Talos Energy (TALO) AI Stock Analysis

• Market Cap: $1.50B
• Dividend Yield: N/A
• Average Volume (3M): 3.08M
• Price to Earnings (P/E): 59.0
• Beta (1Y): 0.78
• Revenue Growth: 31.40%
• EPS Growth: 92.89%
• Country: US
• Employees: 700
• Sector: Energy
• Sector Strength: 48
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.06
• Shares Outstanding: 178,455,140
• 10 Day Avg. Volume: 2,543,218
• 30 Day Avg. Volume: 3,081,595
• PEG Ratio: 0.47
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.24
• Enterprise Value/Market Cap: 1.75
• Enterprise Value/Revenue: 0.34
• Enterprise Value/Gross Profit: 7.57
• Enterprise Value/Ebitda: 0.53
• 1Y Price Target: $11.67
• Price Target Upside: 34.91% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 71 Outperform
• Price Target: $9.50 ▲(9.83%Upside)

Talos Energy's strong financial performance and strategic initiatives, highlighted by robust cash flow and record production, are key strengths. However, high valuation metrics and mixed technical signals present challenges. The company is well-positioned strategically, but improvements in profitability metrics could enhance its stock attractiveness.

Positive Factors

Capital Efficiency

The company's capital plan is ~$100 million under expectations, setting a strong foundation for future success with a nine-project drill calendar.

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 noted 25-35 MMboe of additional potential resource in the Wilcox trend from a prospective drilling.

Negative Factors

Maintenance Schedule

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

Oil Market Fundamentals

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

Talos Energy Business Overview & Revenue Model

Company Description

Talos Energy Inc. (TALO) is an independent energy company focused on the exploration, development, and production of oil and natural gas properties. Headquartered in Houston, Texas, the company operates primarily in the United States Gulf of Mexico and offshore Mexico, leveraging its expertise in geological and geophysical analysis to discover and develop significant energy resources. Talos is committed to delivering value through strategic acquisitions, efficient operations, and innovative exploration techniques.

How the Company Makes Money

Talos Energy generates revenue primarily through the sale of oil, natural gas, and natural gas liquids that it extracts from its properties. The company's revenue model centers around the exploration and production of hydrocarbon resources, which are sold to refineries, utilities, and other market participants. Key revenue streams include income from the sale of oil and gas extracted from both their developed and undeveloped reserves. Talos Energy also engages in strategic partnerships and joint ventures to enhance its operational capabilities and expand its resource base, which can contribute to its earnings by sharing costs and leveraging combined expertise. Additionally, the company may engage in hedging activities to manage market risks and stabilize cash flows.

Talos Energy Financial Statement Overview

Summary

Talos Energy displays strong financial metrics with robust cash flow management and revenue growth. Despite challenges in net profitability with a low net profit margin of 1.27% and ROE at 0.96%, operational efficiency is evidenced by high EBIT and EBITDA margins of 7.22% and 70.07%, respectively.

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: 8.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 8.65 is above the 20-day moving average (MA) of 8.64, above the 50-day MA of 8.55, and below the 200-day MA of 9.28, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 50.79 is Neutral, neither overbought nor oversold. The STOCH value of 30.02 is Neutral, 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	$1.79B	9.46	12.64%	18.49%	―	―
HPK	71 Outperform	$1.10B	9.95	7.09%	1.83%	-11.59%	-28.62%
TALO	71 Outperform	$1.50B	59.00	0.95%	―	31.40%	92.89%
KRP	68 Neutral	$1.75B	45.09	2.88%	11.81%	3.20%	-91.39%
KOS	57 Neutral	$970.36M	4.03	-1.15%	―	-11.11%	-105.10%
Sector *	52 Neutral	C$2.95B	-1.54	-3.48%	6.65%	3.17%	-49.19%
BKV	45 Neutral	$1.70B	―	-13.36%	―	2.24%	-918.36%

Talos Energy Corporate Events

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.

The most recent analyst rating on (TALO) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Talos Energy stock, see the TALO Stock Forecast page.

Talos Energy Elects New Board Members at Annual Meeting

At the 2025 Annual Meeting of Stockholders held on May 29, 2025, Talos Energy Inc. successfully elected seven director nominees to its board for a term expiring at the 2026 Annual Meeting. Additionally, the stockholders approved the compensation of the company’s named executive officers for the fiscal year ended December 31, 2024, and decided to hold annual advisory votes on executive compensation. The appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, was also ratified. These decisions reflect the company’s ongoing commitment to governance and transparency, potentially impacting its strategic direction and stakeholder confidence.

The most recent analyst rating on (TALO) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Talos Energy stock, see the TALO Stock Forecast page.

Talos Energy Enhances Market Position with Acquisition

On March 4, 2024, Talos Energy completed the acquisition of QuarterNorth Energy, a privately-held exploration and production company, for a total consideration of $1,247.4 million in cash and 24.3 million shares of Talos’s common stock valued at $322.6 million. The acquisition was financed through a combination of bank credit facility borrowings, an equity offering, and a debt offering, which included the issuance of new senior secured notes. This strategic acquisition is expected to enhance Talos’s operational scale and market position in the Gulf of Mexico, potentially offering significant benefits to stakeholders.

The most recent analyst rating on (TALO) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Talos Energy stock, see the TALO Stock Forecast page.

Talos Energy Announces CFO Resignation and Replacement

On May 19, 2025, Talos Energy announced the resignation of Sergio L. Maiworm Jr. as Executive Vice President and CFO, effective June 27, 2025, and the appointment of Gregory M. Babcock as Interim CFO starting June 28, 2025. Babcock, who has been with Talos since 2014, will report directly to the CEO. The leadership change is not related to any financial reporting issues, and the company reaffirms its production and financial guidance for 2025.

The most recent analyst rating on (TALO) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Talos Energy stock, see the TALO Stock Forecast page.

Talos Energy Reports Q1 2025 Results, Net Loss $9.9M

On May 5, 2025, Talos Energy announced its first quarter 2025 operational and financial results, reporting a production rate of 100.9 MBoe/d and a net loss of $9.9 million. The company completed well operations on the Sunspear discovery and initiated operations on the Katmai West #2 well, with both expected to begin production by late second quarter 2025. Talos maintained a strong balance sheet with significant cash reserves and an undrawn credit facility, allowing flexibility in capital budgeting and share repurchase plans. The company also increased its interest in the Monument discovery and plans to commence drilling on the Daenerys prospect, highlighting its strategic focus on expanding resource potential.