# Valaris (VAL.US)

Canonical: https://gigainvestors.com/s/VAL

Analysis as of: 2026-10-16T07:32:49.113Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $83.75 per share; close as of 2026-10-15.

Estimated value: low $68.63 per share, central $88.53 per share, high $102.40 per share. Buy at or below the central value $88.53 per share. Valuation as of 2026-10-16T07:32:49.113Z; scenarios are not confidence intervals.

Expected annual return: 10.4% at the stated quote. About 10.4% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 5 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- negative average operating margin

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 5

- Years with a net loss: 5

- Operating margin variation: 2.45×

Chart: Operating margin; fiscal year observations.

- FY2017: -0.07×

- FY2018: -0.14×

- FY2019: -0.33×

- FY2020: -3.04×

- FY2021: -0.73×

- FY2022: 0.02×

- FY2023: 0.03×

- FY2024: 0.15×

- FY2025: 0.21×

- LTM to Jun 2026: 0.12×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 0.6%

- ROIC, second-lowest year: -69.4%

- Typical minus recent gross margin: -6.9 pp

- Typical gross margin (annual median): 18.2%

- Recent gross margin (lower of latest and 3-year median): 25.0%

- Years with nonpositive capital: 0

- Capital spending / revenue: 13.7%

- ROIC including acquisitions, ten-year median: 4.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 7.6%

- FY2017: -0.8%

- FY2018: -1.5%

- FY2019: -3.5%

- FY2020: -96.3%

- FY2021: -69.4%

- FY2022: 2.7%

- FY2023: 2.1%

- FY2024: 11.6%

- FY2025: 13.2%

### economics: fail

- owner earnings cash conversion below threshold

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: -$2.1B

- Net income, five-year total: -$2.1B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -1.3 pp

- Working capital / revenue, change between three-year averages: -7.2 pp

- Working capital / revenue, final three-year average: 9.4%

Chart: Owner earnings · five years; fiscal year observations.

- FY2021: -$4.3B

- FY2022: $177M

- FY2023: $865M

- FY2024: $373M

- FY2025: $791M

### management: pass

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: -0.8% vs 11.6%

- Per-share earnings: -3.65 to 11.51 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -11.2%

- Ordinary dilution, 5-year annual growth: -18.6%

- Diluted shares, 10-year annual growth: -11.2%

- Diluted shares, 5-year annual growth: -18.6%

- Per-share value change: $15.16

- Per-share value, starting three-year median: -$3.65

- Per-share value, ending three-year median: $11.51

- Buybacks concentrated in cheaper years (correlation): 0.20

- Average buyback yield: 2.7%

- Buyback history: 4 years

- Debt-funded buybacks: No

- Acquisition spending: $1.4B

- Cumulative net income, 10 years: -$7.2B

- ROIC, first three-year median: -0.8%

- ROIC, last three-year median: 11.6%

Chart: Earnings per share; fiscal year observations.

- FY2016: $11.85

- FY2017: -$3.65

- FY2018: -$5.90

- FY2019: -$1.14

- FY2020: -$24.41

- FY2021: -$59.93

- FY2022: $2.33

- FY2023: $11.51

- FY2024: $5.12

- FY2025: $13.86

### accounting: pass

- Sloan accruals: 8.2%

- Receivables to sales index (DSRI): 0.84×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 4.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.56×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.00×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -1.3%

- FY2017: -3.9%

- FY2018: -4.2%

- FY2019: 0.5%

- FY2020: -35.8%

- FY2021: -169.7%

- FY2022: 1.7%

- FY2023: 13.8%

- FY2024: 0.4%

- FY2025: 8.2%

## Holders

- [Martin Whitman](https://gigainvestors.com/TA): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 3.8% a year for ten years · "Valaris (VAL) Swings Back to Profit, but Middle East Costs Linger" (finance.yahoo.com, Sep 2026) · sales -9.8%

Story as of 2026-10-16T09:59:47.280Z; price observation 2026-10-15.

