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Subsea 7 (SUBCY)
OTHER OTC:SUBCY
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Subsea 7
(OTC:SUBCY)
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Rating:73Outperform
Price Target:
$22.00
▲(15.06% Upside)
Subsea 7's strong financial performance and positive earnings call sentiment are key strengths, supported by robust EBITDA growth and order intake. However, technical indicators suggest potential short-term weakness, and modest revenue growth poses a risk. The stock's valuation is reasonable, with a solid dividend yield.
Subsea 7 (SUBCY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.43B
Dividend Yield6.33%
Average Volume (3M)15.58K
Price to Earnings (P/E)21.0
Beta (1Y)0.78
Revenue Growth10.50%
EPS Growth164.35%
CountryUS
Employees14,876
SectorEnergy
Sector Strength52
IndustryOil & Gas Equipment & Services
Share Statistics
EPS (TTM)0.45
Shares Outstanding299,600,000
10 Day Avg. Volume9,771
30 Day Avg. Volume15,576
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue0.89
Enterprise Value/Gross Profit7.39
Enterprise Value/Ebitda5.27
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering0
Subsea 7 Business Overview & Revenue Model
Company DescriptionSubsea 7 S.A. delivers offshore projects and services for the evolving energy industry worldwide. It provides subsea field development products and services, including project management, design and engineering, procurement, fabrication, survey, installation, and commissioning of production facilities on the seabed and the tie-back of its facilities to fixed or floating platforms or to the shore. The company also offers engineering, procurement, commissioning, and installation of subsea umbilicals, risers, and flowlines; inspection, repair, maintenance, remote intervention, and integrity management of subsea infrastructure services; conventional services comprising fabrication, installation, extension, and refurbishment of fixed and floating platforms and associated pipelines in shallow water; and hook-up services. In addition, it operates heavy lifting operations and heavy transportation services for renewables structures; and installs offshore wind turbine foundations and inter-array cables, as well as engages in the decommissioning of redundant offshore structures. Further, the company provides remotely operated vehicles (ROVs) and tooling services to support exploration and production activities, as well as engineering and advisory services for customers in the oil and gas, renewables, and utilities industries. As of December 31, 2021, it has a fleet of 38 vessels. Subsea 7 S.A. was incorporated in 1993 and is based in Luxembourg.
How the Company Makes MoneySubsea 7 generates revenue through a combination of project-based contracts and service agreements with clients in the oil and gas sector, as well as the renewable energy market. Key revenue streams include the design and installation of subsea infrastructure, maintenance and repair services, and engineering consultancy. The company often enters into long-term contracts with major oil and gas companies, which provide a steady flow of income. Additionally, Subsea 7 has formed strategic partnerships and joint ventures that enhance its capabilities and market reach, contributing to its earnings. Factors such as global oil and gas prices, demand for offshore energy projects, and advancements in subsea technology significantly impact its revenue generation.
Subsea 7 Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 20, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in EBITDA and strong order intake, along with increased backlog visibility. However, these positives were tempered by modest revenue growth and increased net debt. The sentiment is slightly more weighted towards positive due to strong EBITDA growth and order intake.Q2-2025 Updates
Positive Updates
Strong EBITDA Growth
Subsea 7 delivered a second quarter adjusted EBITDA of $360 million, representing a 23% growth year-on-year and a margin of over 20%.
High Order Intake
Order intake was $2.5 billion for the quarter, resulting in a book-to-bill of 1.4x for the quarter and 1x for the half year.
Increased Backlog Visibility
The company has a combined backlog for execution in the remainder of 2025 of $3.6 billion, providing over 90% visibility on full-year revenue.
Subsea and Conventional Segment Performance
Subsea and Conventional reported revenue of $1.4 billion, flat year-on-year, with an adjusted EBITDA margin of 21%, an increase of 400 basis points from the prior year.
Renewables Performance Improvement
Renewables segment revenue was $307 million, up 9% year-on-year, with an adjusted EBITDA margin of 17%, up from 14% in Q2 2024.
Negative Updates
Modest Revenue Growth
Overall revenue for the second quarter was $1.8 billion, only up 1% compared to the same quarter last year, indicating modest growth.
Decreased Cash and Cash Equivalents
Cash and cash equivalents decreased by $46 million to $413 million by the end of the quarter.
Increased Net Debt
Net debt was $695 million, including lease liabilities of $448 million.
