Valaris (VAL) AI Stock Analysis

• Market Cap: $4.04B
• Dividend Yield: N/A
• Average Volume (3M): 1.22M
• Price to Earnings (P/E): 14.8
• Beta (1Y): 1.27
• Revenue Growth: 18.78%
• EPS Growth: -72.57%
• Country: US
• Employees: 4,130
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 1.61
• Shares Outstanding: 71,213,460
• 10 Day Avg. Volume: 1,307,252
• 30 Day Avg. Volume: 1,218,301
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 1.49
• Enterprise Value/Gross Profit: 5.71
• Enterprise Value/Ebitda: 4.95
• 1Y Price Target: $52.17
• Price Target Upside: -7.96% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

• Rating: 76 Outperform
• Price Target: $64.00 ▲(12.91% Upside)

Valaris's overall stock score of 75.9 reflects its strong financial recovery, positive technical indicators, and optimistic earnings call sentiment. The company's robust contract backlog and improved profitability are significant strengths. While the valuation is fair, the absence of a dividend yield and some operational challenges are minor concerns. Overall, Valaris is well-positioned for future growth in the oil & gas equipment & services industry.

Valaris Business Overview & Revenue Model

Company Description

Valaris Limited (VAL) is a leading provider of offshore drilling services to the energy sector, specializing in the operation of drilling rigs. The company operates a fleet of deepwater, mid-water, and jack-up rigs, catering primarily to the exploration and production needs of oil and gas companies worldwide. Valaris is involved in various segments of the offshore drilling market, including contract drilling, rig management, and associated services, positioning itself as a critical player in the global energy infrastructure.

How the Company Makes Money

Valaris generates revenue primarily through its drilling contracts with oil and gas exploration and production companies. The company's revenue model is based on day rates charged for the use of its drilling rigs, which vary depending on the rig type, contract terms, and market conditions. Key revenue streams include long-term contracts for deepwater and mid-water drilling, as well as shorter-term contracts for jack-up rigs. Additionally, Valaris offers rig management services and support services to enhance operational efficiency, contributing to its earnings. Strategic partnerships with major oil and gas companies and a focus on maintaining a modern and efficient fleet help to secure ongoing contracts and drive revenue growth.

Valaris Financial Statement Overview

Summary

Valaris has demonstrated a remarkable recovery across its financial statements. The income statement shows strong revenue growth and improved profitability. The balance sheet is stable with manageable leverage, although past fluctuations warrant caution. Cash flow metrics indicate robust cash generation and efficiency. Overall, Valaris is on a positive trajectory with significant improvements in financial health, positioning it well for future growth in the oil & gas equipment & services industry.

Income Statement

Valaris has shown a strong recovery in its income statement metrics. The TTM gross profit margin stands at 26.03%, indicating improved cost management compared to previous years. The net profit margin has also improved to 11.18% TTM, reflecting better profitability. Revenue growth is robust at 20.7% TTM, showcasing a positive trajectory. EBIT and EBITDA margins have strengthened to 24.54% and 29.99% TTM, respectively, indicating efficient operations. Overall, the income statement reflects a solid turnaround with significant growth and profitability improvements.

Balance Sheet

The balance sheet shows moderate stability. The debt-to-equity ratio is 0.50 TTM, indicating a manageable level of leverage. Return on equity is 12.40% TTM, which is a positive sign of profitability. The equity ratio is approximately 51.73% TTM, suggesting a strong equity base. However, the company has experienced fluctuations in equity and debt levels over the years, which could pose potential risks if not managed carefully.

Cash Flow

Cash flow metrics have improved significantly. The free cash flow growth rate is 185.14% TTM, indicating a strong recovery in cash generation. The operating cash flow to net income ratio is 0.87 TTM, showing good cash conversion efficiency. The free cash flow to net income ratio is 0.39 TTM, reflecting a positive trend in cash flow relative to earnings. Despite past challenges, the current cash flow position is strong and supports future growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.46B	2.36B	1.78B	1.60B	1.23B	1.43B
Gross Profit	641.10M	479.60M	139.50M	128.10M	-66.00M	-584.00M
EBITDA	738.80M	577.10M	254.20M	361.40M	-4.18B	-4.26B
Net Income	275.50M	373.40M	865.40M	176.50M	-4.49B	-4.86B
Balance Sheet
Total Assets	4.50B	4.42B	4.32B	2.86B	2.61B	12.87B
Cash, Cash Equivalents and Short-Term Investments	503.40M	368.20M	620.50M	724.10M	608.70M	325.80M
Total Debt	1.17B	1.17B	1.16B	551.80M	545.30M	15.70M
Total Liabilities	2.17B	2.18B	2.33B	1.56B	1.55B	8.50B
Stockholders Equity	2.33B	2.24B	1.99B	1.30B	1.06B	4.37B
Cash Flow
Free Cash Flow	232.50M	-99.70M	-428.60M	-79.50M	-124.90M	-345.50M
Operating Cash Flow	593.50M	355.40M	267.50M	127.50M	-66.00M	-251.70M
Investing Cash Flow	-330.70M	-452.30M	-665.80M	-16.70M	-3.70M	-42.00M
Financing Cash Flow	-156.90M	-158.30M	285.50M	-6.40M	388.70M	522.20M

