TALOS ENERGY INC (TALO) Stock Fundamental Analysis
NYSE:TALO - New York Stock Exchange, Inc. - US87484T1088 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to TALO. TALO was compared to 211 industry peers in the Oil, Gas & Consumable Fuels industry. While TALO seems to be doing ok healthwise, there are quite some concerns on its profitability. TALO has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
TALO had positive earnings in the past year.
In the past year TALO had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: TALO reported negative net income in multiple years.
Each year in the past 5 years TALO had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.43%, TALO is doing worse than 65.88% of the companies in the same industry.
Looking at the Return On Equity, with a value of 0.96%, TALO is doing worse than 63.51% of the companies in the same industry.
With a Return On Invested Capital value of 1.94%, TALO is not doing good in the industry: 69.67% of the companies in the same industry are doing better.
The Average Return On Invested Capital over the past 3 years for TALO is significantly below the industry average of 23.79%.
The 3 year average ROIC (10.34%) for TALO is well above the current ROIC(1.94%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.43% | ||
| ROE | 0.96% | ||
| ROIC | 1.94% |
ROA(3y)5.05%
ROA(5y)-1.58%
ROE(3y)12.9%
ROE(5y)-7.12%
ROIC(3y)10.34%
ROIC(5y)N/A
1.3 Margins
The Profit Margin of TALO (1.27%) is worse than 63.98% of its industry peers.
Looking at the Operating Margin, with a value of 6.52%, TALO is doing worse than 65.40% of the companies in the same industry.
In the last couple of years the Operating Margin of TALO has declined.
Looking at the Gross Margin, with a value of 72.79%, TALO belongs to the top of the industry, outperforming 83.89% of the companies in the same industry.
TALO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.52% | ||
| PM (TTM) | 1.27% | ||
| GM | 72.79% |
OM growth 3Y-44.48%
OM growth 5Y-25.79%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-2.53%
GM growth 5Y-0.5%
2. Health
2.1 Basic Checks
TALO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, TALO has more shares outstanding
The number of shares outstanding for TALO has been increased compared to 5 years ago.
TALO has a better debt/assets ratio than last year.
2.2 Solvency
TALO has an Altman-Z score of 0.60. This is a bad value and indicates that TALO is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of TALO (0.60) is worse than 63.98% of its industry peers.
The Debt to FCF ratio of TALO is 2.10, which is a good value as it means it would take TALO, 2.10 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.10, TALO belongs to the top of the industry, outperforming 82.94% of the companies in the same industry.
A Debt/Equity ratio of 0.49 indicates that TALO is not too dependend on debt financing.
The Debt to Equity ratio of TALO (0.49) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.1 | ||
| Altman-Z | 0.6 |
ROIC/WACC0.19
WACC10.48%
2.3 Liquidity
A Current Ratio of 1.05 indicates that TALO should not have too much problems paying its short term obligations.
The Current ratio of TALO (1.05) is comparable to the rest of the industry.
A Quick Ratio of 1.05 indicates that TALO should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.05, TALO perfoms like the industry average, outperforming 56.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
The earnings per share for TALO have decreased strongly by -70.00% in the last year.
Looking at the last year, TALO shows a very strong growth in Revenue. The Revenue has grown by 31.40%.
Measured over the past years, TALO shows a quite strong growth in Revenue. The Revenue has been growing by 16.79% on average per year.
EPS 1Y (TTM)-70%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%146.15%
Revenue 1Y (TTM)31.4%
Revenue growth 3Y16.61%
Revenue growth 5Y16.79%
Sales Q2Q%19.33%
3.2 Future
Based on estimates for the next years, TALO will show a very negative growth in Earnings Per Share. The EPS will decrease by -65.39% on average per year.
TALO is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.98% yearly.
EPS Next Y-455.64%
EPS Next 2Y-193.1%
EPS Next 3Y-101.3%
EPS Next 5Y-65.39%
Revenue Next Year-7.98%
Revenue Next 2Y-5.01%
Revenue Next 3Y-3.67%
Revenue Next 5Y-1.98%
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 304.33, the valuation of TALO can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of TALO indicates a slightly more expensive valuation: TALO is more expensive than 69.19% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.47, TALO is valued quite expensively.
TALO is expected to report negative earnings next year, which makes the Forward Price/Earnings Ratio negative.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 304.33 | ||
| Fwd PE | N/A |
4.2 Price Multiples
TALO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. TALO is cheaper than 95.73% of the companies in the same industry.
