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On February 9, 2026, Transocean and Valaris announced a definitive all-stock business combination agreement valuing Valaris at about $5.8 billion, with Valaris shareholders to receive 15.235 Transocean shares per Valaris share and certain shareholder support agreements already secured. Valaris released fourth-quarter 2025 financial results reporting cash and cash equivalents of $599 million as of December 31, 2025 and scheduled a Q4 2025 earnings release and conference call in early February 2026.
Technical Analysis
ADX (47.66): ADX registers above 40, indicating a very strong trend presence and signaling that recent directional moves carry substantive strength rather than random noise; this amplifies the immediate impact of corporate headlines on price behavior.
DI+ (28.98) — Peak & Reversal: DI+ showing a peak-and-reversal denotes waning bullish directional pressure, which weighs against continued upside momentum relative to the prevailing trend strength.
DI- (11.21) — Peak & Reversal: DI- also shows a peak-and-reversal; its decline reduces recent bearish pressure, producing a mixed directional signal where strength (ADX) contrasts with diminishing internal directional conviction.
MACD (4.34) & Signal (5.12) — Peak & Reversal: MACD has peaked and reversed and sits below its signal line, a bearish momentum profile that supports the likelihood of near-term consolidation or downward drift despite a positive absolute MACD value.
MRO (37.91) — Peak & Reversal: MRO sits positive and has peaked then reversed, indicating price sits above the model target and implying downside pressure potential as the oscillator retracts from its peak.
RSI (61.31) — Peak & Reversal: RSI above 60 with a peak-and-reversal flags reduced upward momentum from an elevated level, consistent with a short-term loss of buying conviction.
Price vs. Moving Averages & Bands: Closing price $97.96 trades above the 20‑day average ($93.06) and well above the 200‑day average ($57.56); price exceeds the 1x Bollinger upper band ($96.22), indicating an extension beyond recent normal volatility and heightening the probability of consolidation or reversion toward shorter-term averages.
Fundamental Analysis
Profitability: EBIT margin stands at 11.39%, above the industry peer mean of 8.61% and above the peer median of 7.23%, yet the company shows sharp margin deterioration QoQ and YoY: EBIT margin QoQ declined by 71.83% and YoY declined by 54.39%, signaling transitory or contract-timing effects that compress near-term operating profitability despite the above-peer current level.
Earnings Per Share: Reported EPS of $10.26 far exceeded the estimate of $0.42, producing an EPS surprise of $9.84 (surprise ratio ~2,342.9%), reflecting sizable one-off items or discrete tax effects within the period that materially lifted headline EPS versus expectations.
Cash, Liquidity, and Cash Flow: Cash and short-term investments total $599,400,000 and the current ratio of 1.77 aligns with the industry peer mean of 1.77, indicating near‑peer liquidity coverage. Operating cash flow reached $72,200,000 while free cash flow remained negative at -$34,100,000, and free cash flow yield measured -0.80%, which undercuts coverage of capital commitments and supports the WMDST classification of over‑valued when price expectations assume sustained free cash generation.
Leverage & Coverage: Total debt equals $1,158,900,000 with debt-to-EBITDA at 11.38x, a materially elevated leverage multiple that increases sensitivity to earnings volatility; debt-to-assets of 21.85% sits below the industry peer mean of 30.83%, but the high debt-to-EBITDA ratio highlights near‑term coverage pressure. Interest coverage stands at 2.47x and declined QoQ, constraining margin for interest cost absorption if operating performance softens.
Growth & Efficiency: Reported revenue totaled $537,400,000 with revenue growth of -9.79% YoY but a positive revenue growth QoQ of 2.09%; asset turnover of 0.108 sits roughly at the industry peer mean of 0.110, while asset growth rate runs 14.38%, indicating capital deployment despite mixed top-line trends.