Price needs cash profits to grow 3.8% a year for ten years

- 2025-07-31: Valaris earnings beat by $0.35, revenue topped estimates ([investing.com](https://www.investing.com/news/earnings/valaris-earnings-beat-by-035-revenue-topped-estimates-4161593))

- 2025-08-01: Valaris outlines $4.7B contract backlog and raises 2025 EBITDA guidance amid robust offshore demand ([seekingalpha.com](https://seekingalpha.com/news/4476237-valaris-outlines-4_7b-contract-backlog-and-raises-2025-ebitda-guidance-amid-robust-offshore?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-02-20: Valaris EPS of $10.26, revenue of $537.4M beats by $42.99M; initiates FY26 outlook ([seekingalpha.com](https://seekingalpha.com/news/4554429-valaris-eps-of-1026-revenue-of-5374m-beats-by-4299m-initiates-fy26-outlook?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-03-05: Transocean Valaris All Stock Merger Reshapes Offshore Drilling Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/transocean-valaris-stock-merger-reshapes-031732627.html))

- 2026-10-07: Valaris Wins Contracts, Extensions With $220 Million Backlog ([finance.yahoo.com](https://finance.yahoo.com/energy/articles/valaris-wins-contracts-extensions-220-114256082.html))

### Sales · FY2025–2026

sales -9.8%; source https://www.sec.gov/Archives/edgar/data/314808/000031480826000029/val-20251231.htm; observed 2026-02-20.

- FY2017: $1.8B 

- FY2018: $1.7B 

- FY2019: $2.1B 

- FY2020: $1.4B 

- FY2021: $1.2B 

- FY2022: $1.6B 

- FY2023: $1.8B 

- FY2024: $2.4B 

- FY2025: $2.4B 

- FY2026: $2.1B 

### Gross margin · FY2025

gross margin 25%; source https://www.sec.gov/Archives/edgar/data/314808/000031480826000029/val-20251231.htm; observed 2026-02-20.

- FY2016: 53.1% 

- FY2017: 35.5% 

- FY2018: 22.6% 

- FY2019: 12.0% 

- FY2021: 13.3% 

- FY2022: 13.7% 

- FY2023: 13.5% 

- FY2024: 25.5% 

- FY2025: 25.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in oil & gas drilling; annual sales are USD 2.4 billion.

- Source: https://www.sec.gov/Archives/edgar/data/314808/000031480826000029/val-20251231.htm (filed 2026-02-20); FY2025: revenue 2369000000; grossProfit 593000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); VAL.US: Valaris Limited, together with its subsidiaries, provides offshore contract drilling services in Brazil, the United Kingdom, Gulf of America, Australia, Angola, and internationally. It operates through four segments: Floaters, Jackups, ARO, and Other. The company owns an offshore drilling rig fleet, which includes drillships, dynamically positioned semisubmersible rigs, a moored semisubmersible rig, and jackup rigs. It also offers management services on rigs owned by third parties. The company serves international, government-owned, and independent oil and gas companies. Valaris Limited was founded in 1975 and is headquartered in Houston, Texas.

### Why customers stay

Margins ranged from 13.5% to 25.5% during 2023–25; it earns 0.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-20); FY2023: grossProfit / revenue = 13.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-20); FY2024: grossProfit / revenue = 25.5%.

- Source: https://www.sec.gov/Archives/edgar/data/314808/000031480826000029/val-20251231.htm (filed 2026-02-20); FY2025: grossProfit / revenue = 25%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-20); 10-year return on capital observations [[2016,0.0758247194505104],[2017,-0.008277898613999714],[2018,-0.014911623738767933],[2019,-0.03450573528356885],[2020,-0.9625723843256311],[2021,-0.6941603838245374],[2022,0.02657854416941578],[2023,0.021209117938553023],[2024,0.11584296418473698],[2025,0.1319093472362611]]; median 0.006465609662276654. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 14% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/314808/000031480826000029/val-20251231.htm (filed 2026-02-20); Gross margin observations: [[2021,0.13347938980850374],[2022,0.13684867394695788],[2023,0.1348503530994283]]; range within 2 percentage points.

