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Seadrill Limited (SDRL)
NYSE:SDRL
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Seadrill Limited
(NYSE:SDRL)67Neutral
Positive Factors
Contract Backlog
Added $1bn in contract backlog.
Negative Factors
Legal Issues
SDRL is involved in a lawsuit with SFL Hercules that resulted in being ordered to pay $48 million.
Operational Delays
The West Tellus incurred 50 days of downtime during the first quarter of 2025 responding to regulatory matters in Brazil.
Seadrill Limited (SDRL) vs. S&P 500 (SPY)
Market Cap
$1.51B
Dividend YieldN/A
Average Volume (3M)1.16M
Price to Earnings (P/E)3.9
Beta (1Y)1.10
Revenue Growth-7.79%
EPS Growth57.21%
CountryUS
Employees2,505
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)6.38
Shares Outstanding62,163,030
10 Day Avg. Volume1,645,103
30 Day Avg. Volume1,160,276
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$56.00Price Target Upside123.82% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Seadrill Limited Business Overview & Revenue Model
Company DescriptionSeadrill Limited (SDRL) is an offshore drilling contractor providing worldwide services to the oil and gas industry. The company specializes in the operation of semi-submersible rigs, jack-up rigs, and drillships for exploration and production activities. Seadrill's core services include drilling, completion, and maintenance of offshore wells, serving major oil and gas operators globally.
How the Company Makes MoneySeadrill Limited makes money primarily through contracts with major oil and gas companies for the use of its drilling rigs and services. The company secures long-term contracts, often ranging from several months to years, which provide a steady stream of revenue. Key revenue streams include day rates charged for the deployment of various types of drilling units, such as semi-submersibles, drillships, and jack-up rigs. These rates can vary based on the type of rig, location, duration, and market conditions. Additionally, Seadrill may engage in partnerships or joint ventures with other companies in the sector to expand its operational capabilities and market reach. The company's earnings are significantly influenced by factors such as global oil prices, exploration and production expenditures by oil companies, and the overall demand for offshore drilling services.
Seadrill Limited Financial Statement Overview
Summary
Seadrill Limited has shown strong profitability with improved gross and net profit margins. However, challenges persist in sustaining revenue growth and cash flow conversion, requiring efficient management of financial resources.Income Statement
Seadrill Limited has shown impressive recovery and growth in recent years. The gross profit margin improved significantly from a negative margin in earlier years to a healthy 100% in 2024, indicating strong profitability in its operations. The net profit margin for 2024 was 32.2%, demonstrating substantial net income relative to revenue, primarily due to reduced debt and operational improvements. However, revenue decreased slightly by 5.8% from 2023 to 2024, suggesting potential challenges in maintaining top-line growth.75
Positive
Balance Sheet
The debt-to-equity ratio is relatively low at 0.21 in 2024, reflecting a stable capital structure with manageable debt levels. The equity ratio of 70.2% also indicates strong shareholder equity relative to total assets. Return on equity for 2024 was 15.3%, showcasing efficient use of equity to generate profits. However, the company has experienced fluctuations in its equity and total assets over the years, which may pose risks if not managed properly.65
Positive
Cash Flow
Seadrill's free cash flow for 2024 remained stable compared to 2023, with a free cash flow to net income ratio of 0.20, indicating the company is generating adequate cash relative to its net income. The operating cash flow to net income ratio decreased, reflecting a potential area for improvement in converting net income into cash. Positive free cash flow and reduced capital expenditures suggest prudent financial management, although the decline from previous years suggests a need for careful cash flow planning.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.39B | 1.47B | 977.00M | 840.00M | 894.00M | Gross Profit |
| 293.00M | 565.00M | 277.00M | 54.00M | -37.00M | EBIT |
| 412.00M | 329.00M | 72.00M | -108.00M | -408.00M | EBITDA |
| 562.00M | 494.00M | 224.00M | -336.00M | -3.69B | Net Income Common Stockholders |
| 446.00M | 300.00M | 3.67B | -572.00M | -4.43B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 478.00M | 697.00M | 480.00M | 375.00M | 491.00M | Total Assets |
| 4.16B | 4.22B | 2.80B | 2.90B | 3.96B | Total Debt |
| 610.00M | 608.00M | 518.00M | 908.00M | 6.09B | Net Debt |
| 132.00M | -89.00M | 38.00M | 533.00M | 5.60B | Total Liabilities |
| 1.24B | 1.24B | 1.10B | 1.34B | 7.10B | Stockholders Equity |
| 2.92B | 2.98B | 1.70B | 1.56B | -3.14B |
| Cash Flow | Free Cash Flow | |||
| 88.00M | 186.00M | -137.32M | -183.00M | -447.00M | Operating Cash Flow |
| 88.00M | 287.00M | 8.83M | -154.00M | -420.00M | Investing Cash Flow |
| 226.00M | 42.00M | 336.42M | 37.00M | -32.00M | Financing Cash Flow |
| -532.00M | -200.00M | -356.04M | 0.00 | -163.00M |
Seadrill Limited Technical Analysis
Negative
25.02
Price Trends
33.67
Negative
36.29
Negative
41.47
Negative
Market Momentum
-2.98
Positive
27.71
Positive
29.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDRL, the sentiment is Negative. The current price of 25.02 is below the 20-day moving average (MA) of 28.51, below the 50-day MA of 33.67, and below the 200-day MA of 41.47, indicating a bearish trend. The MACD of -2.98 indicates Positive momentum. The RSI at 27.71 is Positive, neither overbought nor oversold. The STOCH value of 29.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SDRL.