Valuation Statement: The current valuation as determined by WMDST: over-valued; enterprise multiple at 47.27 and forward PE at 30.16 reflect significant market expectations relative to underlying free cash flow generation and elevated leverage, supporting WMDST’s over‑valued classification.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-12-31 |
| REPORT DATE: | 2026-02-19 |
| NEXT REPORT DATE: | 2026-05-21 |
| CASH FLOW | Begin Period Cash Flow | $ 675.5 M |
| Operating Cash Flow | $ 72.2 M | |
| Capital Expenditures | $ -106.30 M | |
| Change In Working Capital | $ -7.40 M | |
| Dividends Paid | — | |
| Cash Flow Delta | $ -58.00 M | |
| End Period Cash Flow | $ 617.5 M | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 537.4 M | |
| Forward Revenue | $ 22.5 M | |
| COSTS | ||
| Cost Of Revenue | $ 454.0 M | |
| Depreciation | $ 40.6 M | |
| Depreciation and Amortization | $ 40.6 M | |
| Research and Development | — | |
| Total Operating Expenses | $ 481.0 M | |
| PROFITABILITY | ||
| Gross Profit | $ 83.4 M | |
| EBITDA | $ 101.8 M | |
| EBIT | $ 61.2 M | |
| Operating Income | $ 56.4 M | |
| Interest Income | $ 18.7 M | |
| Interest Expense | $ 24.8 M | |
| Net Interest Income | $ -6.10 M | |
| Income Before Tax | $ 36.4 M | |
| Tax Provision | $ -680.40 M | |
| Tax Rate | 34.0 % | |
| Net Income | $ 717.5 M | |
| Net Income From Continuing Operations | $ 716.8 M | |
| EARNINGS | ||
| EPS Estimate | $ 0.42 | |
| EPS Actual | $ 10.26 | |
| EPS Difference | $ 9.84 | |
| EPS Surprise | 2342.857 % | |
| Forward EPS | $ 1.74 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 5.3 B | |
| Intangible Assets | — | |
| Net Tangible Assets | $ 3.2 B | |
| Total Current Assets | $ 1.2 B | |
| Cash and Short-Term Investments | $ 599.4 M | |
| Cash | $ 599.4 M | |
| Net Receivables | $ 424.1 M | |
| Inventory | — | |
| Long-Term Investments | $ 159.7 M | |
| LIABILITIES | ||
| Accounts Payable | $ 348.2 M | |
| Short-Term Debt | — | |
| Total Current Liabilities | $ 691.6 M | |
| Net Debt | $ 486.6 M | |
| Total Debt | $ 1.2 B | |
| Total Liabilities | $ 2.1 B | |
| EQUITY | ||
| Total Equity | $ 3.2 B | |
| Retained Earnings | $ 2.4 B | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 45.80 | |
| Shares Outstanding | 69.200 M | |
| Revenue Per-Share | $ 7.77 | |
| VALUATION | Market Capitalization | $ 4.3 B |
| Enterprise Value | $ 4.8 B | |
| Enterprise Multiple | 47.271 | |
| Enterprise Multiple QoQ | 230.994 % | |
| Enterprise Multiple YoY | 104.04 % | |
| Enterprise Multiple IPRWA | high: 56.644 VAL: 47.271 median: 32.848 mean: 32.163 low: 14.939 |
|
| EV/R | 8.955 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 1.674 | |
| Asset To Liability | 2.487 | |
| Debt To Capital | 0.268 | |
| Debt To Assets | 0.218 | |
| Debt To Assets QoQ | -12.933 % | |
| Debt To Assets YoY | -17.303 % | |
| Debt To Assets IPRWA | high: 0.593 mean: 0.308 median: 0.262 VAL: 0.218 low: 0.16 |
|
| Debt To Equity | 0.366 | |
| Debt To Equity QoQ | -23.092 % | |
| Debt To Equity YoY | -29.902 % | |
| Debt To Equity IPRWA | high: 1.759 mean: 0.628 median: 0.434 VAL: 0.366 low: 0.221 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 1.342 | |
| Price To Book QoQ | -5.295 % | |
| Price To Book YoY | -10.775 % | |
| Price To Book IPRWA | VAL: 1.342 high: 1.137 mean: 0.913 median: 0.81 low: 0.635 |
|
| Price To Earnings (P/E) | 5.99 | |
| Price To Earnings QoQ | -68.097 % | |
| Price To Earnings YoY | -76.248 % | |
| Price To Earnings IPRWA | high: 361.694 median: 233.755 mean: 63.587 VAL: 5.99 low: -326.495 |
|
| PE/G Ratio | 0.021 | |
| Price To Sales (P/S) | 7.913 | |
| Price To Sales QoQ | 35.936 % | |
| Price To Sales YoY | 37.388 % | |
| Price To Sales IPRWA | VAL: 7.913 high: 6.765 mean: 4.944 median: 4.937 low: 2.152 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 30.161 | |
| Forward PE/G | 0.105 | |
| Forward P/S | 186.725 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | 7.621 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.108 | |
| Asset Turnover Ratio QoQ | -17.057 % | |
| Asset Turnover Ratio YoY | -19.044 % | |
| Asset Turnover Ratio IPRWA | high: 0.207 mean: 0.11 VAL: 0.108 median: 0.101 low: 0.066 |
|
| Receivables Turnover | 1.237 | |
| Receivables Turnover Ratio QoQ | -3.026 % | |
| Receivables Turnover Ratio YoY | 7.382 % | |