### Where the cash goes

Spends 0.6% of cash earnings on expansion; paid dividends in 4 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-20); FY2016: growth capex 0; upkeep 322200000; cash acquisitions 0; owner earnings 873600000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-20); FY2019: growth capex 0; upkeep 227000000; cash acquisitions 0; owner earnings 167900000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-20); FY2022: growth capex 115800000; upkeep 91200000; owner earnings 176500000. Growth capex / owner earnings = 0.6560906515580737.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-20); FY2023: growth capex 595000000; upkeep 101100000; owner earnings 865400000. Growth capex / owner earnings = 0.6875433325629766.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-20); FY2024: growth capex 333000000; upkeep 122100000; owner earnings 373400000. Growth capex / owner earnings = 0.8918050348152116.

- Source: https://www.sec.gov/Archives/edgar/data/314808/000031480826000029/val-20251231.htm (filed 2026-02-20); FY2025: growth capex 5091199.122521222; upkeep 338408800.8774788; owner earnings 790691199.1225212. Growth capex / owner earnings = 0.006438922209038421.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-20); Dividend observations: [[2016,11600000],[2017,13800000],[2018,17900000],[2019,4500000],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/314808/000031480826000029/val-20251231.htm (filed 2026-02-20); FY2025: cash repurchases 100000000 USD.

### What the price says

The price assumes cash profits grow 3.8% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-20); Ten-year compound average after fade. Initial solved rate 0.042045151370033604. Price 83.75; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -12.087855297157622 → FY2025 11.15220309058563. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2021-05: $23.47 per share

- 2021-06: $28.88 per share

- 2021-07: $27.10 per share

- 2021-08: $29.69 per share

- 2021-09: $34.88 per share

- 2021-10: $35.22 per share

- 2021-11: $31.06 per share

- 2021-12: $36.00 per share

- 2022-01: $41.49 per share

- 2022-02: $40.74 per share

- 2022-03: $51.97 per share

- 2022-04: $50.75 per share

- 2022-05: $59.45 per share

- 2022-06: $42.24 per share

- 2022-07: $50.18 per share

- 2022-08: $50.98 per share

- 2022-09: $48.94 per share

- 2022-10: $66.93 per share

- 2022-11: $66.01 per share

- 2022-12: $67.62 per share

- 2023-01: $72.64 per share

- 2023-02: $67.25 per share

- 2023-03: $65.06 per share

- 2023-04: $60.00 per share

- 2023-05: $57.73 per share

- 2023-06: $62.93 per share

- 2023-07: $76.80 per share

- 2023-08: $75.32 per share

- 2023-09: $74.98 per share

- 2023-10: $66.04 per share

- 2023-11: $68.60 per share

- 2023-12: $68.57 per share

- 2024-01: $61.87 per share

- 2024-02: $63.05 per share

- 2024-03: $75.26 per share

- 2024-04: $65.06 per share

- 2024-05: $77.40 per share

- 2024-06: $74.50 per share

- 2024-07: $78.59 per share

- 2024-08: $61.06 per share

- 2024-09: $55.75 per share

- 2024-10: $50.60 per share

- 2024-11: $46.19 per share

- 2024-12: $44.24 per share

- 2025-01: $47.94 per share

- 2025-02: $35.70 per share

- 2025-03: $39.26 per share

- 2025-04: $32.31 per share

- 2025-05: $37.62 per share

- 2025-06: $42.11 per share

- 2025-07: $48.63 per share

- 2025-08: $49.67 per share

- 2025-09: $48.77 per share

- 2025-10: $56.12 per share

- 2025-11: $56.41 per share

- 2025-12: $50.40 per share

- 2026-01: $57.73 per share

- 2026-02: $95.85 per share

- 2026-03: $98.04 per share

- 2026-04: $101.98 per share

- 2026-05: $92.63 per share

- 2026-06: $72.60 per share

- 2026-07: $79.19 per share

- 2026-08: $86.37 per share

- 2026-09: $78.52 per share

- 2026-10: $83.75 per share

## Annual estimated value (USD per share)

- FY2016: low $151.17 per share, central $167.34 per share, high $188.86 per share

- FY2023: low $30.06 per share, central $34.50 per share, high $38.90 per share

- FY2024: low $47.78 per share, central $59.56 per share, high $68.83 per share

- FY2025: low $74.58 per share, central $96.18 per share, high $111.23 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/314808/000031480826000029/val-20251231.htm); period 2025-12-31, filed 2026-02-20.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.