One-glance verdict
Within fair range
$2.42 our estimate vs market $4.44
Wall Street consensus: $4.97 (105.2% higher than our fair-value estimate)
83% above our estimate
Fundamentals snapshot
Borr Drilling Limited
BORR · NYQ · Energy · Oil & Gas Drilling
Current price
$4.44
52-week range
$2.60 - $6.66
Market cap
$1.37B
Balance sheet
Stretched
1.48x Concerning
Net debt $2.26B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Revenue grew 1.0% last year.
- Reward Free cash flow was positive in 1/10 years.
- Risk Return on equity was -24.7% last year — the company lost money on shareholders' equity.
- Risk Net debt grew 15.8% over 3 years.
What this company does
Borr Drilling Limited
Borr Drilling owns and operates large drilling platforms that stand on the shallow seafloor, called jack-up rigs. The company makes its money by leasing these rigs and their work crews to oil and gas companies for exploring and drilling around the world. Because its business depends on drilling activity, the company's financial success is often tied to the global price of oil and the demand for energy.
How the company got here
Borr Drilling was founded in 2016 during a downturn in the offshore drilling industry. The company took a counter-cyclical approach, meaning they invested heavily when others were pulling back. They strategically acquired modern offshore drilling platforms, called jack-up rigs, from other companies like Transocean and Noble Corporation. This allowed them to build a large and young fleet of premium rigs at a lower cost. After a challenging period, the market for offshore drilling began to recover, and Borr Drilling was well-positioned with its modern fleet to meet the new demand.
What it actually does
Borr Drilling is an offshore drilling contractor, which means they own and operate drilling rigs that are hired by oil and gas companies. Think of them as a specialized rental service for the energy industry. Their main product is providing a fully operational drilling unit, complete with trained crews, safety systems, and maintenance, to explore for and produce oil and gas in shallow waters. Their customers, which include large integrated oil companies and state-owned national oil companies, pay a daily fee, known as a dayrate, for the use of these rigs and services.
Contract Drilling Services
The company's primary and essentially only business is providing shallow-water drilling services using its fleet of jack-up rigs. These are mobile offshore drilling platforms with retractable legs that can be lowered to the seabed, raising the platform above the water. Oil and gas companies hire Borr Drilling to perform a range of services, from initial exploration drilling to ongoing production support and eventually plugging and abandoning old wells. This single segment of renting out their rigs and crews generates all of the company's revenue.
What management is betting on now
Management's strategy is focused on maximizing the use of their modern fleet of jack-up rigs in key shallow-water regions like the Middle East, Southeast Asia, and West Africa. They aim to secure long-term contracts for their rigs at increasingly higher dayrates (the daily rental fee for a rig) as the market for offshore drilling improves. A key part of their plan is to use the cash generated from these operations to strengthen their balance sheet (a snapshot of the company's financial health) and eventually return money to their shareholders. They are also focused on maintaining operational excellence and strong customer relationships to be the preferred provider of these specialized drilling services.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$1.02B
Net income
$45.00M
Diluted EPS
0.17
Operating cash flow
$251.90M
Free cash flow
—
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Sources
Revenue
$1.01B
Net income
$82.10M
Diluted EPS
0.32
Operating cash flow
$77.30M
Free cash flow
—
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Sources
Is it cheap or expensive?
Fair value $2.42 vs current price $4.44
Wall Street consensus is the average analyst price target: $4.97 (105.2% higher than our fair-value estimate).
Our most-likely fair value is $2.42 a share — about 45.5% away from today's price of $4.44, so the stock currently looks fairly priced.
Is it drowning in debt?
Stretched
Net debt $2.3B. Interest coverage 1.5x.
Net debt
$2.26B
Interest coverage
1.48x
Borr Drilling Limited's profit covers its interest bill about 1.5 times over. which is stronger than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
BORR
BASELINE
Borr Drilling Limited
Total debt $2.49B Interest coverage 1.48x This is the baseline the peer rows are being compared against.
Total debt $2.13B Interest coverage 1.22x -17% vs BORR Carries about 1.2x less debt cushion than BORR.
Total debt $494.09M Interest coverage 1.83x +24% vs BORR Carries about 1.2x more debt cushion than BORR.
Total debt $1.91B Interest coverage 3.17x +115% vs BORR Carries about 2.1x more debt cushion than BORR.
Total debt $1.17B Interest coverage 5.02x +240% vs BORR Carries about 3.4x more debt cushion than BORR.
Total debt $754.00M Interest coverage 1.15x -22% vs BORR Carries about 1.3x less debt cushion than BORR.
What you should know
The case for and against BORR
2 Rewards
3 Risks
Rewards
-
Revenue grew 1.0% last year.
-
Free cash flow was positive in 1/10 years.
Risks
-
Return on equity was -24.7% last year — the company lost money on shareholders' equity.
-
Net debt grew 15.8% over 3 years.
-
Operating margin compressed from 5.8% to 0.1% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
—
Forward P/E
54.88x
P/B
1.42x
P/S
1.35x
EV/EBITDA
9.82x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
43.7%
Operating margin
0.1%
Net margin
-24.0%
ROE
-24.7%
ROA
3.8%
Health
Liquidity and balance-sheet strength
Debt / equity
2.59x
Current ratio
2.53x
Quick ratio
2.34x
Total debt
$2.49B
Total cash
$223.60M
Growth
How the business has been compounding
Revenue TTM
$3.25B
Revenue 5Y CAGR
42.8%
EPS TTM
-0.78
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$341.00M
Free CF TTM
$127.40M
FCF margin
3.9%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2025-03-03