| Receivables Turnover Ratio IPRWA | high: 2.123 mean: 1.56 median: 1.511 VAL: 1.237 low: 1.206 |
|
| Inventory Turnover | — | |
| Inventory Turnover Ratio QoQ | — | |
| Inventory Turnover Ratio YoY | — | |
| Inventory Turnover Ratio IPRWA | — | |
| Days Sales Outstanding (DSO) | 73.744 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | 4.147 | |
| Cash Conversion Cycle Days QoQ | 138.06 % | |
| Cash Conversion Cycle Days YoY | — | |
| Cash Conversion Cycle Days IPRWA | high: 129.779 mean: 60.154 median: 35.31 VAL: 4.147 low: -38.745 |
|
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | 1.007 | |
| CapEx To Revenue | -0.198 | |
| CapEx To Depreciation | -2.618 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 4.3 B | |
| Net Invested Capital | $ 4.3 B | |
| Invested Capital | $ 4.3 B | |
| Net Tangible Assets | $ 3.2 B | |
| Net Working Capital | $ 533.7 M | |
| LIQUIDITY | ||
| Cash Ratio | 0.867 | |
| Current Ratio | 1.772 | |
| Current Ratio QoQ | -5.324 % | |
| Current Ratio YoY | 11.603 % | |
| Current Ratio IPRWA | high: 2.191 VAL: 1.772 mean: 1.77 median: 1.675 low: 1.558 |
|
| Quick Ratio | — | |
| Quick Ratio QoQ | — | |
| Quick Ratio YoY | — | |
| Quick Ratio IPRWA | — | |
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | 11.384 | |
| Cost Of Debt | 1.409 % | |
| Interest Coverage Ratio | 2.468 | |
| Interest Coverage Ratio QoQ | -74.482 % | |
| Interest Coverage Ratio YoY | -62.62 % | |
| Interest Coverage Ratio IPRWA | VAL: 2.468 high: 1.474 median: 1.333 mean: 0.33 low: -2.27 |
|
| Operating Cash Flow Ratio | 1.156 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | 69.597 | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | — | |
| Dividend Payout Ratio | — | |
| Dividend Rate | — | |
| Dividend Yield | — | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 14.377 % | |
| Revenue Growth | -9.787 % | |
| Revenue Growth QoQ | 208.738 % | |
| Revenue Growth YoY | 7.22 % | |
| Revenue Growth IPRWA | high: 1.459 % median: -0.275 % mean: -1.398 % low: -6.388 % VAL: -9.787 % |
|
| Earnings Growth | 287.17 % | |
| Earnings Growth QoQ | 344.563 % | |
| Earnings Growth YoY | 152.71 % | |
| Earnings Growth IPRWA | VAL: 287.17 % high: 14.286 % median: -74.138 % mean: -88.711 % low: -169.231 % |
|
| MARGINS | ||
| Gross Margin | 15.519 % | |
| Gross Margin QoQ | -39.577 % | |
| Gross Margin YoY | -32.92 % | |
| Gross Margin IPRWA | high: 85.906 % mean: 36.57 % VAL: 15.519 % median: 13.029 % low: 5.038 % |
|
| EBIT Margin | 11.388 % | |
| EBIT Margin QoQ | -71.828 % | |
| EBIT Margin YoY | -54.386 % | |
| EBIT Margin IPRWA | high: 26.176 % VAL: 11.388 % mean: 8.611 % median: 7.226 % low: -6.354 % |
|
| Return On Sales (ROS) | 10.495 % | |
| Return On Sales QoQ | -50.42 % | |
| Return On Sales YoY | -57.963 % | |
| Return On Sales IPRWA | high: 25.944 % mean: 11.632 % VAL: 10.495 % median: 9.149 % low: -0.02 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ -34.10 M | |
| Free Cash Flow Yield | -0.802 % | |
| Free Cash Flow Yield QoQ | -121.676 % | |
| Free Cash Flow Yield YoY | -309.399 % | |
| Free Cash Flow Yield IPRWA | high: 10.458 % median: 3.895 % mean: 3.353 % VAL: -0.802 % low: -2.723 % |
|
| Free Cash Growth | -126.578 % | |
| Free Cash Growth QoQ | -188.521 % | |
| Free Cash Growth YoY | 43.206 % | |
| Free Cash Growth IPRWA | high: 263.15 % median: -19.568 % mean: -84.946 % VAL: -126.578 % low: -800.0 % |
|
| Free Cash To Net Income | -0.048 | |
| Cash Flow Margin | 148.79 % | |
| Cash Flow To Earnings | 1.114 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.04 | |
| Return On Assets (ROA) | 14.433 % | |
| Return On Assets QoQ | 250.741 % | |
| Return On Assets YoY | 372.439 % | |
| Return On Assets IPRWA | VAL: 14.433 % high: 1.142 % median: 0.157 % mean: 0.07 % low: -1.469 % |
|
| Return On Capital Employed (ROCE) | 1.327 % | |
| Return On Equity (ROE) | 0.226 | |
| Return On Equity QoQ | 194.599 % | |
| Return On Equity YoY | 278.989 % | |
| Return On Equity IPRWA | VAL: 0.226 high: 0.019 mean: 0.006 median: 0.003 low: -0.004 |
|
| DuPont ROE | 25.546 % | |
| Return On Invested Capital (ROIC) | 0.949 % | |
| Return On Invested Capital QoQ | -83.951 % | |
| Return On Invested Capital YoY | -93.418 % | |
| Return On Invested Capital IPRWA | high: 1.57 % VAL: 0.949 % median: 0.669 % mean: 0.466 % low: -0.99 % |
|