Education
About Us
Working with TipRanks
Follow Us
Seadrill Limited (SDRL)
NYSE:SDRL
Top Page
Seadrill Limited
(NYSE:SDRL)
Select Model
Select Model
Rating:57Neutral
Price Target:
$35.00
▼(-0.77% Downside)
The score is driven primarily by weaker TTM profitability and especially weak/negative free cash flow despite a healthier balance sheet. Technicals provide moderate support with an overall uptrend and neutral momentum, while valuation is a headwind due to the high P/E. The earnings call adds a positive offset from growing backlog and constructive 2026–2027 outlook, tempered by near-term operational and pricing challenges.
Positive Factors
Backlog Growth / Contract Wins
A $2.5B contracted backlog with $300M of recent awards provides multi-month revenue visibility, supporting utilization planning and near-term cash flow. Durable contracted coverage reduces exposure to spot-dayrate volatility and aids capital allocation over 2026–2027.
Balance Sheet Strength
Manageable leverage and sizable positive equity give Seadrill financial flexibility to fund upgrades, absorb cyclical downturns, and negotiate with counterparties. A healthier capital structure lowers refinancing risk and supports strategic investments without immediate equity raises.
Technology & Rig Capability Upgrades
Investments in MPD systems and rig upgrades enhance technical capabilities and differentiate Seadrill in complex wells. Improved techno-operational capability supports higher uptime, access to premium programs, and long-term competitiveness in deepwater and harsh-environment contracts.
Negative Factors
Weak Cash Generation
Persistently weak operating cash flow and negative free cash flow constrain Seadrill’s ability to self-fund capex, pay down debt, or return capital. This elevates reliance on external financing and limits flexibility to withstand prolonged pricing or utilization downturns.
Revenue Decline & Margin Compression
Material revenue declines and sharply compressed margins erode profitability and return measures. Lower margins reduce the buffer against cyclical shocks, weaken equity returns, and make it harder to cover fixed rig operating costs, pressuring long-term earnings sustainability.
Competitive Dayrate Pressure
Sustained weakness in regional day rates undermines Seadrill’s pricing power and revenue per rig. Persistent pricing pressure can prolong idle time, depress utilization economics, and force concessions on contract terms, impairing margin recovery even as market tendering improves.
Seadrill Limited (SDRL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.09B
Dividend YieldN/A
Average Volume (3M)749.13K
Price to Earnings (P/E)70.6
Beta (1Y)1.14
Revenue Growth-9.31%
EPS Growth-91.57%
CountryUS
Employees3,300
SectorEnergy
Sector Strength52
IndustryOil & Gas Drilling
Share Statistics
EPS (TTM)-0.17
Shares Outstanding62,374,172
10 Day Avg. Volume690,537
30 Day Avg. Volume749,130
Financial Highlights & Ratios
PEG Ratio0.11
Price to Book (P/B)0.91
Price to Sales (P/S)1.91
P/FCF Ratio-38.37
Enterprise Value/Market Cap0.10
Enterprise Value/Revenue0.16
Enterprise Value/Gross Profit1.06
Enterprise Value/Ebitda0.87
Forecast
1Y Price Target
$43.60Price Target Upside23.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)1.15
Revenue Forecast (FY)$1.42B
Seadrill Limited Business Overview & Revenue Model
Company DescriptionSeadrill Limited provides offshore contract drilling services to the oil and gas industry worldwide. It operates in three segments: Harsh Environment, Floaters, and Jack-ups Rigs. The company owns and operates drillships, semi-submersible rigs, and jack-up rigs for operations in shallow and ultra-deep-water in benign and harsh environments. It offers operation support and management services to third parties, as well as related and non-related companies. As of April 8, 2022, the company owned a fleet of 21 offshore drilling units consisting of two harsh-environment rigs, two benign-environment semi-submersible rigs, six drill-ships, and 11 jack-up rigs. It serves oil super-majors, state-owned national oil companies, and independent oil and gas companies. Seadrill Limited was incorporated in 2005 and is headquartered in London, the United Kingdom.
How the Company Makes MoneySeadrill generates revenue primarily through the provision of drilling services under long-term contracts with major oil and gas companies. The company's revenue model is largely based on day-rate contracts, where clients pay a fixed daily rate for the use of its drilling rigs and associated services. Key revenue streams include drilling contracts, project management services, and ancillary services such as maintenance and logistical support. Significant partnerships with major industry players, along with strategic alliances in various regions, enhance Seadrill's market presence and contribute to its earnings. Additionally, the company's focus on maintaining a modern and efficient fleet helps optimize operational costs and improve profitability.
Seadrill Limited Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. Seadrill demonstrated strong operational performance and secured multiple new contracts, contributing to a significant backlog. However, challenges such as decreased revenues, technical downtime, and competitive pricing pressures in certain markets were also highlighted. The overall market outlook remains positive, with an anticipated recovery in the coming years.Q3-2025 Updates
Positive Updates
Increased Backlog and Contract Wins
Seadrill added over $300 million to its backlog, bringing the total contracted backlog to approximately $2.5 billion, securing new contracts across 5 rigs.
Strong Performance in Angola
The Sonadrill joint venture in Angola secured new work for all 3 rigs, including a 525-day program for the Sonangol Libongos and a 210-day program for the Sonangol Quenguela, reaffirming Seadrill's position as the #1 drillship operator in Angola.
