Subsea 7 (SUBCY) AI Stock Analysis

• Market Cap: $7.86B
• Dividend Yield: 5.67%
• Average Volume (3M): 9.40K
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.79
• Revenue Growth: 5.98%
• EPS Growth: 79.75%
• Country: US
• Employees: 14,876
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 0.49
• Shares Outstanding: 299,600,000
• 10 Day Avg. Volume: 7,160
• 30 Day Avg. Volume: 9,403
• PEG Ratio: 0.14
• Price to Book (P/B): 1.35
• Price to Sales (P/S): 0.84
• P/FCF Ratio: 5.01
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 1.11
• Enterprise Value/Gross Profit: 7.19
• Enterprise Value/Ebitda: 5.44
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): 2.17
• Revenue Forecast (FY): $7.47B

• Rating: 77 Outperform
• Price Target: $29.00 ▲(33.58% Upside)
• Action: Reiterated Date: 03/01/26
• Date: Action: Reiterated 03/01/26

The score is driven primarily by improving financial performance and strong cash flow, reinforced by a constructive earnings outlook with record backlog and higher margin guidance. Technicals show a strong uptrend but are overextended, and valuation is supported by the dividend but not especially cheap on P/E.

Positive Factors

Record backlog & strong order intake

A near-$14B backlog with a quarter at 2.1x book-to-bill provides multi‑year revenue visibility and supports steady utilization of vessels and crews. This durable backlog underpins predictable project scheduling, margin realization and planning for 2026 where revenue visibility is noted as >80%.

Robust cash generation

Strong operating and free cash flow in 2025, with FCF covering ~81% of net income, indicates the business can fund capex, service debt, pay dividends and absorb project timing variability. Durable cash conversion enhances financial flexibility for cyclical offshore contracting.

Improved margins and returns

A sustained uplift to ~20% EBITDA margins and management's target ~22% reflect stronger project execution and pricing power. Improved ROE to ~9.4% signals healthier capital efficiency versus prior years, supporting durable profitability if project mix and execution quality persist.

Negative Factors

Cyclicality and execution sensitivity

The business is structurally cyclical and execution‑sensitive: past years show deep swings in profitability tied to project timing and offshore spend. This makes earnings and cash flow inherently volatile over medium terms, complicating forecasting and capital allocation during downturns.

Working capital & FX exposure

Large working capital swings and material FX losses highlight structural cash flow exposure to project billing/timing and currency movements. These recurring sensitivities can erode free cash flow and margins even when underlying operations are profitable, pressuring liquidity.

Weakness in Renewables segment

A 19% decline in Renewables revenue shows limited diversification progress into growing energy transition markets. Persistently weak renewables activity reduces strategic optionality and could limit long‑term growth upside as the industry shifts toward greener projects.

Subsea 7 Business Overview & Revenue Model

Company Description

Subsea 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 Money

Subsea 7 primarily makes money by contracting to deliver offshore subsea projects for energy producers under agreed commercial terms. Revenue is generated mainly from project-based work where the company is paid to plan and execute subsea developments—typically covering engineering/design, procurement of equipment and materials, fabrication management, transportation, installation offshore (using its vessels), and commissioning/hand-over. Key revenue streams generally include: (1) EPCI project contracts: end-to-end delivery of subsea infrastructure where Subsea 7 recognizes revenue as project work progresses (method and timing depend on contract terms and accounting policies). Project economics depend on contract pricing, scope control, execution efficiency, weather and offshore operational performance, and procurement/fabrication costs. (2) Installation and offshore operations services: vessel-based installation, intervention, inspection, repair and maintenance support, and related marine operations, which can be contracted as standalone service scopes or as part of larger EPCI awards. Utilization of its fleet and day-rate/operations pricing (where applicable under the contract structure) materially influences earnings. (3) Engineering and project management services: front-end engineering and detailed design, project management, and specialist subsea engineering, sometimes performed before full project sanction or as separate work packages. Profitability is driven by labor utilization and delivery efficiency. (4) Strategic procurement/fabrication management and integration: the company may earn margin through managing procurement and integration of subsea equipment and materials within contracted scopes; performance depends on supply chain execution and subcontractor management. Overall earnings are influenced by the volume and size of offshore project awards in its backlog, the mix of contract types (e.g., lump-sum vs. reimbursable or hybrid structures), execution risk management, vessel and resource utilization, and broader offshore energy spending cycles. Specific partnerships, customer concentration, and segment-level revenue breakdowns: null.

