Value
8.1/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 9.0 |
| EV/EBITDA | 7.0 |
| Fwd P/E | 8.6 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 13.2x
- ▸PEG: 0.03
- ▸Attractively valued
SDRL · Why this verdict
Why Seadrill (SDRL) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Seadrill is an offshore drilling contractor with a compelling 33% analyst upside and an oversold RSI of 22 near Bollinger lower band support, but the company has missed earnings in 3 of 4 recent quarters and carries below-minimum business quality, reflecting a speculative recovery setup rather than a high-conviction investment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
RSI has fallen to 22 — deeply oversold — with the price near the Bollinger lower band and a high volume spike, creating a classic short-term mean reversion setup with 15.8% upside to the analyst target of $49.09 from the current $42.39. V9 | Price rises above $48, more than 13% above the current $42.39, within 90 days as the oversold condition resolves. | ↑Improving |
| CounterDeeply oversold readings in below-minimum quality stocks often precede continued decline rather than mean reversion; RSI of 22 can persist for months in a fundamentally deteriorating situation. | ||
Analysts are targeting $49.09 against the current price of $42.39, representing 15.8% upside with a risk-to-reward ratio of 4.05 based on the technical stop loss level, and 7 analysts cover the stock with a positive consensus. Targets | Stock price reaches $49, more than 15% above the current $42.39, within 12 months as offshore drilling demand improves. | ↓Deteriorating |
| CounterThe analyst consensus upside has been persistently positive without the stock being able to sustain gains given consecutive earnings misses; analyst targets may lag the deteriorating fundamental reality. | ||
The company missed earnings estimates in 3 of the last 4 quarters with an average negative surprise of -111.8%, including a -283% and -140% miss in the two prior quarters, indicating that contract wins and day rates are being consistently overestimated by analysts. Earnings | EPS surprise rises above 0% in at least 2 of the next 4 quarters, confirming that day rate and utilization assumptions have been sufficiently reduced. | ↑Improving |
| CounterThe most recent quarter showed a 71.2% positive surprise where actual EPS of -$0.08 beat the estimate of -$0.27, suggesting the negative estimate reset may already be underway and future beats are more likely. | ||
Business quality is below the minimum investability threshold at 3.3 out of 10, with near-zero return on equity and net margins, reflecting that the company is not generating meaningful economic profits at current day rates and fleet utilization levels. Bear case | Quality score improves above 4.0 within 12 months as drilling day rates recover and fleet utilization rises above current levels. | ↓Deteriorating |
| CounterOffshore drilling companies typically operate at low margins in rate troughs and can generate very high returns when day rates recover; the current below-minimum quality reflects the trough, not the through-cycle business quality. | ||
RSI has fallen to 22 — deeply oversold — with the price near the Bollinger lower band and a high volume spike, creating a classic short-term mean reversion setup with 15.8% upside to the analyst target of $49.09 from the current $42.39.
↑ImprovingV9
- Expectation
- Price rises above $48, more than 13% above the current $42.39, within 90 days as the oversold condition resolves.
CounterDeeply oversold readings in below-minimum quality stocks often precede continued decline rather than mean reversion; RSI of 22 can persist for months in a fundamentally deteriorating situation.
Analysts are targeting $49.09 against the current price of $42.39, representing 15.8% upside with a risk-to-reward ratio of 4.05 based on the technical stop loss level, and 7 analysts cover the stock with a positive consensus.
↓DeterioratingTargets
- Expectation
- Stock price reaches $49, more than 15% above the current $42.39, within 12 months as offshore drilling demand improves.
CounterThe analyst consensus upside has been persistently positive without the stock being able to sustain gains given consecutive earnings misses; analyst targets may lag the deteriorating fundamental reality.
The company missed earnings estimates in 3 of the last 4 quarters with an average negative surprise of -111.8%, including a -283% and -140% miss in the two prior quarters, indicating that contract wins and day rates are being consistently overestimated by analysts.
↑ImprovingEarnings
- Expectation
- EPS surprise rises above 0% in at least 2 of the next 4 quarters, confirming that day rate and utilization assumptions have been sufficiently reduced.
CounterThe most recent quarter showed a 71.2% positive surprise where actual EPS of -$0.08 beat the estimate of -$0.27, suggesting the negative estimate reset may already be underway and future beats are more likely.
Business quality is below the minimum investability threshold at 3.3 out of 10, with near-zero return on equity and net margins, reflecting that the company is not generating meaningful economic profits at current day rates and fleet utilization levels.
↓DeterioratingBear case
- Expectation
- Quality score improves above 4.0 within 12 months as drilling day rates recover and fleet utilization rises above current levels.
CounterOffshore drilling companies typically operate at low margins in rate troughs and can generate very high returns when day rates recover; the current below-minimum quality reflects the trough, not the through-cycle business quality.
Per-dimension breakdown
Quality
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 1.5 |
| Gross margin | 3.1 |
| Op margin | 6.7 |
| Net margin | 0.0 |
| Current ratio | 8.5 |
| FCF quality | 10.0 |
| Moat | 7.1 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 1000% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
7.3/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 7.3 |
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.5 |
| Analyst rating | 6.8 |
| Price target | 7.9 |
- ▸LLM news sentiment: +0.50 (n=2)
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 22%
Insider
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Notable insider selling — $5,443,142 (0.186% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.0 |
| quality rank | 4.4 |
| growth rank | 8.9 |
- ▸Industry growth leader
- ▸Conservative debt levels
Technical
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.4 |
| support resistance | 1.9 |
| 52w position | 6.6 |
Risk (lower is worse)
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.3 |
| days to cover | 4.6 |
| volatility | 1.3 |
| put call | 0.0 |
| implied vol | 4.0 |
| beta | 5.5 |
| debt equity | 8.9 |
- ▸Elevated put/call: 2.50
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 6.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (6)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- NEWS_BOOST:EARNINGS:0.60
- EARNINGS_PROXIMITY:83d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.5<1.5@spot
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.50
Upside
+6.1%
Downside
12.2%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 52, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.38>1.3, MCap $2.9B<$5B
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:6.9>=5.5. Top dim: Value at 8.1; weakest: Technical at 3.3. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Value at 8.1, Sentiment at 7.4, and Growth at 7.3; the weakest are Technical at 3.3, Catalyst at 3.9, and Risk (lower is worse) at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.50 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Oversold Technical Bounce Setup
Trip ifPrice falls below $38, more than 10% below the current $42.39, indicating the oversold bounce has failed and the downtrend is continuing.
- P2Analyst Upside Significant
Trip ifAnalyst consensus price target drops below $38, lower than the current price of $42.39, signaling analysts have reduced expectations materially.
- P3Consecutive Earnings Miss Streak
Trip ifEPS surprise falls below -50% in at least 2 of the next 4 quarters, indicating the miss streak has resumed despite the recent positive beat.
- P4Quality Below Minimum Threshold
Trip ifQuality score remains below 3.0 for more than 3 consecutive quarters, indicating no improvement in operating margins or return metrics.