Valaris (VAL) AI Stock Analysis

• Market Cap: $4.10B
• Dividend Yield: N/A
• Average Volume (3M): 915.52K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 1.32
• Revenue Growth: 6.81%
• EPS Growth: -61.94%
• Country: US
• Employees: 4,130
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 2.65
• Shares Outstanding: 69,577,280
• 10 Day Avg. Volume: 784,979
• 30 Day Avg. Volume: 915,518
• PEG Ratio: -0.15
• Price to Book (P/B): 1.42
• Price to Sales (P/S): 1.35
• P/FCF Ratio: -31.99
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 1.64
• Enterprise Value/Gross Profit: 5.04
• Enterprise Value/Ebitda: 4.93
• 1Y Price Target: $56.86
• Price Target Upside: -1.35% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: $67.00 ▲(16.24% Upside)

Valaris demonstrates strong financial performance and technical indicators, supported by a positive earnings call. The company's strategic contract awards and operational efficiency contribute to its robust position in the industry. Valuation metrics suggest potential undervaluation, enhancing its attractiveness to investors.

Positive Factors

Strong Contract Backlog

A robust contract backlog of $4.5 billion ensures revenue visibility and stability, supporting long-term financial health and operational planning.

Operational Efficiency

High revenue efficiency and disciplined fleet management enhance profitability and demonstrate operational excellence, crucial for sustaining competitive advantage.

Offshore Drilling Demand

Growing demand for offshore drilling, particularly in deepwater regions, supports Valaris's high-specification fleet, driving future growth and market positioning.

Negative Factors

Decreased Revenue and EBITDA

Declining revenue and EBITDA indicate potential challenges in maintaining growth momentum, impacting profitability and financial performance.

Commodity Price Uncertainty

Commodity price volatility can affect demand for drilling services, posing risks to revenue stability and financial forecasts.

Operational Continuity Challenges

Idle drillships highlight challenges in maintaining continuous operations, potentially affecting revenue generation and asset utilization.

Valaris Business Overview & Revenue Model

Company Description

Valaris Limited provides offshore contract drilling services to the international oil and gas industry. The company owns an offshore drilling rig fleet of 56 rigs, which include 11 drillships, 4 dynamically positioned semisubmersible rigs, 1 moored semisubmersible rig, and 40 jackup rigs. It serves international, government-owned, and independent oil and gas companies in the Gulf of Mexico, the North Sea, the Middle East, West Africa, Australia, and Southeast Asia. The company was incorporated in 2009 and is based in Hamilton, Bermuda.

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 strong profitability and a stable balance sheet, with effective debt management and improved return on equity. However, there is room for improvement in free cash flow conversion.

Income Statement

Valaris has shown a strong recovery in its income statement metrics over the years. The TTM data indicates a healthy gross profit margin of 20.36% and a net profit margin of 16.51%, reflecting improved profitability. Despite a slight decline in revenue growth rate recently, the company has maintained robust EBIT and EBITDA margins, indicating operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.44 in the TTM period. The return on equity has improved to 17.30%, showcasing effective use of equity to generate profits. The equity ratio is strong, indicating a solid capital structure, although the company has experienced fluctuations in debt levels over the years.

Cash Flow

Valaris has demonstrated positive cash flow trends with a 7.40% growth in free cash flow in the TTM period. The operating cash flow to net income ratio of 0.83 suggests efficient cash generation relative to net income. However, the free cash flow to net income ratio indicates room for improvement in converting profits into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.42B	2.36B	1.78B	1.60B	1.23B	1.43B
Gross Profit	784.40M	601.70M	240.60M	219.30M	164.50M	-43.20M
EBITDA	802.20M	487.80M	142.20M	154.80M	89.70M	-118.90M
Net Income	399.00M	373.40M	865.40M	176.50M	-4.49B	-4.86B
Balance Sheet
Total Assets	4.64B	4.42B	4.32B	2.86B	2.60B	12.87B
Cash, Cash Equivalents and Short-Term Investments	662.70M	368.20M	620.50M	724.10M	608.70M	325.80M
Total Debt	1.16B	1.17B	1.16B	565.60M	555.30M	15.70M
Total Liabilities	2.19B	2.18B	2.33B	1.56B	1.53B	8.50B
Stockholders Equity	2.45B	2.24B	1.99B	1.29B	1.07B	4.37B
Cash Flow
Free Cash Flow	249.70M	-99.70M	-428.60M	-80.00M	-124.90M	-345.50M
Operating Cash Flow	598.60M	355.40M	267.50M	127.00M	-66.00M	-251.70M
Investing Cash Flow	-210.00M	-452.30M	-665.80M	-16.70M	-3.70M	-42.00M
Financing Cash Flow	-105.30M	-158.30M	285.50M	-6.40M	388.70M	522.20M

Valaris Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 57.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 57.64 is above the 20-day moving average (MA) of 56.98, above the 50-day MA of 54.42, and above the 200-day MA of 45.40, indicating a bullish trend. The MACD of 1.25 indicates Negative momentum. The RSI at 53.77 is Neutral, neither overbought nor oversold. The STOCH value of 53.51 is Neutral, 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
TDW	78 Outperform	$2.83B	19.62	13.43%	―	4.42%	-13.55%
VAL	76 Outperform	$4.10B	10.28	17.49%	―	6.81%	-61.94%
OII	73 Outperform	$2.74B	11.94	28.92%	―	8.71%	72.09%
WFRD	72 Outperform	$5.75B	14.46	27.88%	1.23%	-10.19%	-23.74%
NOV	72 Outperform	$5.81B	15.92	5.93%	3.08%	-1.43%	-63.13%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
MRC	45 Neutral	―	―	0.28%	―	-10.96%	-169.10%

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.