Subsea 7 Financial Statement Overview

Summary

Strong multi-year recovery with improved profitability and standout cash generation (2025 operating cash flow ~$1.47B; free cash flow ~$1.19B). Balance sheet leverage is moderate (debt-to-equity ~0.25) but results and cash flow show cyclical volatility and execution sensitivity.

Income Statement

Revenue has expanded strongly from 2021–2025, with a clear step-up in profitability since 2023. 2025 shows solid operating performance (gross margin ~15%, EBITDA margin ~20%, net margin ~5.8%), a meaningful improvement versus 2023–2024. The key weakness is cyclicality: results were deeply negative in 2020 and margins were very thin in 2021–2023, indicating earnings can swing sharply with project mix and industry conditions.

Balance Sheet

Leverage looks manageable, with debt-to-equity around ~0.25 in 2025 (improved from ~0.30 in 2023), supported by a sizable equity base. Returns on equity have also improved to ~9.4% in 2025 from low-single-digits earlier, reflecting the earnings recovery. The main drawback is that debt has trended higher versus 2020–2022 levels, and overall returns remain moderate for a cyclical services business.

Cash Flow

Cash generation is a standout: operating cash flow rose to ~$1.47B in 2025 and free cash flow to ~$1.19B, with strong free-cash-flow growth (~38%). Free cash flow is also well-supported by earnings (free cash flow is ~81% of net income in 2025). The key risk is volatility—free cash flow was far weaker in 2023, highlighting sensitivity to working capital and project timing.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.11B	6.84B	5.97B	5.14B	5.01B
Gross Profit	1.09B	704.70M	362.80M	397.00M	295.80M
EBITDA	1.43B	1.09B	689.20M	631.20M	564.60M
Net Income	412.67M	201.40M	15.40M	36.40M	31.80M
Balance Sheet
Total Assets	8.03B	7.68B	8.10B	6.94B	6.99B
Cash, Cash Equivalents and Short-Term Investments	975.70M	556.40M	726.20M	610.40M	553.10M
Total Debt	1.12B	1.18B	1.30B	613.00M	652.80M
Total Liabilities	3.59B	3.39B	3.74B	2.49B	2.50B
Stockholders Equity	4.41B	4.25B	4.32B	4.12B	4.18B
Cash Flow
Free Cash Flow	1.19B	582.70M	78.20M	254.80M	126.50M
Operating Cash Flow	1.47B	931.40M	660.00M	485.80M	293.00M
Investing Cash Flow	-278.46M	-413.60M	-710.20M	-220.10M	-183.70M
Financing Cash Flow	-810.00M	-680.20M	151.10M	-211.20M	-22.80M

Subsea 7 Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 21.71
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 21.71 is below the 20-day moving average (MA) of 26.87, below the 50-day MA of 25.34, and above the 200-day MA of 20.66, indicating a neutral trend. The MACD of 0.28 indicates Positive momentum. The RSI at 52.53 is Neutral, neither overbought nor oversold. The STOCH value of 63.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SUBCY.

Subsea 7 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TS	80 Outperform	$30.43B	10.34	11.48%	4.43%	-9.76%	-18.94%
FTI	79 Outperform	$26.11B	19.37	29.62%	0.44%	11.73%	45.70%
SUBCY	77 Outperform	$7.86B	14.45	9.61%	5.67%	5.98%	79.75%
BKR	69 Neutral	$59.64B	17.39	14.43%	2.04%	1.51%	30.09%
SLB	69 Neutral	$69.73B	16.85	14.64%	2.98%	-2.13%	-16.76%
HAL	66 Neutral	$30.60B	18.48	12.36%	2.41%	-4.06%	-47.41%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%