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Talos Energy Inc (TALO)
NYSE:TALO
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Talos Energy
(NYSE:TALO)
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Rating:63Neutral
Price Target:
$11.00
▲(1.38% Upside)
Talos Energy's overall stock score is driven by strong earnings call performance and positive technical indicators. However, challenges in financial performance and valuation due to negative profitability metrics weigh on the score. The company's ability to generate cash and manage costs effectively are positive factors, but improvements in revenue growth and profitability are needed.
Positive Factors
Strong Cash Generation
Strong cash generation allows Talos Energy to reinvest in growth opportunities and return capital to shareholders, enhancing long-term financial stability.
Cost Reduction and Efficiency
Effective cost management improves profitability and competitiveness, positioning Talos Energy favorably against peers in the oil and gas sector.
Advantaged Cost Structure
A lower cost structure enhances Talos Energy's ability to maintain high margins, providing resilience against market fluctuations and supporting long-term growth.
Negative Factors
Declining Revenue
Revenue decline reflects challenges in market demand or pricing, potentially impacting future growth and profitability if not addressed.
Negative Profit Margin
A negative profit margin indicates profitability challenges, which could hinder Talos Energy's ability to sustain operations and invest in growth.
Decline in Free Cash Flow Growth
Declining free cash flow growth limits Talos Energy's capacity to fund new projects or return capital to shareholders, affecting long-term financial health.
Talos Energy (TALO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.91B
Dividend YieldN/A
Average Volume (3M)2.14M
Price to Earnings (P/E)―
Beta (1Y)0.92
Revenue Growth-0.02%
EPS Growth-473.61%
CountryUS
Employees700
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)-0.19
Shares Outstanding169,988,770
10 Day Avg. Volume2,203,484
30 Day Avg. Volume2,136,213
Financial Highlights & Ratios
PEG Ratio0.17
Price to Book (P/B)0.62
Price to Sales (P/S)0.86
P/FCF Ratio1.77
Enterprise Value/Market Cap1.41
Enterprise Value/Revenue1.44
Enterprise Value/Gross Profit9.73
Enterprise Value/Ebitda2.78
Forecast
1Y Price Target
$13.92Price Target Upside28.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)-0.97
Revenue Forecast (FY)$1.81B
Talos Energy Business Overview & Revenue Model
Company DescriptionTalos 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 MoneyTalos Energy generates revenue primarily through the exploration, production, and sale of crude oil and natural gas. The company earns money by extracting hydrocarbons from its owned and operated oil and gas fields, selling these resources at market prices. Key revenue streams include the sale of produced oil and gas, as well as any associated by-products, such as natural gas liquids. Additionally, Talos may engage in joint ventures and partnerships to develop specific projects, which can provide additional revenue opportunities. The company's financial performance is influenced by global oil and gas prices, production volumes, and operational efficiencies, as well as its ability to manage costs effectively.
Talos Energy Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 04, 2026
Earnings Call Sentiment Positive
The earnings call detailed strong operational and financial performance, with notable achievements in production, free cash flow generation, and cost efficiency. Despite some challenges, such as a noncash impairment and market volatility, the positive aspects significantly outweighed the negatives.Q3-2025 Updates
Positive Updates
Strong Operational Performance
Production exceeded guidance with over 95,000 barrels of oil equivalent per day, with approximately 70% comprised of oil. The absence of storm activity and high facility uptime contributed to this success.
Significant Free Cash Flow Generation
Generated $103 million in free cash flow during the quarter, surpassing consensus estimates, and $400 million year-to-date. This enabled the repurchase of approximately 5 million shares for $48 million.
Cost Reduction and Efficiency
Operating expenses lowered by almost 10% from $17 per barrel in 2024 to $15.27 per barrel in Q3 2025, with over 60 initiatives implemented to reduce costs and enhance efficiency.
Successful Exploration Discovery
Promising exploration discovery at Daenerys, with the well drilled ahead of schedule and under budget. An appraisal well is planned for Q2 2026.
Advantaged Cost Structure
Talos' operating costs are 40% lower than the peer group, leading to top decile EBITDA margins in the E&P sector for the year.
Innovative Surety Bond Agreement
Proactively developed a solution with surety providers to avoid collateral calls, ensuring stability in a tightening surety market.
Negative Updates
Noncash Impairment
Recorded a noncash impairment of $60 million related to the full cost ceiling test under SEC guidelines.
Volatile Commodity Price Environment
Ongoing challenges due to commodity price volatility, though mitigated by a focus on low breakeven projects.
