability issues persist. Cash flow improvements are a positive sign, but they have not yet translated into profitability.

Income Statement

Transocean's income statement reveals significant challenges, particularly with profitability. The TTM data shows a negative gross profit margin and a steep net loss, indicating operational inefficiencies. Revenue has drastically declined by 74.9% in the TTM period, reflecting a concerning trend. Historical data shows fluctuating revenue growth and persistent net losses, suggesting ongoing struggles in achieving profitability.

Balance Sheet

The balance sheet indicates moderate financial stability. The debt-to-equity ratio is relatively stable, suggesting manageable leverage levels. However, the negative return on equity highlights profitability issues, as the company is not generating returns on shareholder investments. The equity ratio remains healthy, indicating a solid asset base relative to equity.

Cash Flow

Cash flow analysis shows some positive aspects, with a notable 25.8% growth in free cash flow in the TTM period. The operating cash flow to net income ratio is positive, indicating that operations are generating cash despite net losses. However, the free cash flow to net income ratio suggests that cash flow improvements are not yet translating into profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.87B	3.52B	2.83B	2.58B	2.56B	3.15B
Gross Profit	1.94B	1.35B	872.00M	907.00M	871.00M	1.17B
EBITDA	-664.00M	1.14B	732.00M	844.00M	930.00M	1.18B
Net Income	-2.93B	-512.00M	-954.00M	-621.00M	-591.00M	-568.00M
Balance Sheet
Total Assets	16.17B	19.37B	20.25B	20.44B	20.68B	21.80B
Cash, Cash Equivalents and Short-Term Investments	1.25B	560.00M	995.00M	683.00M	976.00M	1.15B
Total Debt	6.22B	7.25B	7.85B	7.82B	7.69B	8.37B
Total Liabilities	8.10B	9.09B	9.84B	9.64B	9.47B	10.37B
Stockholders Equity	8.08B	10.28B	10.41B	10.79B	11.21B	11.43B
Cash Flow
Free Cash Flow	482.00M	193.00M	-263.00M	-269.00M	367.00M	133.00M
Operating Cash Flow	606.00M	447.00M	164.00M	448.00M	575.00M	398.00M
Investing Cash Flow	-74.00M	-151.00M	-423.00M	-757.00M	-233.00M	-257.00M
Financing Cash Flow	-82.00M	-350.00M	263.00M	-112.00M	-490.00M	-930.00M

Transocean Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.84
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RIG, the sentiment is Positive. The current price of 3.84 is below the 20-day moving average (MA) of 4.20, below the 50-day MA of 3.91, and above the 200-day MA of 3.12, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 43.11 is Neutral, neither overbought nor oversold. The STOCH value of 11.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RIG.

Transocean Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VAL	76 Outperform	$3.48B	8.92	17.49%	―	6.81%	-61.94%
HP	73 Outperform	$2.69B	-16.44	-5.87%	3.24%	35.89%	-148.39%
NBR	69 Neutral	$728.93M	5.19	47.77%	―	6.52%	―
BORR	68 Neutral	$1.14B	12.58	7.08%	6.47%	5.83%	-11.86%
SDRL	66 Neutral	$1.87B	60.33	1.18%	―	-9.31%	-91.57%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
RIG	60 Neutral	$4.23B	-1.18	-32.05%	―	16.93%	-335.82%

Transocean Corporate Events

Transocean Secures Major Australian Drillship Contract

Transocean Ltd. has secured a six-well contract in Australia for its Deepwater Skyros drillship, expected to start in the first quarter of 2027. This contract will add approximately $130 million to the company’s backlog and includes options that could extend operations into early 2030, indicating a strong future presence in the Australian market.

Transocean Secures $89 Million in New Contracts

On November 18, 2025, Transocean Ltd. announced contract fixtures for one ultra-deepwater drillship and two harsh environment semisubmersibles, totaling approximately $89 million in firm contract backlog. The contracts include a 90-day option exercised by Petrobras in Brazil, a two-well option in Norway, and a one-well option in Romania, reflecting Transocean’s strong market positioning and potential positive impact on its operational backlog.

Transocean Closes $500M Notes Offering and Tender Offer

On October 15, 2025, Transocean International Limited, a subsidiary of Transocean Ltd., closed an offering of $500 million in 7.875% Senior Priority Guaranteed Notes due 2032, which are fully guaranteed by several Transocean entities. These notes, governed by an indenture with specific covenants, are aimed at limiting additional indebtedness and securing the company’s drilling assets. Concurrently, Transocean Ltd. announced early results of its cash tender offer, initially set at $50 million but increased to $100 million, for its outstanding 7.35% Senior Notes due 2041 and 7.00% Notes due 2028. As of October 14, 2025, a significant portion of these notes was tendered, with the company accepting all valid tenders for the 2041 Notes and a prorated amount for the 2028 Notes. This strategic financial maneuver is expected to optimize Transocean’s debt structure and enhance its financial flexibility.

Transocean Releases Fleet Status Report Highlighting Demand

On October 15, 2025, Transocean released its Fleet Status Report, detailing the status and contract information of its drilling rigs. The report highlights various contracts with major clients like Chevron, Shell, and Petrobras, indicating robust demand for Transocean’s services. This update underscores Transocean’s strong market positioning and its ongoing commitment to maintaining a high level of operational activity, which is crucial for its stakeholders.

Transocean Secures Major Contracts in Gulf and Brazil

Transocean Ltd. announced contract fixtures for two of its ultra-deepwater drillships, totaling approximately $243 million in firm contract backlog. In the U.S. Gulf of America, bp exercised a 365-day option for the Deepwater Atlas, contributing $232 million to the backlog, while in Brazil, Petrobras exercised a 30-day option for the Deepwater Mykonos, adding $11 million. These developments reflect Transocean’s strong positioning in the offshore drilling market and its continued ability to secure substantial contracts with major oil companies.

Transocean Announces $500M Senior Notes Offering

On September 30, 2025, Transocean Ltd. announced a private offering of $500 million in Senior Priority Guaranteed Notes due 2032. The proceeds from this offering will be used to refinance existing debt and fund a tender offer for certain outstanding notes. This financial maneuver aims to optimize the company’s capital structure and improve its financial flexibility.

Transocean Announces Public Offering of 125 Million Shares

On September 24, 2025, Transocean Ltd. entered into an underwriting agreement with Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC for a public offering of 125,000,000 shares at $3.05 per share. The offering, expected to close on September 26, 2025, aims to raise funds for repaying or redeeming indebtedness, including a portion of the $655 million Senior Notes due in 2027, with any remaining proceeds used for general corporate purposes.

Transocean Upsizes Public Offering to Raise $381M

On September 24, 2025, Transocean Ltd. announced the pricing of an upsized public offering of 125,000,000 shares at $3.05 per share, increasing from the initially proposed 100,000,000 shares. The offering, expected to close on September 26, 2025, aims to raise approximately $381.25 million before expenses, with proceeds intended for debt repayment and general corporate purposes. This move could strengthen Transocean’s financial position, impacting its operations and stakeholder interests.

Transocean Announces Major Public Offering of Shares

On September 24, 2025, Transocean Ltd. announced its intention to offer and sell 100,000,000 shares in an underwritten public offering, with a 30-day option for underwriters to purchase an additional 15,000,000 shares. The proceeds are intended for the repayment or redemption of indebtedness, including a portion of the $655 million Senior Notes due February 2027, with any remaining funds used for general corporate purposes. This move is part of Transocean’s strategy to manage its financial obligations and strengthen its market position in the offshore drilling industry.