Company Guidance
During the Subsea 7 Q2 2025 results conference call, the company reiterated its fiscal 2025 guidance, highlighting a projected revenue range of $6.8 billion to $7.2 billion and an adjusted EBITDA margin between 18% and 20%. The second quarter saw a 23% year-on-year increase in adjusted EBITDA, reaching $360 million, and a margin exceeding 20%. Order intake was robust at $2.5 billion, resulting in a book-to-bill ratio of 1.4x for the quarter and 1x for the first half. The company's backlog for the remainder of 2025 stands at $3.6 billion, providing over 90% visibility on full-year revenue. Financial performance was bolstered by high activity levels across key regions, with notable contributions from Brazil, the U.S., Turkey, and Norway. Subsea and Conventional division revenue was $1.4 billion, with an adjusted EBITDA margin rising to 21%. The Renewables segment also saw a revenue increase to $307 million, with an adjusted EBITDA margin of 17%. Additionally, Subsea 7 confirmed its proposed merger with Saipem is progressing, with an EGM scheduled for September 25, 2025, and emphasized its strategic focus on long-cycle projects in advantageous regions.Subsea 7 Financial Statement Overview
Summary
Subsea 7 demonstrates strong financial health with robust revenue growth, improving profitability, and solid cash flow generation. The balance sheet is stable with manageable debt levels, though maintaining margins in a competitive industry is crucial.Income Statement
Subsea 7 has demonstrated strong revenue growth with a 24.2% increase in TTM, supported by improving margins. The gross profit margin increased to 12.06%, and the net profit margin rose to 3.84%, indicating enhanced profitability. However, the industry remains competitive, and maintaining these margins will be crucial.78
Positive
Balance Sheet
The company's debt-to-equity ratio is relatively low at 0.26, suggesting a conservative leverage strategy. Return on equity improved to 6.31%, reflecting better utilization of equity. The equity ratio stands at 51.98%, indicating a strong equity base. Continued focus on managing debt levels will be important for financial stability.72
Positive
Cash Flow
Subsea 7's cash flow performance is robust, with a significant 21.29% growth in free cash flow. The operating cash flow to net income ratio is strong at 4.28, indicating efficient cash generation. The free cash flow to net income ratio of 0.67 suggests healthy cash conversion, supporting future investments and debt servicing.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.99B | 6.84B | 5.97B | 5.14B | 5.01B | 3.47B |
| Gross Profit | 843.00M | 704.70M | 362.80M | 397.00M | 295.80M | -186.50M |
| EBITDA | 1.18B | 1.09B | 680.70M | 631.20M | 558.60M | -605.00M |
| Net Income | 268.30M | 201.40M | 15.40M | 36.40M | 31.80M | -1.11B |
Balance Sheet | ||||||
| Total Assets | 7.96B | 7.68B | 8.10B | 6.94B | 6.99B | 6.30B |
| Cash, Cash Equivalents and Short-Term Investments | 413.30M | 556.40M | 726.20M | 610.40M | 553.10M | 480.20M |
| Total Debt | 1.09B | 1.18B | 1.30B | 613.00M | 652.80M | 463.00M |
| Total Liabilities | 3.78B | 3.39B | 3.74B | 2.49B | 2.50B | 2.04B |
| Stockholders Equity | 4.14B | 4.25B | 4.32B | 4.12B | 4.18B | 4.23B |
Cash Flow | ||||||
| Free Cash Flow | 768.00M | 582.70M | 78.20M | 254.80M | 126.50M | 264.20M |
| Operating Cash Flow | 1.15B | 931.40M | 660.00M | 485.80M | 293.00M | 446.80M |
| Investing Cash Flow | -344.00M | -413.60M | -710.20M | -220.10M | -183.70M | -164.60M |
| Financing Cash Flow | -761.50M | -680.20M | 151.10M | -211.20M | -22.80M | -157.60M |
Subsea 7 Technical Analysis
Negative
19.12
Price Trends
20.20
Negative
19.67
Negative
17.48
Positive
Market Momentum
-0.34
Positive
38.30
Neutral
56.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SUBCY, the sentiment is Negative. The current price of 19.12 is below the 20-day moving average (MA) of 19.95, below the 50-day MA of 20.20, and above the 200-day MA of 17.48, indicating a neutral trend. The MACD of -0.34 indicates Positive momentum. The RSI at 38.30 is Neutral, neither overbought nor oversold. The STOCH value of 56.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SUBCY.
Subsea 7 Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $16.90B | 18.40 | 28.72% | 0.53% | 11.73% | 45.70% | |
| ― | $47.94B | 16.64 | 16.83% | 1.84% | 1.51% | 30.09% | |
| ― | $21.45B | 10.32 | 12.06% | 4.16% | -12.06% | -21.43% | |
| ― | $55.02B | 13.86 | 15.46% | 3.11% | -2.13% | -16.76% | |
| ― | $5.43B | 21.00 | 6.46% | 6.33% | 10.50% | 164.35% | |
| ― | $22.69B | 18.19 | 12.77% | 2.52% | -4.06% | -47.41% | |
| ― | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
SUBCY
Subsea 7
19.12
4.38
29.72%
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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.