TALO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TALO is cheaper than 96.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.54 | ||
| EV/EBITDA | 2.01 |
4.3 Compensation for Growth
TALO's earnings are expected to decrease with -101.30% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-193.1%
EPS Next 3Y-101.3%
5. Dividend
5.1 Amount
No dividends for TALO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
9.13
+0.1 (+1.11%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners72.22%
Inst Owner Change0%
Ins Owners0.59%
Ins Owner Change1.4%
Market Cap1.63B
Analysts81.05
Price Target13.07 (43.15%)
Short Float %10.81%
Short Ratio4.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)297.23%
Min EPS beat(2)163.52%
Max EPS beat(2)430.93%
EPS beat(4)3
Avg EPS beat(4)148.4%
Min EPS beat(4)-124.09%
Max EPS beat(4)430.93%
EPS beat(8)3
Avg EPS beat(8)50.57%
EPS beat(12)4
Avg EPS beat(12)21.11%
EPS beat(16)5
Avg EPS beat(16)-228.95%
Revenue beat(2)1
Avg Revenue beat(2)-1.16%
Min Revenue beat(2)-3.13%
Max Revenue beat(2)0.82%
Revenue beat(4)2
Avg Revenue beat(4)0.39%
Min Revenue beat(4)-3.13%
Max Revenue beat(4)4.03%
Revenue beat(8)3
Avg Revenue beat(8)-0.25%
Revenue beat(12)6
Avg Revenue beat(12)2.43%
Revenue beat(16)10
Avg Revenue beat(16)6.12%
PT rev (1m)0.93%
PT rev (3m)-19.89%
EPS NQ rev (1m)-10.09%
EPS NQ rev (3m)-54.17%
EPS NY rev (1m)-4.92%
EPS NY rev (3m)-9.03%
Revenue NQ rev (1m)-1.2%
Revenue NQ rev (3m)-4.8%
Revenue NY rev (1m)-0.22%
Revenue NY rev (3m)-2.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 304.33 | ||
| Fwd PE | N/A | ||
| P/S | 0.79 | ||
| P/FCF | 2.54 | ||
| P/OCF | 1.44 | ||
| P/B | 0.6 | ||
| P/tB | 0.6 | ||
| EV/EBITDA | 2.01 |
EPS(TTM)0.03
EY0.33%
EPS(NY)-1.37
Fwd EYN/A
FCF(TTM)3.6
FCFY39.44%
OCF(TTM)6.36
OCFY69.62%
SpS11.52
BVpS15.3
TBVpS15.3
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.43% | ||
| ROE | 0.96% | ||
| ROCE | 2.46% | ||
| ROIC | 1.94% | ||
| ROICexc | 2.03% | ||
| ROICexgc | 2.03% | ||
| OM | 6.52% | ||
| PM (TTM) | 1.27% | ||
| GM | 72.79% | ||
| FCFM | 31.24% |
ROA(3y)5.05%
ROA(5y)-1.58%
ROE(3y)12.9%
ROE(5y)-7.12%
ROIC(3y)10.34%
ROIC(5y)N/A
ROICexc(3y)10.62%
ROICexc(5y)N/A
ROICexgc(3y)10.62%
ROICexgc(5y)N/A
ROCE(3y)13.08%
ROCE(5y)N/A
ROICexcg growth 3Y-52.56%
ROICexcg growth 5Y-27.88%
ROICexc growth 3Y-52.56%
ROICexc growth 5Y-27.88%
OM growth 3Y-44.48%
OM growth 5Y-25.79%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-2.53%
GM growth 5Y-0.5%
F-Score9
Asset Turnover0.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 2.1 | ||
| Debt/EBITDA | 0.99 | ||
| Cap/Depr | 40.64% | ||
| Cap/Sales | 23.91% | ||
| Interest Coverage | 1 | ||
| Cash Conversion | 84.39% | ||
| Profit Quality | 2454.61% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 1.05 | ||
| Altman-Z | 0.6 |
F-Score9
WACC10.48%
ROIC/WACC0.19
Cap/Depr(3y)63.27%
Cap/Depr(5y)68.41%
Cap/Sales(3y)28.24%
Cap/Sales(5y)34.26%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-70%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%146.15%
EPS Next Y-455.64%
EPS Next 2Y-193.1%
EPS Next 3Y-101.3%
EPS Next 5Y-65.39%
Revenue 1Y (TTM)31.4%
Revenue growth 3Y16.61%
Revenue growth 5Y16.79%
Sales Q2Q%19.33%
Revenue Next Year-7.98%
Revenue Next 2Y-5.01%
Revenue Next 3Y-3.67%
Revenue Next 5Y-1.98%
EBIT growth 1Y-42.18%
EBIT growth 3Y-35.26%
EBIT growth 5Y-13.32%
EBIT Next Year672.28%
EBIT Next 3Y90.66%
EBIT Next 5Y48.01%
FCF growth 1Y131.14%
FCF growth 3Y56.61%
FCF growth 5YN/A
OCF growth 1Y72.14%
OCF growth 3Y32.76%
OCF growth 5Y19.58%