Talos Energy (TALO) AI Stock Analysis

• Market Cap: $2.21B
• Dividend Yield: N/A
• Average Volume (3M): 2.23M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.92
• Revenue Growth: -0.02%
• EPS Growth: -473.61%
• Country: US
• Employees: 700
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): -0.44
• Shares Outstanding: 168,514,680
• 10 Day Avg. Volume: 2,747,167
• 30 Day Avg. Volume: 2,226,512
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.89
• Price to Sales (P/S): 1.08
• P/FCF Ratio: 4.25
• Enterprise Value/Market Cap: 1.42
• Enterprise Value/Revenue: 1.76
• Enterprise Value/Gross Profit: 21.57
• Enterprise Value/Ebitda: 3.81
• 1Y Price Target: $14.90
• Price Target Upside: 12.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): -1.55
• Revenue Forecast (FY): $1.62B

• Rating: 61 Neutral
• Price Target: $14.00 ▲(5.74% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is driven primarily by strong cash flow and improved balance-sheet positioning, reinforced by a constructive earnings-call outlook highlighting liquidity, cost advantages, and project catalysts. Offsetting these positives are pronounced recent GAAP earnings losses/impairments, mixed-to-weak near-term technicals, and limited valuation support due to a negative P/E and no stated dividend yield.

Positive Factors

Strong free cash flow generation

Consistent, materially positive operating and free cash flow (noted as very strong in 2024–2025) supports durable capital allocation flexibility: funds growth projects, debt reduction, buybacks, and hedging. This cash conversion buffers the business through oil-price cycles and funds organic development.

Improved balance sheet and liquidity

Low reported leverage and roughly $1B liquidity create lasting financial flexibility and reduce refinancing risk. A multi-year credit facility and reaffirmed borrowing base support execution of multi-year offshore projects and allow prioritization of capex, maintenance, or shareholder returns as conditions evolve.

Structural cost and efficiency advantages

A sustained ~30% lower operating cost base versus peers and recurring efficiency gains (half of $72M improvements are structural) underpin margin resilience across cycles. Structural cost advantages improve project breakevens, support returns on new developments, and enhance competitiveness for acreage and joint ventures.

Negative Factors

Earnings volatility and impairments

Sharp swing to GAAP losses and periodic ceiling-test impairments show earnings sensitivity to price and reserve valuation. This volatility complicates long-term earnings predictability, can erode equity if sustained, and may limit the reliability of reported profits for funding or dividend policy decisions.

Near-term production headwinds and guidance cut

Planned maintenance and the Genovese outage that reduce 2026 production highlight operational sensitivity. Lower near-term output can compress cash flow and delay project paybacks, testing the durability of free cash flow and potentially forcing trade-offs in capex or capital returns.

Execution and weather/service availability risk

Offshore project timelines are exposed to seasonal weather and constrained vessel/rig supply, creating real execution risk for multi-year developments. Delays shift production timing and cash flows, increase costs, and can reduce the effective pace of reserve commercialization, impacting medium-term growth.

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 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 Financial Statement Overview

Summary

Cash generation is a clear strength (very strong operating and free cash flow in 2024–2025; Cash Flow Score 78) and leverage improved versus earlier years (Balance Sheet Score 62). However, profitability deteriorated sharply with net losses in 2024 and a larger loss in 2025 alongside volatile revenue (Income Statement Score 44), raising cyclicality and earnings-quality concerns.

Income Statement

Revenue has been volatile (strong rebound in 2022 and 2024, followed by a decline in 2025), and profitability has deteriorated meaningfully: net income swung from solid profits in 2022–2023 to losses in 2024 and a much larger loss in 2025. Margins were strong in 2022–2023, but the recent return to negative earnings raises concerns about earnings quality and the sustainability of profitability through the cycle.

Balance Sheet

Leverage has improved versus earlier years: debt-to-equity was high in 2020–2021 but moved to a more moderate level in 2022–2024, and equity remains substantial. However, equity fell in 2025 alongside losses, and total debt remains sizable, which limits flexibility if weaker earnings persist.

Cash Flow

Cash generation is a key strength: operating cash flow and free cash flow are very strong and have grown materially over the last several years, with particularly high levels in 2024–2025. The main risk is the disconnect between cash flow strength and net losses in 2024–2025, which could prove cyclical or working-capital driven and should be monitored for durability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.78B	1.97B	1.46B	1.65B	1.24B
Gross Profit	51.36M	382.59M	402.28M	925.77M	561.58M
EBITDA	740.47M	1.26B	1.05B	966.11M	402.67M
Net Income	-496.36M	-76.39M	187.33M	381.92M	-182.95M
Balance Sheet
Total Assets	5.55B	6.19B	4.82B	3.06B	2.77B
Cash, Cash Equivalents and Short-Term Investments	362.81M	108.17M	33.64M	44.15M	69.85M
Total Debt	1.24B	1.24B	1.20B	602.14M	980.77M
Total Liabilities	3.38B	3.43B	2.66B	1.89B	2.01B
Stockholders Equity	2.17B	2.76B	2.16B	1.17B	760.65M
Cash Flow
Free Cash Flow	453.92M	962.59M	506.70M	386.57M	118.06M
Operating Cash Flow	935.83M	962.59M	519.07M	709.74M	411.39M
Investing Cash Flow	-546.75M	-1.32B	-512.63M	-311.98M	-293.75M
Financing Cash Flow	-164.52M	436.12M	85.41M	-423.47M	-82.02M

