Transocean (RIG) AI Stock Analysis

• Market Cap: $2.28B
• Dividend Yield: N/A
• Average Volume (3M): 42.16M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.20
• Revenue Growth: 24.47%
• EPS Growth: -55.45%
• Country: US
• Employees: 5,470
• Sector: Energy
• Sector Strength: 51
• Industry: Oil & Gas Drilling
• EPS (TTM): -0.10
• Shares Outstanding: 883,261,500
• 10 Day Avg. Volume: 47,708,255
• 30 Day Avg. Volume: 42,156,185
• PEG Ratio: 0.12
• Price to Book (P/B): 0.25
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.84
• Enterprise Value/Market Cap: 3.74
• Enterprise Value/Revenue: 0.63
• Enterprise Value/Gross Profit: 3.42
• Enterprise Value/Ebitda: 3.64
• 1Y Price Target: $3.93
• Price Target Upside: 52.33% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 59 Neutral
• Price Target: $3.00 ▲(16.28%Upside)

Transocean's financial performance is currently hampered by ongoing net losses and declining revenues, despite strong gross margins and improved cash flow. Technical analysis shows mixed signals with short-term bullishness but long-term bearish trends. Meanwhile, valuation is challenging due to negative earnings. Positives from the earnings call and new contracts bolster future prospects, but are offset by asset quality concerns and market uncertainties.

Positive Factors

Contract Commitments

Transocean's contract commitments through 1H2026 should be sufficient to mitigate investor concerns about intermittent rig utilization and re-pricing.

Future Contracts

New contracts booked in 2025 will provide increased EBITDA and FCF visibility into the 2027-2030 timeframe, aiding in debt reduction and enabling a shareholder return program.

Rig Demand

Oil companies are looking to secure rigs for projects starting in 2026 as project economics remain favorable, with Brazil, South America, and West Africa as primary drivers of demand.

Negative Factors

Pricing Pressure

Pricing for 7G drillships has held firm in the mid-to-high $400k/d range while rates for drillships with 20k psi BOPs could exceed $500k/d.

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 makes money primarily by leasing its fleet of offshore drilling rigs to major oil and gas companies for exploration and production activities. The company enters into contract agreements with these clients, securing daily rates for the use of its drilling units. Key revenue streams include long-term contracts that provide consistent cash flow and short-term contracts that can capitalize on favorable market conditions. Transocean's earnings are influenced by factors such as the global demand for oil and gas, the availability of competitive drilling units, and the company's ability to maintain high operational efficiency and uptime. Additionally, strategic partnerships and collaborations with major energy companies can enhance Transocean's market position and contribute to its financial performance.

Transocean Financial Statement Overview

Summary

Transocean exhibits strong gross margins and improved cash flow generation. However, persistent net losses and declining revenues highlight profitability issues. The balance sheet is robust with manageable leverage, but low return on equity remains a concern. Continued focus on operational efficiency and revenue growth is necessary to enhance financial health.

Income Statement

The company demonstrates a strong gross profit margin at 57.55% TTM, indicating efficient cost management. However, the net profit margin is negative due to significant losses, with a TTM net income of -$689M, reflecting ongoing profitability challenges. Revenue has decreased in the TTM period compared to the previous year, with a revenue decline of 21.65%. EBIT and EBITDA margins are also negative, suggesting operational inefficiencies.

Balance Sheet

Transocean maintains a moderate debt-to-equity ratio of 0.65, suggesting a stable capital structure. The equity ratio is 53.69%, reflecting a solid equity base relative to assets. However, the return on equity remains negative due to net losses, indicating issues in generating returns from shareholder investments.

