Talos Energy (TALO) AI Stock Analysis

• Market Cap: $1.74B
• Dividend Yield: N/A
• Average Volume (3M): 2.63M
• Price to Earnings (P/E): 54.6
• Beta (1Y): 0.86
• Revenue Growth: 10.59%
• EPS Growth: -3044.85%
• Country: US
• Employees: 700
• Sector: Energy
• Sector Strength: 66
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): -0.27
• Shares Outstanding: 174,658,020
• 10 Day Avg. Volume: 2,638,695
• 30 Day Avg. Volume: 2,625,390
• PEG Ratio: 0.17
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.86
• P/FCF Ratio: 1.77
• Enterprise Value/Market Cap: 1.42
• Enterprise Value/Revenue: 1.20
• Enterprise Value/Gross Profit: 7.14
• Enterprise Value/Ebitda: 1.72
• 1Y Price Target: $12.83
• Price Target Upside: 32.27% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 69 Neutral
• Price Target: $9.50 ▼(-2.06% Downside)

Talos Energy's strong financial performance and positive earnings call are key strengths, supported by strategic corporate events. However, valuation concerns and technical indicators suggest caution, balancing the overall score.

Positive Factors

Operational Efficiency

Continued execution strength in operations and efficiencies with the West Vela rig can drive increased investor confidence in the stock.

Resource Potential

TALO management has identified additional resource potential in the Wilcox trend, which could enhance the company's resource base.

Negative Factors

Oil Fundamentals

A cautious view of oil fundamentals and a less attractive free cash flow profile at current strip prices keep the recommendation at Neutral.

Operational Schedule

The company's schedule results in a one-rig program in 2025 due to a heavier maintenance year.

Talos Energy Business Overview & Revenue Model

Company Description

Talos Energy Inc., an independent exploration and production company, focuses on the exploration and production of oil and natural gas properties in the United States Gulf of Mexico and offshore Mexico. As of December 31, 2021, the company had proved reserves of 161.59 million barrels of oil equivalent, consisting of 107,764 thousand barrels of crude oil, 236,353 million cubic feet of natural gas, and 14,435 thousand barrels of crude oil. The company was founded in 2011 and is based in Houston, Texas.

How the Company Makes Money

Talos Energy generates revenue primarily through the production and sale of crude oil and natural gas. The company's revenue model is based on the extraction of hydrocarbons from its operated and non-operated properties, where it sells the produced oil and gas to various buyers, including refiners and marketers. Key revenue streams include the sale of crude oil, natural gas liquids, and natural gas. Additionally, Talos may engage in joint ventures and partnerships, sharing resources and costs with other energy companies, which can further enhance profitability. Market dynamics, such as global oil prices and demand for natural gas, significantly impact the company’s earnings, as fluctuating commodity prices directly affect revenue levels.

Talos Energy Financial Statement Overview

Summary

Talos Energy shows strong revenue growth and robust cash flow management, with impressive operating cash flow and free cash flow growth. However, challenges in net profitability and low return on equity slightly dampen the overall financial performance.

Income Statement

Talos Energy has shown strong revenue growth with a significant increase from previous years, indicating a positive growth trajectory. The gross profit margin for TTM is approximately 16.89%, with a net profit margin of 1.27%, reflecting challenges in converting revenue into net income. However, the EBIT and EBITDA margins are relatively strong at 7.22% and 70.07% respectively, highlighting operational efficiency.

Balance Sheet

The company's debt-to-equity ratio stands at 0.45, suggesting a balanced approach to leverage. The return on equity (ROE) for TTM is relatively low at 0.96%, indicating challenges in generating earnings from shareholders' equity. The equity ratio is 44.54%, showing a strong equity base relative to total assets, which indicates financial stability.