Company Guidance
During the Talos Energy Third Quarter 2025 Earnings Call, the company provided guidance highlighting several key metrics and achievements. Talos reported production of over 95,000 barrels of oil equivalent per day, surpassing the high end of their guidance range, with approximately 70% being oil. They generated $103 million in free cash flow during the quarter, exceeding consensus estimates, and returned $48 million to shareholders through share repurchases. Year-to-date, Talos has achieved approximately $400 million in free cash flow. The company also noted a reduction in operating expenses, bringing the cost down to $15.27 per barrel, nearly a 10% decrease from 2024. Looking ahead, Talos anticipates a 3% increase in full-year oil and oil equivalent production compared to previous guidance and expects the fourth-quarter production mix to average 72% oil. Additionally, they have successfully lowered their full-year operating expense and capital guidance by 2%. The company maintains a leverage ratio of 0.7x and holds $333 million in cash, with approximately $1 billion in total liquidity at the end of the quarter.Talos Energy Financial Statement Overview
Summary
Talos Energy faces challenges in revenue growth and profitability, with a negative net profit margin and declining revenue. However, the company maintains a stable balance sheet with manageable debt levels and strong cash generation, despite a decline in free cash flow growth.Income Statement
Talos Energy's income statement shows mixed results. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue by 3.07% and a negative net profit margin of -8.91%, reflecting challenges in profitability. The gross profit margin has decreased to 14.29% from 19.39% in the previous year, indicating pressure on cost management. However, the EBITDA margin remains strong at 60.54%, suggesting operational efficiency. Overall, the income statement reflects a need for improvement in revenue growth and profitability.45
Neutral
Balance Sheet
The balance sheet of Talos Energy shows a moderate financial position. The debt-to-equity ratio is 0.49, indicating a manageable level of leverage. However, the return on equity is negative at -6.36%, highlighting challenges in generating returns for shareholders. The equity ratio stands at 41.76%, suggesting a stable capital structure. While the company maintains a reasonable debt level, the negative ROE indicates a need for improved profitability.55
Neutral
Cash Flow
Talos Energy's cash flow statement presents a mixed picture. The operating cash flow to net income ratio is strong at 1.68, indicating good cash generation relative to net income. However, the free cash flow growth rate is negative at -26.09%, reflecting a decline in cash available for reinvestment. The free cash flow to net income ratio is positive at 1.22, suggesting that the company is generating sufficient cash relative to its net income. Overall, while cash generation is strong, the decline in free cash flow growth is a concern.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.87B | 1.97B | 1.46B | 1.65B | 1.24B | 575.94M |
| Gross Profit | 276.24M | 382.59M | 402.28M | 925.77M | 561.58M | -36.03M |
| EBITDA | 968.50M | 1.26B | 1.05B | 966.11M | 402.67M | 83.48M |
| Net Income | -356.22M | -76.39M | 187.33M | 381.92M | -182.95M | -465.61M |
Balance Sheet | ||||||
| Total Assets | 5.70B | 6.19B | 4.82B | 3.06B | 2.77B | 2.83B |
| Cash, Cash Equivalents and Short-Term Investments | 332.69M | 108.17M | 33.64M | 44.15M | 69.85M | 34.23M |
| Total Debt | 1.36B | 1.24B | 1.20B | 602.14M | 980.77M | 1.01B |
| Total Liabilities | 3.32B | 3.43B | 2.66B | 1.89B | 2.01B | 1.91B |
| Stockholders Equity | 2.38B | 2.76B | 2.16B | 1.17B | 760.65M | 926.60M |
Cash Flow | ||||||
| Free Cash Flow | 929.67M | 962.59M | 506.70M | 386.57M | 118.06M | -61.02M |
| Operating Cash Flow | 1.08B | 962.59M | 519.07M | 709.74M | 411.39M | 301.92M |
| Investing Cash Flow | -556.94M | -1.32B | -512.63M | -311.98M | -293.75M | -678.90M |
| Financing Cash Flow | -268.98M | 436.12M | 85.41M | -423.47M | -82.02M | 324.19M |
Talos Energy Technical Analysis
Neutral
10.85
Price Trends
10.43
Positive
9.81
Positive
9.07
Positive
Market Momentum
0.17
Positive
46.83
Neutral
17.95
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TALO, the sentiment is Neutral. The current price of 10.85 is below the 20-day moving average (MA) of 11.37, above the 50-day MA of 10.43, and above the 200-day MA of 9.07, indicating a neutral trend. The MACD of 0.17 indicates Positive momentum. The RSI at 46.83 is Neutral, neither overbought nor oversold. The STOCH value of 17.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TALO.
Talos Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $1.96B | 12.13 | 6.68% | 16.87% | 9.33% | ― | |
67 Neutral | $2.51B | 50.25 | 2.62% | ― | 31.67% | ― | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
63 Neutral | $1.91B | -5.39 | -13.71% | ― | -0.02% | -473.61% | |
63 Neutral | $1.42B | -64.07 | 4.73% | 13.97% | -2.71% | -113.80% | |
61 Neutral | $556.35M | 12.37 | 2.83% | 3.64% | -22.39% | -71.57% | |
47 Neutral | $440.01M | ― | -31.42% | ― | -22.11% | -248.33% |
* Energy Sector Average
TALO
Talos Energy
10.85
1.75
19.23%
KOS
Kosmos Energy
0.91
-2.10
-69.77%
KRP
Kimbell Royalty Partners
11.45
-2.63
-18.68%
HPK
HighPeak Energy
4.39
-9.40
-68.17%
MNR
Mach Natural Resources LP
11.50
-2.15
-15.75%
BKV
BKV Corporation
26.02
4.33
19.96%
Talos Energy Corporate Events
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Talos Energy Reports Q3 2025 Financial Results
Neutral
Nov 6, 2025
On November 5, 2025, Talos Energy announced its operational and financial results for the third quarter of 2025, highlighting a production rate of 95.2 thousand barrels of oil equivalent per day and a net cash flow of $114.2 million. The company reported a net loss of $95.9 million, influenced by a $60.2 million non-cash impairment charge, but generated an adjusted free cash flow of $103.4 million, enabling significant share repurchases. Talos also announced a successful exploration discovery at the Daenerys prospect, with plans for further appraisal in 2026, and exceeded its Optimal Performance Plan target by realizing over $40 million in cash flow enhancements.
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.