Talos Energy (TALO) AI Stock Analysis

• Market Cap: $1.43B
• Dividend Yield: N/A
• Average Volume (3M): 1.74M
• Price to Earnings (P/E): 56.3
• Beta (1Y): 0.94
• Revenue Growth: 31.40%
• EPS Growth: 92.89%
• Country: US
• Employees: 700
• Sector: Energy
• Sector Strength: 42
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.06
• Shares Outstanding: 178,455,140
• 10 Day Avg. Volume: 1,437,774
• 30 Day Avg. Volume: 1,741,018
• PEG Ratio: 0.19
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.78
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $12.22
• Price Target Upside: 51.99% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 71 Outperform
• Price Target: $9.00 ▲(11.94%Upside)

Talos Energy's overall score reflects a strong earnings call performance and strategic acquisition enhancing market position, tempered by valuation concerns and moderate technical momentum. Financially, the company is robust, particularly in cash flow and operational efficiency, but faces profitability challenges.

Positive Factors

Drilling success

The announcement of successful drilling results from Katmai West 2 is expected to allow for production in line with pre-drill estimates and is anticipated to have a favorable reaction.

Operational performance

Continued execution strength in operations and efficiencies with the West Vela rig can drive increased investor confidence in the stock.

Shareholder returns

An increase in cash return via the buyback is expected as the company has reached its debt target, suggesting a positive outlook for shareholder returns.

Negative Factors

Free cash flow

A cautious view of oil fundamentals and a less attractive free cash flow profile at current strip prices keep the recommendation at Neutral.

Leadership changes

The recent departure of interim CEO Mr. Mills that followed the exit of founder-CEO Mr. Duncan in August 2024 has increased investor concerns about the strategic outlook for the company.

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 sale of oil, natural gas, and natural gas liquids that it extracts from its properties. The company's revenue model centers around the exploration and production of hydrocarbon resources, which are sold to refineries, utilities, and other market participants. Key revenue streams include income from the sale of oil and gas extracted from both their developed and undeveloped reserves. Talos Energy also engages in strategic partnerships and joint ventures to enhance its operational capabilities and expand its resource base, which can contribute to its earnings by sharing costs and leveraging combined expertise. Additionally, the company may engage in hedging activities to manage market risks and stabilize cash flows.

Talos Energy Financial Statement Overview

Summary

Talos Energy shows strong revenue growth and cash flow generation, crucial for sustaining operations and funding future growth. However, challenges with profitability and return on equity may impact long-term value creation. Maintaining revenue growth while improving cost controls and profitability will be key to enhancing financial health.

Income Statement

Talos Energy has shown a robust revenue growth rate of 35.3% from 2023 to 2024, indicating a strong upward trajectory in its revenue generation. However, the net profit margin is negative at -3.87%, reflecting a current struggle with profitability despite a high gross profit margin of 100%. This suggests efficiency in production but challenges in controlling other expenses.

Balance Sheet

The balance sheet highlights a stable equity position with a debt-to-equity ratio of 0.45, indicating manageable leverage. The equity ratio stands at 44.57%, suggesting a strong equity base relative to total assets. However, the company's return on equity is negative at -2.77%, pointing toward inefficiencies in generating returns for shareholders.

Cash Flow

Talos Energy has achieved significant free cash flow growth, moving from negative free cash flow in 2023 to a positive $962 million in 2024, indicating improved cash management. The operating cash flow to net income ratio is high at 12.60, reflecting strong cash generation relative to accounting profits.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.97B	1.46B	1.65B	1.24B	575.94M
	Gross Profit
382.59M	402.28M	925.77M	561.58M	-36.03M
	EBIT
172.93M	209.79M	736.12M	374.62M	-150.38M
	EBITDA
1.26B	1.05B	966.11M	402.67M	83.48M
	Net Income Common Stockholders
-76.39M	187.33M	381.92M	-182.95M	-465.61M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
108.17M	33.64M	44.15M	69.85M	34.23M
	Total Assets
6.19B	4.82B	3.06B	2.77B	2.83B
	Total Debt
1.24B	1.20B	602.14M	980.77M	1.01B
	Net Debt
1.13B	1.16B	557.99M	910.92M	971.63M
	Total Liabilities
3.43B	2.66B	1.89B	2.01B	1.91B
	Stockholders Equity
2.76B	2.16B	1.17B	760.65M	926.60M
Cash Flow		Free Cash Flow
962.59M	-54.73M	386.57M	118.06M	-61.02M
	Operating Cash Flow
962.59M	519.07M	709.74M	411.39M	301.92M
	Investing Cash Flow
-1.32B	-512.63M	-311.98M	-293.75M	-678.90M
	Financing Cash Flow
436.12M	85.41M	-423.47M	-82.02M	324.19M

Talos Energy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.04
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 8.04 is above the 20-day moving average (MA) of 8.01, above the 50-day MA of 7.96, and below the 200-day MA of 9.74, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 51.83 is Neutral, neither overbought nor oversold. The STOCH value of 54.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TALO.

Talos Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BTU	80 Outperform	$1.67B	4.93	10.33%	2.28%	-7.42%	-26.06%
HPK	76 Outperform	$1.26B	11.25	7.09%	1.62%	-11.59%	-28.62%
TALO	71 Outperform	$1.43B	56.34	0.95%	―	31.40%	92.89%
HLX	66 Neutral	$937.97M	11.28	5.64%	―	0.34%	―
AESI	60 Neutral	$1.50B	39.54	2.90%	7.24%	77.72%	-75.78%
Sector *	57 Neutral	$7.07B	2.93	-3.47%	5.76%	0.66%	-50.70%
BKV	51 Neutral	$1.85B	―	-13.36%	―	2.24%	-919.48%

Talos Energy Corporate Events

Talos Energy Enhances Market Position with Acquisition

On March 4, 2024, Talos Energy completed the acquisition of QuarterNorth Energy, a privately-held exploration and production company, for a total consideration of $1,247.4 million in cash and 24.3 million shares of Talos’s common stock valued at $322.6 million. The acquisition was financed through a combination of bank credit facility borrowings, an equity offering, and a debt offering, which included the issuance of new senior secured notes. This strategic acquisition is expected to enhance Talos’s operational scale and market position in the Gulf of Mexico, potentially offering significant benefits to stakeholders.

The most recent analyst rating on (TALO) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Talos Energy stock, see the TALO Stock Forecast page.

Talos Energy Announces CFO Resignation and Replacement

On May 19, 2025, Talos Energy announced the resignation of Sergio L. Maiworm Jr. as Executive Vice President and CFO, effective June 27, 2025, and the appointment of Gregory M. Babcock as Interim CFO starting June 28, 2025. Babcock, who has been with Talos since 2014, will report directly to the CEO. The leadership change is not related to any financial reporting issues, and the company reaffirms its production and financial guidance for 2025.

The most recent analyst rating on (TALO) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Talos Energy stock, see the TALO Stock Forecast page.

Talos Energy Reports Q1 2025 Results, Net Loss $9.9M

On May 5, 2025, Talos Energy announced its first quarter 2025 operational and financial results, reporting a production rate of 100.9 MBoe/d and a net loss of $9.9 million. The company completed well operations on the Sunspear discovery and initiated operations on the Katmai West #2 well, with both expected to begin production by late second quarter 2025. Talos maintained a strong balance sheet with significant cash reserves and an undrawn credit facility, allowing flexibility in capital budgeting and share repurchase plans. The company also increased its interest in the Monument discovery and plans to commence drilling on the Daenerys prospect, highlighting its strategic focus on expanding resource potential.