Cash Flow

Talos Energy demonstrates robust cash flow management, with a significant increase in operating cash flow. The free cash flow growth rate is notably high, indicating improved cash generation capabilities. The operating cash flow to net income ratio is very strong, highlighting efficient cash conversion from operations despite occasional net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.06B	1.97B	1.46B	1.65B	1.24B	575.94M
Gross Profit	347.19M	382.59M	402.28M	925.77M	561.58M	-36.03M
EBITDA	1.44B	1.26B	1.05B	966.11M	402.67M	83.48M
Net Income	26.18M	-76.39M	187.33M	381.92M	-182.95M	-465.61M
Balance Sheet
Total Assets	6.13B	6.19B	4.82B	3.06B	2.77B	2.83B
Cash, Cash Equivalents and Short-Term Investments	202.95M	108.17M	33.64M	44.15M	69.85M	34.23M
Total Debt	1.24B	1.24B	1.20B	602.14M	980.77M	1.01B
Total Liabilities	3.40B	3.43B	2.66B	1.89B	2.01B	1.91B
Stockholders Equity	2.73B	2.76B	2.16B	1.17B	760.65M	926.60M
Cash Flow
Free Cash Flow	1.28B	962.59M	-54.73M	386.57M	118.06M	-61.02M
Operating Cash Flow	1.13B	962.59M	519.07M	709.74M	411.39M	301.92M
Investing Cash Flow	-525.94M	-1.32B	-512.63M	-311.98M	-293.75M	-678.90M
Financing Cash Flow	-422.86M	436.12M	85.41M	-423.47M	-82.02M	324.19M

Talos Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TALO, the sentiment is Positive. The current price of 9.7 is above the 20-day moving average (MA) of 8.88, above the 50-day MA of 8.70, and above the 200-day MA of 8.99, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 63.40 is Neutral, neither overbought nor oversold. The STOCH value of 84.93 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TALO.

Talos Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MNR	77 Outperform	$1.68B	7.33	16.84%	16.10%	11.56%	―
TALO	69 Neutral	$1.74B	54.59	-6.56%	―	10.59%	-3044.85%
KRP	68 Neutral	$1.70B	45.09	4.52%	12.09%	-2.89%	-107.61%
Sector *	66 Neutral	$15.26B	7.30	3.22%	5.27%	4.16%	-60.82%
HPK	64 Neutral	$990.14M	9.14	6.80%	2.10%	-20.30%	-27.90%
BKV	62 Neutral	$1.99B	―	-1.36%	―	13.20%	55.44%
KOS	53 Neutral	$870.42M	4.03	-14.81%	―	-21.77%	-160.32%

Talos Energy Corporate Events

Talos Energy Announces Key Executive Appointments

Talos Energy announced key executive appointments to support its corporate strategy and enhance its offshore leadership. Zachary B. Dailey was appointed as Executive Vice President and Chief Financial Officer, effective August 18, 2025, bringing over 17 years of oil and gas experience. William R. Langin will join as Executive Vice President – Exploration and Development on September 29, 2025, with over 20 years of experience in the industry. Megan Dick was promoted to Executive Vice President and Chief Human Resources Officer, effective August 1, 2025. These appointments are expected to strengthen Talos Energy’s strategic leadership and contribute to its long-term success.

Talos Energy Reports Q2 2025 Results and Strategic Moves

On August 6, 2025, Talos Energy announced its second quarter 2025 operational and financial results, highlighting a strategic enhancement to position itself as a leading offshore E&P company. The company reported a net loss of $185.9 million due to non-cash impairment charges, but achieved significant operational milestones, including initiating production from new wells and resuming drilling at the Daenerys prospect. Talos also improved its financial outlook with higher production, lower expenses, and increased cash flow, while repurchasing shares and enhancing its balance sheet. These developments are expected to strengthen Talos’s market position and benefit stakeholders by ensuring flexibility and capital returns.

Talos Energy Amends Credit Agreement, Alters Debt Terms

On August 4, 2025, Talos Energy Inc. and its subsidiaries entered into the Twelfth Amendment to their Credit Agreement, reducing the borrowing base and total commitments to $700 million. This amendment also removes the $50 million cap on unrestricted cash deductions in debt calculations, potentially impacting the company’s financial flexibility and stakeholder interests.

Talos Energy Unveils New Offshore Strategy

On June 17, 2025, Talos Energy announced an enhanced corporate strategy aimed at positioning itself as a leading pure-play offshore exploration and production company. The strategy focuses on improving daily operations to increase cash flow, investing in high-margin projects, and building a long-lived portfolio in offshore basins. This strategic shift is expected to capitalize on anticipated market trends and enhance shareholder returns.