Operational Excellence in the U.S. Gulf
Seadrill's rigs in the U.S. Gulf, including the West Vela and Sevan Louisiana, secured new contracts and demonstrated high operational performance, with the West Vela achieving near-perfect technical uptime in excess of 99.7%.
Technological Advancements
The West Neptune commenced operations with a new Managed Pressure Drilling (MPD) system, and the Sevan Louisiana is being upgraded to enhance its capabilities, showcasing Seadrill's commitment to incorporating advanced technologies.
Positive Market Outlook
Seadrill sees constructive contracting momentum and an uptick in global tendering activity, supporting a broad-based market recovery moving into 2026 and 2027.
Negative Updates
Decreased Operating Revenues and EBITDA
Total operating revenues for the third quarter were $363 million, a sequential decrease of $14 million, and adjusted EBITDA was $86 million, a decrease of $20 million from the prior quarter.
Technical Downtime in Brazil
One of Seadrill's rigs in Brazil experienced operational downtime due to a design-related equipment failure, impacting economic utilization for the quarter.
Competitive Pricing Pressure
Seadrill acknowledges potential softness in day rates in certain regions such as West Africa and Brazil, indicating a competitive market environment.
Idle Rig Concerns
The West Capella remains idle, and there are potential gaps in contracts for rigs like the Carina, indicating challenges in securing continuous work.
Company Guidance
During Seadrill's Third Quarter 2025 Earnings Conference Call, the company provided updated guidance for the fiscal year. The call highlighted Seadrill's strategy to build backlog coverage through 2026, with recent contract awards adding over $300 million to its backlog, bringing the total contracted backlog to approximately $2.5 billion. The company emphasized its operational excellence, with three of its rigs in the Sonadrill joint venture achieving technical uptime in excess of 99.7%. Financially, Seadrill reported third quarter operating revenues of $363 million and adjusted EBITDA of $86 million. They narrowed their full-year adjusted EBITDA guidance to a range of $330 million to $360 million, with expected operating revenues of $1.36 billion to $1.39 billion, excluding $50 million of reimbursable revenues. Capital expenditure guidance for the year was refined to $280 million to $300 million, with expectations for reduced capital expenditure in 2026. The company remains optimistic about the market outlook, anticipating increased contracted utilization and day rate progression from 2026 into 2027.Seadrill Limited Financial Statement Overview
Summary
Seadrill Limited has shown strong profitability with a significant improvement in gross and net profit margins. 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 | 1.35B | 1.39B | 1.47B | 936.00M | 907.00M | 961.00M |
| Gross Profit | 199.00M | 293.00M | 565.00M | 281.00M | -38.00M | -323.00M |
| EBITDA | 242.00M | 562.00M | 494.00M | 224.00M | -336.00M | -3.71B |
| Net Income | 34.00M | 446.00M | 300.00M | 3.91B | -587.00M | -4.66B |
Balance Sheet | ||||||
| Total Assets | 4.07B | 4.16B | 4.22B | 2.80B | 3.90B | 3.96B |
| Cash, Cash Equivalents and Short-Term Investments | 402.00M | 478.00M | 697.00M | 480.00M | 293.00M | 491.00M |
| Total Debt | 612.00M | 618.00M | 610.00M | 518.00M | 908.00M | 6.09B |
| Total Liabilities | 1.20B | 1.24B | 1.24B | 1.10B | 7.61B | 7.10B |
| Stockholders Equity | 2.87B | 2.92B | 2.98B | 1.70B | -3.72B | -3.14B |
Cash Flow | ||||||
| Free Cash Flow | -38.00M | -69.00M | 186.00M | -140.00M | -183.00M | -447.00M |
| Operating Cash Flow | 19.00M | 88.00M | 287.00M | 9.00M | -154.00M | -420.00M |
| Investing Cash Flow | -84.00M | 226.00M | 42.00M | 343.00M | 37.00M | -32.00M |
| Financing Cash Flow | -101.00M | -532.00M | -200.00M | -363.00M | 0.00 | -163.00M |
Seadrill Limited Technical Analysis
Positive
35.27
Price Trends
31.87
Positive
31.67
Positive
28.67
Positive
Market Momentum
0.90
Negative
59.88
Neutral
46.83
Neutral
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 35.27 is above the 20-day moving average (MA) of 33.28, above the 50-day MA of 31.87, and above the 200-day MA of 28.67, indicating a bullish trend. The MACD of 0.90 indicates Negative momentum. The RSI at 59.88 is Neutral, neither overbought nor oversold. The STOCH value of 46.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SDRL.
Seadrill Limited Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $3.67B | 9.59 | 17.49% | ― | 6.81% | -61.94% | |
73 Outperform | $3.01B | -18.80 | -5.87% | 3.24% | 35.89% | -148.39% | |
68 Neutral | $1.28B | 14.85 | 7.08% | 5.99% | 5.83% | -11.86% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
58 Neutral | $2.56B | -20.28 | -4.00% | 5.42% | -16.59% | 83.95% | |
57 Neutral | $2.09B | 70.62 | 1.18% | ― | -9.31% | -91.57% | |
57 Neutral | $4.70B | -1.32 | -32.05% | ― | 16.93% | -335.82% |
* Energy Sector Average
SDRL
Seadrill Limited
35.27
-3.24
-8.41%
HP
Helmerich & Payne
31.27
-3.78
-10.78%
PTEN
Patterson-UTI
7.15
-1.71
-19.30%
RIG
Transocean
4.29
<0.01
0.23%
BORR
Borr Drilling
4.38
0.59
15.57%
VAL
Valaris
53.76
4.24
8.56%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.