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Subsea 7 SA (SUBCY)
:SUBCY
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Subsea 7
(OTC:SUBCY)
Rating:73Outperform
Price Target:
$21.00
â–²(10.53% Upside)
Subsea 7 (SUBCY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.67B
Dividend Yield4.54%
Average Volume (3M)7.59K
Price to Earnings (P/E)20.9
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. Volume8,211
30 Day Avg. Volume7,586
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)1.11
Price to Sales (P/S)0.69
P/FCF Ratio8.08
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue0.89
Enterprise Value/Gross Profit7.39
Enterprise Value/Ebitda5.27
Forecast
1Y Price Target
$21.00Price Target Upside10.53% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Subsea 7 Business Overview & Revenue Model
Company DescriptionSubsea 7 (SUBCY) is a global leader in the delivery of offshore projects and services for the energy industry. The company specializes in engineering, construction, and maintenance of underwater infrastructure, primarily for the oil and gas sector. Subsea 7 offers a comprehensive range of services, including subsea construction, inspection, repair, and maintenance, as well as decommissioning and renewable energy solutions. The company operates a fleet of specialized vessels and a team of skilled professionals to execute complex projects in challenging marine environments.
How the Company Makes MoneySubsea 7 generates revenue through a variety of key streams, primarily from contracts awarded by major oil and gas companies for the development and maintenance of offshore energy infrastructure. The company offers engineering, procurement, construction, and installation (EPCI) services, which form a significant portion of its earnings. Revenue is also derived from long-term agreements for inspection, maintenance, and repair services, ensuring the operability and safety of underwater installations. Additionally, Subsea 7 is increasingly involved in the renewable energy sector, providing solutions for offshore wind farm development, which represents a growing revenue segment. Strategic partnerships and alliances with energy companies and technology providers further enhance its market position and contribute to its financial performance.
Subsea 7 Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2025)
| % Change Since: -1.61%|
Next Earnings Date:Nov 20, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant growth in EBITDA and order intake, strong backlog visibility, and promising project developments in Norway and Brazil. However, these positives were balanced by flat revenue growth, a decrease in cash reserves, concerns over the Saipem merger, and challenges in the offshore wind sector.Q2-2025 Updates
Positive Updates
Strong EBITDA Growth
Subsea 7 delivered Q2 adjusted EBITDA of $360 million, representing a 23% growth year-over-year with a margin of over 20%.
High Order Intake
Order intake was $2.5 billion, resulting in a book-to-bill of 1.4x for the quarter and 1x for the half year.
Backlog Visibility
Subsea 7 has a combined backlog of $3.6 billion for execution in the remainder of 2025, giving over 90% visibility on full year revenue.
Norway Projects
Subsea 7 is involved in significant projects in Norway, including Ormen Lange Phase 3, Yggdrasil, and Northern Lights, illustrating their capability in maximizing reserves and decarbonizing industries.
Brazil Market Expansion
Tendering activities remain high in Brazil with new projects like Mero wave 2 and Búzios wave 2 being added.
Negative Updates
Flat Revenue Growth
Group revenue in the second quarter was $1.8 billion, up only 1% compared to the same quarter last year.
Decrease in Cash and Cash Equivalents
Cash and cash equivalents decreased by $46 million to $413 million at the end of the quarter.
Potential Challenges in Merger with Saipem
Concerns were raised about potential liabilities associated with Saipem's legacy backlog and provisioning for projects like Thai Oil.
Offshore Wind Sector Challenges
The offshore wind sector, while having potential in the UK, is experiencing slower-than-anticipated growth in other markets.
Company Guidance
During Subsea 7's Q2 2025 results conference call, guidance was reiterated, emphasizing strong financial performance and future prospects. The company reported a second-quarter adjusted EBITDA of $360 million, representing a 23% year-on-year growth with a margin exceeding 20%. Revenue for the quarter was $1.8 billion, marking a 1% increase from the previous year. The order intake for the quarter stood at $2.5 billion, resulting in a book-to-bill ratio of 1.4x for the quarter and 1x for the half-year. Subsea 7's backlog for the remainder of 2025 is valued at $3.6 billion, providing over 90% revenue visibility for the full year. The company maintained its 2025 revenue guidance between $6.8 billion and $7.2 billion, with an adjusted EBITDA margin expected between 18% and 20%.Subsea 7 Financial Statement Overview
Summary
Subsea 7 exhibits solid financial health with strong revenue growth, efficient cost management, and robust cash flow generation. The company has a manageable financial leverage and a strong capital structure. However, there is room for improvement in net profitability.Income Statement
The company shows a strong revenue growth trajectory with a TTM (Trailing-Twelve-Months) revenue of $6.97 billion, up from $5.13 billion in 2022, representing a significant growth rate. The gross profit margin has improved to 11.26% from previous years, indicating better cost management. Net profit margin stands at 2.78%, reflecting profitability but also suggesting room for improvement. The EBIT and EBITDA margins are strong at 7.09% and 15.30%, respectively, showcasing stable operational efficiency.78
Positive
Balance Sheet
The company's financial leverage is moderate with a debt-to-equity ratio of 0.25, which is manageable for the industry. The equity ratio is healthy at 55.07%, suggesting a strong capital structure with a significant portion of assets financed by equity. Return on equity (ROE) is modest at 4.48%, indicating moderate profitability relative to shareholder equity.72
Positive
Cash Flow
Subsea 7 has demonstrated strong cash flow metrics with a free cash flow growth rate of 8.65% compared to the previous period. The operating cash flow to net income ratio is robust at 5.04, and the free cash flow to net income ratio is strong at 3.27, indicating efficient cash conversion from net income and good liquidity management.81
Very 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
Positive
19.00
Price Trends
18.75
Positive
16.70
Positive
16.09
Positive
Market Momentum
0.14
Positive
47.47
Neutral
3.46
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SUBCY, the sentiment is Positive. The current price of 19 is below the 20-day moving average (MA) of 19.46, above the 50-day MA of 18.75, and above the 200-day MA of 16.09, indicating a neutral trend. The MACD of 0.14 indicates Positive momentum. The RSI at 47.47 is Neutral, neither overbought nor oversold. The STOCH value of 3.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SUBCY.
Subsea 7 Peers Comparison
Overall Rating
UnderperformOutperform
Sector (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $14.59B | 16.81 | 29.27% | 0.57% | 12.15% | 91.88% | |
75 Outperform | $18.48B | 10.14 | 18.16% | 3.15% | -4.08% | -29.26% | |
75 Outperform | $50.28B | 11.26 | 19.78% | 3.39% | 0.94% | -4.63% | |
74 Outperform | $43.20B | 14.34 | 18.32% | 2.05% | 2.13% | 54.69% | |
73 Outperform | $5.67B | 20.85 | 6.46% | 4.54% | 10.50% | 164.35% | |
71 Outperform | $4.54B | 10.04 | 7.31% | 4.20% | -1.21% | -54.44% | |
56 Neutral | C$4.11B | -0.17 | 0.41% | 6.51% | 5.45% | -66.94% |
* Energy Sector Average
Performance Comparison
SUBCY
Subsea 7
19.00
2.19
13.03%
BKR
Baker Hughes Company
43.82
10.32
30.81%
FTI
TechnipFMC
35.49
10.46
41.79%
HAL
Halliburton
21.67
-8.27
-27.62%
NOV
NOV
12.22
-4.69
-27.74%
SLB
Schlumberger
33.50
-8.17
-19.61%
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.