Talos Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.24
• 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 TALO, the sentiment is Positive. The current price of 13.24 is above the 20-day moving average (MA) of 12.76, above the 50-day MA of 11.87, and above the 200-day MA of 10.02, indicating a bullish trend. The MACD of 0.23 indicates Positive momentum. The RSI at 55.44 is Neutral, neither overbought nor oversold. The STOCH value of 72.00 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	81 Outperform	$2.17B	-11.69	6.68%	17.48%	9.33%	―
KRP	73 Outperform	$1.78B	11.74	12.36%	13.84%	-2.71%	-113.80%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
TALO	61 Neutral	$2.21B	-3.89	-20.06%	―	-0.02%	-473.61%
BKV	61 Neutral	$3.05B	14.44	9.58%	―	31.67%	―
HPK	56 Neutral	$695.75M	-12.03	2.83%	3.71%	-22.39%	-71.57%
KOS	48 Neutral	$1.22B	―	-80.95%	―	-22.11%	-248.33%

Talos Energy Corporate Events

Talos Energy Reports 2025 Results and Operational Progress

Talos Energy reported its fourth-quarter and full-year 2025 results on February 24, 2026, highlighting average production of 89.2 thousand barrels of oil equivalent per day in the quarter and 94.6 thousand barrels per day for the year, along with adjusted EBITDA of $240.1 million for the quarter and $1.2 billion for 2025. Despite generating $417.7 million in adjusted free cash flow in 2025 and strengthening its balance sheet with low leverage and $362.8 million in cash, the company posted a full-year net loss of $494.3 million driven largely by $454.5 million of non-cash ceiling test impairments.

Operationally, Talos advanced key Gulf of Mexico projects, including expanding throughput at its Tarantula facility to a record 38 thousand barrels of oil equivalent per day, bringing the Cardona well online under budget in early 2026, and successfully drilling the CPN well with first production expected in the second half of 2026. The company also reported a significant discovery at the Daenerys prospect in August 2025, was named apparent high bidder on 11 new Gulf of America leases in December 2025, and retained a strategic role in the Zama project offshore Mexico as operator responsibilities shifted to Harbour Energy.

Talos intensified capital returns in 2025 by repurchasing 12.6 million shares for $119.1 million, equivalent to roughly 29% of annual free cash flow and reducing its share count by about 7%, while leaving $81 million remaining under its authorization at year-end. The company simultaneously launched and outperformed its Optimal Performance Plan for Cash Flow Enhancements, delivering $72 million versus a $25 million 2025 target and positioning itself to meet a $100 million target in 2026, and extended its $700 million credit facility maturity to 2030, reinforcing liquidity as it executes its offshore-focused growth strategy.

The most recent analyst rating on (TALO) stock is a Buy with a $13.00 price target. To see the full list of analyst forecasts on Talos Energy stock, see the TALO Stock Forecast page.

Talos Energy Strengthens Liquidity With New Credit Agreement

On January 20, 2026, Talos Energy Inc. and its subsidiaries entered into an amended and restated credit agreement that replaces a 2018 facility, reaffirming a $700 million borrowing base, including a $250 million letter of credit sublimit, with commitments maturing as late as January 20, 2030 subject to certain refinancing conditions on existing senior secured notes. The facility, led by JPMorgan Chase Bank, features variable-rate borrowing options tied to base rate and SOFR benchmarks, semi-annual borrowing base redeterminations, financial maintenance covenants on leverage and liquidity, asset-backed security over at least 85% of proved oil and natural gas assets, and mandatory hedging requirements, collectively reinforcing Talos’s liquidity, constraining leverage and capital returns, and signaling lender confidence in its asset base and long-term strategy following the January 21, 2026 announcement.

The most recent analyst rating on (TALO) stock is a Buy with a $11.00 price target. To see the full list of analyst forecasts on Talos Energy stock, see the TALO Stock Forecast page.

Talos Energy Extends Key Cooperation Agreement

On December 8, 2025, Talos Energy Inc. extended its Cooperation Agreement with Control Empresarial de Capitales, S.A. de C.V., a company controlled by Carlos Slim’s family, to December 16, 2026. This extension signifies continued collaboration with a significant stakeholder that holds more than 5% of Talos Energy’s voting securities, potentially impacting the company’s strategic operations and market positioning.

The most recent analyst rating on (TALO) stock is a Buy with a $13.50 price target. To see the full list of analyst forecasts on Talos Energy stock, see the TALO Stock Forecast page.