Valaris Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 56.68
• 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 VAL, the sentiment is Positive. The current price of 56.68 is above the 20-day moving average (MA) of 50.43, above the 50-day MA of 50.05, and above the 200-day MA of 43.77, indicating a bullish trend. The MACD of 0.68 indicates Negative momentum. The RSI at 66.18 is Neutral, neither overbought nor oversold. The STOCH value of 84.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VAL.

Valaris Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VAL	―	$4.04B	14.76	12.23%	―	18.78%	-72.57%
WFRD	―	$5.05B	12.71	27.88%	1.49%	-10.19%	-23.74%
OII	―	$2.35B	10.32	28.92%	―	8.71%	72.09%
TDW	―	$2.44B	12.79	17.91%	―	7.76%	26.49%
NOV	―	$5.14B	11.37	7.31%	3.68%	-1.21%	-54.44%
Sector *	―	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
MRC	―	$1.23B	―	5.66%	―	-9.81%	-124.43%

Valaris Corporate Events

Valaris Secures New Contracts, Boosts Backlog to $4.5B

Valaris Limited announced new contracts and extensions, adding approximately $190 million to its contract backlog, which now totals around $4.5 billion as of October 23, 2025. Notable agreements include a five-well contract with BP Exploration in Egypt and several extensions in the UK North Sea, enhancing its operational footprint and revenue potential. Additionally, Valaris sold a jackup rig for $108 million in August 2025, reflecting strategic asset management.

The most recent analyst rating on (VAL) stock is a Buy with a $55.00 price target. To see the full list of analyst forecasts on Valaris stock, see the VAL Stock Forecast page.

Valaris Ltd Earnings Call Highlights Strong Performance

Valaris Ltd’s recent earnings call painted a picture of robust operational and financial performance, underpinned by a significant contract backlog and a positive outlook for the market. Despite some challenges such as idle periods for certain rigs and potential pressure on day rates, the overall sentiment was optimistic, with highlights significantly outweighing the lowlights.

Valaris Limited Reports Strong Q2 2025 Results

Valaris Limited, a leader in offshore drilling services, operates a high-quality fleet of ultra-deepwater drillships, semisubmersibles, and jackups across various geographies, focusing on safety, operational excellence, and innovation. In its second quarter of 2025, Valaris reported robust financial performance with a revenue efficiency of 96%, contributing to a net income of $114 million and an adjusted EBITDA of $201 million. The company secured over $1 billion in new contracts, boosting its total backlog to approximately $4.7 billion, highlighting the strength of its fleet and commercial strategy. Key financial metrics included operating revenues of $615 million, cash from operations of $120 million, and an adjusted free cash flow of $63 million. The company also agreed to sell a jackup for $108 million, reflecting strategic asset management. Looking ahead, Valaris is poised to capitalize on upcoming opportunities in the offshore drilling market, supported by its high-specification fleet and strong operational track record.

Valaris Boosts Contract Backlog with New Deals

Valaris Limited announced a significant increase in its contract backlog, rising from approximately $4.2 billion to $4.7 billion since April 30, 2025. This growth is attributed to new contracts and extensions, including a 940-day extension for the drillship VALARIS DS-16 and a new 914-day contract for VALARIS DS-18 with Anadarko Petroleum Corporation. Additionally, Valaris secured a five-well contract offshore West Africa for VALARIS DS-15 and several jackup contract extensions in Qatar and the UK North Sea. The company also plans to sell jackup VALARIS 247 for approximately $108 million, expected to close in the second half of 2025. These developments are poised to enhance Valaris’s operational capacity and market positioning in the offshore drilling sector.

The most recent analyst rating on (VAL) stock is a Sell with a $40.00 price target. To see the full list of analyst forecasts on Valaris stock, see the VAL Stock Forecast page.