Transocean (RIG) AI Stock Analysis

• Market Cap: $5.47B
• Dividend Yield: N/A
• Average Volume (3M): 28.22M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.42
• 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: 34,230,943
• 30 Day Avg. Volume: 28,217,022
• 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: 1.73
• Enterprise Value/Revenue: 2.44
• Enterprise Value/Gross Profit: 4.87
• Enterprise Value/Ebitda: -14.25
• 1Y Price Target: $4.30
• Price Target Upside: -13.48% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: $5.00 ▲(0.60% Upside)

The score is held back primarily by weak profitability and major revenue decline, partly offset by improving cash flow and moderate balance-sheet stability. Technically, the stock shows moderately positive trend/momentum, while valuation remains challenging due to losses (negative P/E). Earnings call commentary adds support via debt reduction and efficiency gains, tempered by contracting and utilization risks.

Positive Factors

Debt Reduction

Meaningful debt paydown lowers refinancing and liquidity risk and cuts annual interest costs (noted ~$87M saved), improving durable cash flow available for operations, capex and strategic fleet optimization. This materially strengthens the company’s financial flexibility over months.

Operational Efficiency

Sustained high revenue efficiency indicates effective utilization and cost control across the fleet, supporting margin resilience even when dayrates vary. Over 2–6 months this operational discipline preserves cash generation and makes rigs more competitive in contract tenders.

Backlog and Contract Wins

New multi-market contracts increase near-term revenue visibility and utilization for high-spec assets, reducing idleness risk and supporting sustained cash flow. Contracted work with major clients demonstrates market credibility and helps stabilize revenues over forthcoming quarters.

Negative Factors

Severe Revenue Decline

A ~75% TTM revenue decline signals structural demand or mix issues that impair fixed-cost absorption and long-term margin recovery. Over the coming months this large contraction constrains profitability rebound, limits reinvestment, and heightens sensitivity to spot market weakness.

Negative Margins and Ongoing Losses

Persistent negative gross margins indicate operations are not covering direct costs, undermining sustainable profits. Even with improving cash flow, ongoing losses erode equity and limit the company’s ability to internally fund capex or fleet modernization, pressuring long-term competitiveness.

Contracting Pace and Idle Rig Risk

A sluggish contracting environment and specific rig idle risk reduce utilization and revenue predictability, increasing fixed-cost burdens. Over the next several months this can compress margins, delay backlog growth, and force spot-market exposure for high-spec assets, weakening cash conversion.

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

Financials are mixed: the income statement is weak with sharp revenue decline and ongoing net losses (Income Statement Score: 45), partially offset by moderate balance-sheet stability (Balance Sheet Score: 55) and improving free cash flow and operating cash generation despite losses (Cash Flow Score: 60).

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: 4.97
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

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 4.97 is above the 20-day moving average (MA) of 4.51, above the 50-day MA of 4.29, and above the 200-day MA of 3.33, indicating a bullish trend. The MACD of 0.21 indicates Negative momentum. The RSI at 73.40 is Negative, neither overbought nor oversold. The STOCH value of 77.22 is Neutral, 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	$4.02B	10.29	17.49%	―	6.81%	-61.94%
HP	73 Outperform	$3.44B	-20.37	-5.87%	3.24%	35.89%	-148.39%
NBR	69 Neutral	$973.27M	6.93	47.77%	―	6.52%	―
BORR	68 Neutral	$1.44B	15.86	7.08%	5.99%	5.83%	-11.86%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
SDRL	62 Neutral	$2.39B	77.05	1.18%	―	-9.31%	-91.57%
RIG	57 Neutral	$5.47B	-1.52	-32.05%	―	16.93%	-335.82%

Transocean Corporate Events

Transocean Expands Offshore Backlog With Brazil and Norway Contracts

Transocean Ltd. reported it has secured a new contract in Brazil and an extension in Norway for two of its offshore drilling rigs, adding approximately $168 million in firm backlog. The Deepwater Mykonos was awarded a 302-day drilling campaign with bp in Brazil, expected to start in the third quarter of 2026 and contribute about $120 million in backlog, while three additional one-well options exercised for the Transocean Enabler in Norway will add roughly 105 days of continuous work, $48 million in backlog, and keep the rig committed through September 2027, bolstering the company’s revenue visibility and utilization in two key offshore markets.

The most recent analyst rating on (RIG) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Transocean stock, see the RIG Stock Forecast page.

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.

The most recent analyst rating on (RIG) stock is a Hold with a $4.00 price target. To see the full list of analyst forecasts on Transocean stock, see the RIG Stock Forecast page.

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.

The most recent analyst rating on (RIG) stock is a Hold with a $4.25 price target. To see the full list of analyst forecasts on Transocean stock, see the RIG Stock Forecast page.