Cash Flow

The company shows a positive free cash flow of $328M in the TTM period, a significant improvement from previous periods. The operating cash flow to net income ratio is negative due to losses, but the positive free cash flow indicates better cash management. Free cash flow to net income ratio is not meaningful due to negative net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.67B	3.52B	2.83B	2.58B	2.56B	3.15B
Gross Profit	2.50B	2.79B	2.09B	1.84B	1.81B	2.37B
EBITDA	627.00M	582.00M	501.00M	851.00M	939.00M	1.18B
Net Income	-689.00M	-512.00M	-954.00M	-621.00M	-591.00M	-568.00M
Balance Sheet
Total Assets	19.02B	19.37B	20.25B	20.44B	20.68B	21.80B
Cash, Cash Equivalents and Short-Term Investments	691.00M	941.00M	995.00M	683.00M	976.00M	1.15B
Total Debt	6.65B	7.25B	7.85B	7.35B	7.17B	8.37B
Total Liabilities	8.81B	9.09B	9.84B	9.64B	9.47B	10.37B
Stockholders Equity	10.21B	10.28B	10.41B	10.79B	11.21B	11.43B
Cash Flow
Free Cash Flow	328.00M	193.00M	-263.00M	-269.00M	367.00M	133.00M
Operating Cash Flow	559.00M	447.00M	164.00M	448.00M	575.00M	398.00M
Investing Cash Flow	-168.00M	-151.00M	-423.00M	-757.00M	-233.00M	-257.00M
Financing Cash Flow	-416.00M	-350.00M	263.00M	-112.00M	-490.00M	-930.00M

Transocean Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 2.58 is below the 20-day moving average (MA) of 2.87, below the 50-day MA of 2.60, and below the 200-day MA of 3.49, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 40.71 is Neutral, neither overbought nor oversold. The STOCH value of 1.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RIG.

Transocean Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VAL	78 Outperform	$2.97B	9.83	14.66%	―	30.82%	-62.91%
SDRL	70 Outperform	$1.62B	4.88	12.75%	―	-15.60%	32.51%
HP	69 Neutral	$1.53B	7.02	7.57%	6.49%	12.23%	-37.06%
Sector *	68 Neutral	$14.81B	9.70	6.36%	5.32%	4.12%	-71.24%
RIG	59 Neutral	$2.28B	―	-6.65%	―	24.47%	-55.45%
PTEN	56 Neutral	$2.28B	―	-24.93%	5.41%	5.82%	-481.39%
NBR	51 Neutral	$438.17M	―	-44.00%	―	-0.94%	-19.18%

Transocean Corporate Events

Transocean Announces Bond Exchange for Company Shares

On June 20, 2025, Transocean Ltd. announced that its subsidiary, Transocean International Limited, entered into agreements to exchange approximately $157 million of its 4.0% Senior Guaranteed Exchangeable Bonds for company shares. The transactions, which began on June 20, 2025, are subject to a limit price condition and are expected to close by the end of the trading period, impacting the company’s financial structure and shareholder value.

The most recent analyst rating on (RIG) stock is a Buy with a $5.50 price target. To see the full list of analyst forecasts on Transocean stock, see the RIG Stock Forecast page.

Transocean Secures New Drilling Contract in Norway

Transocean Ltd. announced on June 4, 2025, that a two-well option for the Transocean Spitsbergen in Norway was exercised. This program is set to begin in the first quarter of 2026, directly following the current program, and is expected to add approximately $100 million to the company’s backlog, excluding additional services.

The most recent analyst rating on (RIG) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on Transocean stock, see the RIG Stock Forecast page.

Transocean Plans Rig Disposal Amid Asset Impairment

On June 3, 2025, Transocean Ltd. announced its intention to dispose of certain drilling rigs, anticipating a non-cash charge of $1.1 billion to $1.2 billion in its second quarter results due to asset impairment. At the 2025 Annual General Meeting held on May 30, shareholders approved several proposals, including amendments to the Long-Term Incentive Plan and changes to the Articles of Association, impacting the company’s share capital and governance structure.

The most recent analyst rating on (RIG) stock is a Buy with a $5.50 price target. To see the full list of analyst forecasts on Transocean stock, see the RIG Stock Forecast page.

Transocean Releases April 2025 Fleet Status Report

Transocean has released its Fleet Status Report as of April 16, 2025, detailing the status and contract information for its drilling rigs. The report highlights significant updates in the company’s operations, including firm contracts with major clients like Chevron, Shell, and Petrobras, indicating stable business operations and potential revenue streams for the coming years.