Value
7.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.4 |
| EV/EBITDA | 6.0 |
| Fwd P/E | 5.4 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 23.5x
- ▸PEG: 0.19
BORR · Why this verdict
Why Borr Drilling (BORR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Attractively priced relative to earnings growth with improving technical momentum from an oversold level, but negative free cash flow and an extreme put-to-call ratio of 4.00 create a difficult risk/reward that does not yet support a constructive entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a PEG ratio of 0.14 and a forward P/E of 14.9x, the shares trade at a steep discount to the earnings growth rate and are characterized as attractively valued — suggesting meaningful unrecognized upside if growth estimates are achieved. Valuation breakdown | The PEG ratio rises above 0.50 over the next 12 months as earnings growth is recognized in the price, narrowing the current valuation discount. | ↓Deteriorating |
| CounterThe most recent quarter produced an earnings miss, with EPS coming in roughly 122% below the consensus estimate, calling into question whether the forward growth profile is achievable and whether the low PEG reflects opportunity or an overoptimistic growth denominator. | ||
Free cash flow is negative — converting to roughly -274% of net income — while the company carries meaningful financial leverage, leaving the business with little cushion if earnings soften further. Quality breakdown | Free cash flow turns positive for 2 consecutive quarters over the next 12 months, demonstrating that the business has become cash-generative and the leverage risk has reduced. | ↓Deteriorating |
| CounterA Piotroski F-Score of 8 out of 9 indicates broad-based financial health across many balance sheet and profitability measures, suggesting the negative free cash flow may be tied to capital investment timing rather than a structural inability to generate cash. | ||
The stock has pulled back to an oversold RSI reading of 31 while still trading above its 200-day moving average and showing rising volume accumulation — a combination that has historically preceded recoveries within established uptrends. Momentum breakdown | Price recovers above $5.00 within 6 months as the oversold condition normalizes without breaking the long-term uptrend support. | ↑Improving |
| CounterThe technical setup has no confirmed chart pattern and signals are described as mixed; with upside to the analyst target of only about 8.7%, the reward available even in a successful recovery scenario is limited. | ||
A put-to-call ratio of 4.00 — far above typical levels — combined with implied volatility at 130% signals that options market participants are positioned heavily for further downside, an extreme bearish sentiment overhang that could weigh on the stock. Risk breakdown | Put-to-call ratio falls below 2.0 from the current 4.00 over the next 6 months and implied volatility compresses below 80%, indicating bearish positioning has meaningfully unwound. | ↓Deteriorating |
| CounterExtreme put-to-call ratios can reflect hedging demand from existing holders rather than pure directional bets, and historically such extremes have sometimes marked sentiment lows that precede sharp price recoveries. | ||
At a PEG ratio of 0.14 and a forward P/E of 14.9x, the shares trade at a steep discount to the earnings growth rate and are characterized as attractively valued — suggesting meaningful unrecognized upside if growth estimates are achieved.
↓DeterioratingValuation breakdown
- Expectation
- The PEG ratio rises above 0.50 over the next 12 months as earnings growth is recognized in the price, narrowing the current valuation discount.
CounterThe most recent quarter produced an earnings miss, with EPS coming in roughly 122% below the consensus estimate, calling into question whether the forward growth profile is achievable and whether the low PEG reflects opportunity or an overoptimistic growth denominator.
Free cash flow is negative — converting to roughly -274% of net income — while the company carries meaningful financial leverage, leaving the business with little cushion if earnings soften further.
↓DeterioratingQuality breakdown
- Expectation
- Free cash flow turns positive for 2 consecutive quarters over the next 12 months, demonstrating that the business has become cash-generative and the leverage risk has reduced.
CounterA Piotroski F-Score of 8 out of 9 indicates broad-based financial health across many balance sheet and profitability measures, suggesting the negative free cash flow may be tied to capital investment timing rather than a structural inability to generate cash.
The stock has pulled back to an oversold RSI reading of 31 while still trading above its 200-day moving average and showing rising volume accumulation — a combination that has historically preceded recoveries within established uptrends.
↑ImprovingMomentum breakdown
- Expectation
- Price recovers above $5.00 within 6 months as the oversold condition normalizes without breaking the long-term uptrend support.
CounterThe technical setup has no confirmed chart pattern and signals are described as mixed; with upside to the analyst target of only about 8.7%, the reward available even in a successful recovery scenario is limited.
A put-to-call ratio of 4.00 — far above typical levels — combined with implied volatility at 130% signals that options market participants are positioned heavily for further downside, an extreme bearish sentiment overhang that could weigh on the stock.
↓DeterioratingRisk breakdown
- Expectation
- Put-to-call ratio falls below 2.0 from the current 4.00 over the next 6 months and implied volatility compresses below 80%, indicating bearish positioning has meaningfully unwound.
CounterExtreme put-to-call ratios can reflect hedging demand from existing holders rather than pure directional bets, and historically such extremes have sometimes marked sentiment lows that precede sharp price recoveries.
Per-dimension breakdown
Quality
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 2.5 |
| Gross margin | 4.7 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 8.6 |
| FCF quality | 0.0 |
| Moat | 3.2 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -7% of revenue
- ▸No competitive moat
- ▸Quality concerns
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 10.0 |
- ▸Declining revenue: -13%
Momentum
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 7.2 |
| OBV | 1.0 |
| MA position | 7.2 |
| Volume | 10.0 |
| vol acceleration | 8.4 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+4.4%/30d) — pullback in uptrend, not confirmed weakness
- ▸Volume surge (2.2x avg) on up move
Sentiment
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 2.5 |
| Analyst rating | 6.6 |
| Price target | 6.1 |
- ▸LLM news sentiment: -0.50 (n=5)
- ▸Light analyst coverage (6.0) — signal dampened
Insider
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 6.5 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $30,155,400 (2.205% of mkt cap)
- ▸Institutions accumulating
Peer rank
1.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 0.6 |
| growth rank | 1.1 |
Technical
1.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.3 |
| 52w position | 3.3 |
| gap | 3.0 |
- ▸Extreme gap up (6.4%) - may pull back
Risk (lower is worse)
2.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.8 |
| days to cover | 3.0 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 0.0 |
| beta | 7.0 |
| debt equity | 2.4 |
- ▸Elevated put/call: 3.50
- ▸High IV: 131%
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.3 |
| news activity | 8.0 |
- ▸Earnings concerns: 0B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:6.4>=5.5
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:94d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.4=NEGATIVE
- INSIDER:2.21%=EXTREME
Warning (0)
none
Reward-to-Risk
-0.44
Upside
-6.6%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $1.4B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.4=NEGATIVE outcome against Value at 7.0 and asymmetric R:R of -0.44.
The strongest dimensions are Value at 7.0, Momentum at 6.4, and Insider at 6.4; the weakest are Technical at 1.6, Peer rank at 1.7, and Risk (lower is worse) at 2.3. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.44 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Valuation Growth Discount
Trip ifPEG ratio rises above 1.0, indicating earnings growth has decelerated to the point where the current valuation no longer represents a meaningful discount.
- P2Negative Fcf Leverage Risk
Trip ifFree cash flow rises above $0 for 2 consecutive quarters, indicating the company has turned cash-generative and the leverage risk from negative FCF has reduced.
- P3Oversold Pullback In Uptrend
Trip ifPrice falls below $4.20 for 2 consecutive weeks, confirming that the 200-day moving average uptrend support has been decisively broken.
- P4Extreme Bearish Options Positioning
Trip ifPut-to-call ratio falls below 1.5 from the current 4.00 for 4 consecutive weeks, indicating the extreme bearish sentiment overhang has resolved.