Seadrill Limited (SDRL) AI Stock Analysis

• Market Cap: $1.76B
• Dividend Yield: N/A
• Average Volume (3M): 820.91K
• Price to Earnings (P/E): 5.5
• Beta (1Y): 1.16
• Revenue Growth: -15.60%
• EPS Growth: 32.51%
• Country: US
• Employees: 3,300
• Sector: Energy
• Sector Strength: 55
• Industry: Oil & Gas Drilling
• EPS (TTM): -0.23
• Shares Outstanding: 62,225,300
• 10 Day Avg. Volume: 1,131,158
• 30 Day Avg. Volume: 820,914
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.96
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -11.89
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 0.29
• Enterprise Value/Gross Profit: 5.86
• Enterprise Value/Ebitda: 1.00
• 1Y Price Target: $47.67
• Price Target Upside: 63.48% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 76 Outperform
• Price Target: $31.00 ▲(6.31%Upside)

Seadrill Limited's strong valuation and technical momentum are the primary drivers of its stock score, supported by a solid financial performance. The earnings call highlighted both achievements and challenges, indicating a balanced outlook. The absence of significant corporate events does not affect the score.

Positive Factors

Contract Opportunities

There is a robust pipeline of deepwater project approvals in 2026 and 2027, which would be more than double the project approvals in 2024 and 2025.

Earnings

SDRL reported first quarter revenue of $335 million compared to the estimate of $281 million.

Market Demand

Pricing for 7G drillships has held firm in the mid-to-high $400k/day range, indicating strong market demand.

Negative Factors

Contract Activity

The lack of contract activity so far in the year could be a near-term headwind for Seadrill (SDRL).

Legal Issues

SDRL is involved in a lawsuit with SFL Hercules that resulted in being ordered to pay $48 million.

Operational Challenges

SDRL disclosed a delay in West Polaris beginning planned work in Brazil and the West Tellus being offline for 50 days, which would have a material impact on first quarter results.

Seadrill Limited Business Overview & Revenue Model

Company Description

Seadrill Limited (SDRL) is a leading offshore drilling contractor providing services to the oil and gas industry. The company specializes in the operation of drilling rigs, offering a range of services that include exploration, development, and production of offshore oil and gas fields. Seadrill operates a versatile fleet of drillships, semi-submersibles, and jack-up rigs, serving major oil companies and independent operators worldwide.

How the Company Makes Money

Seadrill Limited generates revenue primarily through the leasing and operation of its offshore drilling rigs to oil and gas exploration and production companies. The company enters into contracts with these companies to provide drilling services, which can be short-term or long-term depending on the project requirements. Revenue is earned based on daily rates charged for the use of its rigs, which vary depending on the rig type, location, and market conditions. Additionally, Seadrill may earn income through partnerships or joint ventures with other companies in the offshore drilling sector, as well as through ancillary services such as well maintenance and management. Key factors affecting Seadrill's earnings include global oil prices, demand for offshore drilling, and operational efficiency.

Seadrill Limited Financial Statement Overview

Summary

Seadrill Limited has demonstrated robust profitability recovery and financial stability with improved margins and a solid equity position. However, challenges in sustaining revenue growth and consistent cash flow conversion highlight areas for improvement.

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.

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.

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.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.34B	1.39B	1.47B	977.00M	840.00M	894.00M
	Gross Profit
285.00M	293.00M	565.00M	277.00M	54.00M	-37.00M
	EBIT
350.00M	412.00M	329.00M	72.00M	-108.00M	-408.00M
	EBITDA
326.00M	562.00M	494.00M	224.00M	-336.00M	-3.69B
	Net Income Common Stockholders
372.00M	446.00M	300.00M	3.67B	-572.00M	-4.43B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
404.00M	478.00M	697.00M	480.00M	375.00M	491.00M
	Total Assets
4.06B	4.16B	4.22B	2.80B	2.90B	3.96B
	Total Debt
618.00M	618.00M	608.00M	518.00M	908.00M	6.09B
	Net Debt
214.00M	140.00M	-89.00M	38.00M	533.00M	5.60B
	Total Liabilities
1.16B	1.24B	1.24B	1.10B	1.34B	7.10B
	Stockholders Equity
2.91B	2.92B	2.98B	1.70B	1.56B	-3.14B
Cash Flow		Free Cash Flow
-147.00M	-69.00M	186.00M	-137.32M	-183.00M	-447.00M
	Operating Cash Flow
32.00M	88.00M	287.00M	8.83M	-154.00M	-420.00M
	Investing Cash Flow
200.00M	226.00M	42.00M	336.42M	37.00M	-32.00M
	Financing Cash Flow
-413.00M	-532.00M	-200.00M	-356.04M	0.00	-163.00M

Seadrill Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDRL, the sentiment is Positive. The current price of 29.16 is above the 20-day moving average (MA) of 24.73, above the 50-day MA of 22.75, and below the 200-day MA of 32.57, indicating a neutral trend. The MACD of 1.19 indicates Negative momentum. The RSI at 73.72 is Negative, neither overbought nor oversold. The STOCH value of 90.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SDRL.

Seadrill Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SDRL	76 Outperform	$1.76B	5.46	12.75%	―	-15.60%	32.51%
HLX	71 Outperform	$1.07B	12.99	5.64%	―	0.34%	―
HP	69 Neutral	$1.79B	8.34	7.57%	5.56%	12.23%	-37.06%
BORR	67 Neutral	$524.09M	11.23	5.17%	3.65%	19.15%	15.37%
RIG	65 Neutral	$2.84B	―	-6.65%	―	24.47%	-55.45%
Sector *	58 Neutral	$7.47B	3.50	-4.45%	10.05%	0.81%	-49.42%

Seadrill Limited Corporate Events

Seadrill Limited Approves Key Proposals at AGM

At the Annual General Meeting of Shareholders held on May 14, 2025, Seadrill Limited addressed several key proposals. The meeting resulted in the approval of setting the number of directors at up to nine, the re-election of several directors, the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm, and the approval of director remuneration and executive compensation policies. Additionally, it was decided that advisory votes on executive compensation will be held annually.

The most recent analyst rating on (SDRL) stock is a Buy with a $73.00 price target. To see the full list of analyst forecasts on Seadrill Limited stock, see the SDRL Stock Forecast page.