We assign a fundamental rating of 3 out of 10 to BORR. BORR was compared to 61 industry peers in the Energy Equipment & Services industry. While BORR is still in line with the averages on profitability rating, there are concerns on its financial health. BORR does not seem to be growing, but still is valued expensively.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year BORR was profitable.
BORR had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: BORR reported negative net income in multiple years.
The reported operating cash flow has been mixed in the past 5 years: BORR reported negative operating cash flow in multiple years.

1.2 Ratios

BORR has a Return On Assets (2.05%) which is comparable to the rest of the industry.
BORR has a Return On Equity (6.34%) which is comparable to the rest of the industry.
BORR has a better Return On Invested Capital (9.03%) than 70.49% of its industry peers.
The Average Return On Invested Capital over the past 3 years for BORR is significantly below the industry average of 12.88%.
The last Return On Invested Capital (9.03%) for BORR is above the 3 year average (5.99%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	2.05%
ROE	6.34%
ROIC	9.03%

ROA(3y)-2.21%

ROA(5y)-4.51%

ROE(3y)-7.37%

ROE(5y)-14.65%

ROIC(3y)5.99%

ROIC(5y)N/A

1.3 Margins

Looking at the Profit Margin, with a value of 7.06%, BORR is in the better half of the industry, outperforming 72.13% of the companies in the same industry.
BORR has a better Operating Margin (34.72%) than 98.36% of its industry peers.

		Industry Rank	Sector Rank
OM	34.72%
PM (TTM)	7.06%
GM	N/A

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3YN/A

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), BORR is destroying value.
The number of shares outstanding for BORR has been reduced compared to 1 year ago.
BORR has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, BORR has a worse debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 1.32, we must say that BORR is in the distress zone and has some risk of bankruptcy.
BORR's Altman-Z score of 1.32 is on the low side compared to the rest of the industry. BORR is outperformed by 63.93% of its industry peers.
BORR has a Debt/Equity ratio of 1.70. This is a high value indicating a heavy dependency on external financing.
BORR has a Debt to Equity ratio of 1.70. This is amonst the worse of the industry: BORR underperforms 81.97% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.7
Debt/FCF	N/A
Altman-Z	1.32

ROIC/WACC0.89

WACC10.19%

2.3 Liquidity

BORR has a Current Ratio of 1.63. This is a normal value and indicates that BORR is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of BORR (1.63) is worse than 65.57% of its industry peers.
A Quick Ratio of 1.63 indicates that BORR should not have too much problems paying its short term obligations.
With a decent Quick ratio value of 1.63, BORR is doing good in the industry, outperforming 60.66% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.63
Quick Ratio	1.63

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

BORR shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.18%.
The Revenue has been growing slightly by 5.83% in the past year.
Measured over the past years, BORR shows a very strong growth in Revenue. The Revenue has been growing by 24.78% on average per year.

EPS 1Y (TTM)-18.18%

EPS 3YN/A

EPS 5YN/A

EPS Q2Q%150%

Revenue 1Y (TTM)5.83%

Revenue growth 3Y60.31%

Revenue growth 5Y24.78%

Sales Q2Q%14.69%

3.2 Future

Based on estimates for the next years, BORR will show a decrease in Earnings Per Share. The EPS will decrease by -8.80% on average per year.
The Revenue is expected to grow by 4.14% on average over the next years.

EPS Next Y-54.78%

EPS Next 2Y-48.09%

EPS Next 3Y-8.8%

EPS Next 5YN/A

Revenue Next Year0.59%

Revenue Next 2Y0.25%

Revenue Next 3Y4.14%

Revenue Next 5YN/A

3.3 Evolution

The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 17.33, BORR is valued on the expensive side.
BORR's Price/Earnings ratio is rather cheap when compared to the industry. BORR is cheaper than 80.33% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.32, BORR is valued a bit cheaper.
The Forward Price/Earnings Ratio is negative for BORR. No positive earnings are expected for the next year.

		Industry Rank	Sector Rank
PE	17.33
Fwd PE	N/A

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, BORR is valued a bit cheaper than the industry average as 70.49% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	6.31

4.3 Compensation for Growth

A cheap valuation may be justified as BORR's earnings are expected to decrease with -8.80% in the coming years.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y-48.09%

EPS Next 3Y-8.8%

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5. Dividend

5.1 Amount

BORR has a yearly dividend return of 0.43%, which is pretty low.
Compared to an average industry Dividend Yield of 1.12, BORR has a dividend in line with its industry peers.
With a Dividend Yield of 0.43, BORR pays less dividend than the S&P500 average, which is at 1.83.

		Industry Rank	Sector Rank
Dividend Yield	0.43%

5.2 History

BORR is new to the dividend game and has less than 3 years of track record.

Dividend Growth(5Y)N/A

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

BORR pays out 13.00% of its income as dividend. This is a sustainable payout ratio.

DP13%

EPS Next 2Y-48.09%

EPS Next 3Y-8.8%

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BORR DRILLING LTD / BORR FAQ

What is the fundamental rating for BORR stock?

ChartMill assigns a fundamental rating of 3 / 10 to BORR.

What is the valuation status for BORR stock?

ChartMill assigns a valuation rating of 2 / 10 to BORR DRILLING LTD (BORR). This can be considered as Overvalued.

What is the profitability of BORR stock?

BORR DRILLING LTD (BORR) has a profitability rating of 4 / 10.

Can you provide the PE and PB ratios for BORR stock?

The Price/Earnings (PE) ratio for BORR DRILLING LTD (BORR) is 17.33 and the Price/Book (PB) ratio is 1.17.

What is the financial health of BORR DRILLING LTD (BORR) stock?

The financial health rating of BORR DRILLING LTD (BORR) is 2 / 10.