Seadrill Limited Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.51B | 3.92 | 15.12% | ― | -7.79% | 57.21% | |
65 Neutral | $2.01B | 13.85 | 21.97% | ― | 9.75% | 50.93% | |
62 Neutral | $559.40M | 6.94 | 8.30% | 11.20% | 38.38% | ― | |
62 Neutral | $2.47B | 7.28 | 17.67% | ― | 32.42% | -56.26% | |
57 Neutral | $8.34B | 5.35 | -5.98% | 7.29% | 0.20% | -69.45% | |
52 Neutral | $2.67B | ― | -4.95% | ― | 24.44% | 53.99% |
* Energy Sector Average
Performance Comparison
SDRL
Seadrill Limited
25.02
-21.93
-46.71%
OII
Oceaneering International
19.95
-0.57
-2.78%
RIG
Transocean
3.04
-2.39
-44.01%
BORR
Borr Drilling
2.41
-4.00
-62.40%
VAL
Valaris
37.39
-31.98
-46.10%
Seadrill Limited Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -9.15% | Next Earnings Date: May 21, 2025
Earnings Call Sentiment Neutral
The call highlights Seadrill Limited's strong share repurchase program, incremental backlog growth, and notable operational achievements while facing regulatory challenges in Brazil, litigation risks with Petrobras, and a softening market. Although significant achievements were noted, the uncertainty in market conditions and regulatory hurdles present challenges for 2025.Highlights
Strong Share Repurchase Program
Seadrill Limited repurchased $100 million of shares in the fourth quarter and reduced its issued share count by 22% since the commencement of the program in September 2023. A total of $792 million has been returned to shareholders.
Incremental Backlog Growth
Seadrill Limited secured approximately 65% of the global backlog awarded to the four largest publicly traded offshore drillers, despite representing only 18% of the drillship fleet.
New Contracts and Revenue Generation
Seadrill Limited announced long-term contract awards in Brazil commencing in 2026, adding $1 billion in backlog, and secured additional work for rigs in the US Gulf and Brazil.
Exceptional Operational Performance
The West Vela achieved drilling ahead of schedule, securing additional work at a strong rate, and the West Jupiter was awarded the 2024 Rig of the Year within the fleet.
Safety Performance Improvement
Seadrill Limited ended 2024 with a total recordable incident frequency rate nearly 20% below the IADC average, with safety performance trending favorably in 2025.
Lowlights
Regulatory Delays in Brazil
The West Telus incurred 50 days of downtime due to regulatory matters, marking the sixth regulatory delay for a drilling rig in Brazil in the last six months.
Litigation and Penalties
Seadrill Limited received notices from Petrobras asserting $213 million in penalties related to the Sete Brazil project, with potential for further assessments.
Market Softness and Uncertainty
The market outlook for 2025 shows softening due to demand deferral and trade rivals offering lower day rates. Drillship marketed utilization has decreased from high nineties in 2023 to mid-eighties.
Operational and Cost Challenges
Fourth-quarter results were adversely impacted by fewer operating days and increased operating expenses, with challenges in vendor issues and adverse weather affecting timelines.
Company Guidance
During the earnings call, Seadrill Limited provided guidance for the fiscal year 2025, projecting total operating revenues between $1.3 billion and $1.36 billion, excluding reimbursable revenues of $35 million. Adjusted EBITDA is expected to range from $320 million to $380 million, with capital expenditures anticipated between $250 million and $300 million. The company highlighted its strong balance sheet, with gross principal debt at $625 million and $505 million in cash, resulting in a net debt position of $120 million. The company also emphasized its recent achievements, including a $3 billion durable contract cover extending through 2028, and a share repurchase program that returned $792 million to shareholders, reducing the issued share count by 22% since September 2023.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.