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Relative valuation derived from Energy sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 29.3GRADE F
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
-10.8%
Sector: 6.7%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Seadrill Ltd (SDRL) receives a "Hold" rating with a composite score of 41.2/100, ranked #919 out of 4446 stocks. Key factor scores: Quality 29/100, Value 42/100, Momentum 70/100. This is quantitative analysis only — not investment advice.
Seadrill Ltd (SDRL) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Seadrill Ltd Do?
Seadrill is a deepwater drilling contractor for the petroleum industry. It is incorporated in Bermuda for tax purposes and managed from London And Houston The company operates semi-submersible platforms, jackup rigs and drillships Seadrill Ltd (SDRL) is classified as a mid-cap stock in the Energy sector, specifically within the Petroleum And Natural Gas industry. The company is led by CEO Simon W. Johnson and employs approximately 3,220 people. With a market capitalization of $2.8B, SDRL is one of the notable companies in the Energy sector.
Seadrill Ltd (SDRL) Stock Rating — Hold (April 2026)
As of April 2026, Seadrill Ltd receives a Hold rating with a composite score of 41.2/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.SDRL ranks #919 out of 4,446 stocks in our coverage universe. Within the Energy sector, Seadrill Ltd ranks #84 of 128 stocks, placing it in the lower half of its Energy peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
SDRL Stock Price and 52-Week Range
Seadrill Ltd (SDRL) currently trades at $47.52. The stock lost $0.10 (0.2%) in the most recent trading session. The 52-week high for SDRL is $45.90, which means the stock is currently trading 3.5% from its annual peak. The 52-week low is $17.74, putting the stock 167.9% above its annual trough. Recent trading volume was 574K shares, suggesting relatively thin trading activity.
Is SDRL Overvalued or Undervalued? — Valuation Analysis
Seadrill Ltd (SDRL) carries a value factor score of 42/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The price-to-book ratio stands at 1.06x, versus the sector average of 1.64x. The price-to-sales ratio is 0.52x, compared to 0.47x for the average Energy stock. On an enterprise value basis, SDRL trades at 19.30x EV/EBITDA, versus 3.50x for the sector.
Overall, SDRL's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
Seadrill Ltd Profitability — ROE, Margins, and Quality Score
Seadrill Ltd (SDRL) earns a quality factor score of 29/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is -10.8%, compared to the Energy sector average of 6.7%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at -7.8% versus the sector average of 3.7%.
On a margin basis, Seadrill Ltd reports gross margins of 44.0%, compared to 52.7% for the sector. The operating margin is 3.3% (sector: 10.7%). Net profit margin stands at -5.4%, versus 6.4% for the average Energy stock. Revenue growth is running at 2.5% on a trailing basis, compared to -1.2% for the sector. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
SDRL Debt, Balance Sheet, and Financial Health
Seadrill Ltd has a debt-to-equity ratio of 21.0%, compared to the Energy sector average of 55.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 2.03x, indicating strong short-term liquidity. Total debt on the balance sheet is $613M. Cash and equivalents stand at $402M.
SDRL has a beta of 1.34, meaning it is more volatile than the broader market — a $10,000 investment in SDRL would be expected to move 34.2% more than the S&P 500 on any given day. The stability factor score for Seadrill Ltd is 52/100, reflecting average volatility within the normal range for its sector.
Seadrill Ltd Revenue and Earnings History — Quarterly Trend
In TTM 2026, Seadrill Ltd reported revenue of $1.44B. Net income for the quarter was $-77M. Gross margin was 44.0%. Operating income came in at $47M.
In FY 2025, Seadrill Ltd reported revenue of $1.44B. Net income for the quarter was $-77M. Revenue grew 3.8% year-over-year compared to FY 2024. Operating income came in at $47M.
In Q3 2025, Seadrill Ltd reported revenue of $363M and earnings per share (EPS) of $-0.17. Net income for the quarter was $-11M. Operating income came in at $26M.
In Q2 2025, Seadrill Ltd reported revenue of $377M and earnings per share (EPS) of $-0.68. Net income for the quarter was $-42M. Operating income came in at $6M.
Over the past 8 quarters, Seadrill Ltd has demonstrated a growth trajectory, with revenue expanding from $1.01B to $1.44B. Investors analyzing SDRL stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
SDRL Dividend Yield and Income Analysis
Seadrill Ltd (SDRL) does not currently pay a dividend. This is common among smaller companies in the Petroleum And Natural Gas industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Energy dividend stocks may want to explore other Energy stocks or use the stock screener to filter by dividend yield.
SDRL Momentum and Technical Analysis Profile
Seadrill Ltd (SDRL) has a momentum factor score of 70/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 25/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 10/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
SDRL vs Competitors — Energy Sector Ranking and Peer Comparison
Comparing SDRL against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full SDRL vs S&P 500 (SPY) comparison to assess how Seadrill Ltd stacks up against the broader market across all factor dimensions.
SDRL Next Earnings Date
No upcoming earnings date has been announced for Seadrill Ltd (SDRL) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy SDRL? — Investment Thesis Summary
Seadrill Ltd presents a balanced picture with arguments on both sides. The quality score of 29/100 flags below-average profitability. Price momentum is positive at 70/100, suggesting the trend favors buyers.
In summary, Seadrill Ltd (SDRL) earns a Hold rating with a composite score of 41.2/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on SDRL stock.
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Institutional Research Dossier
Seadrill Ltd (SDRL) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Seadrill Ltd (SDRL), driven by a mixed assessment of its financial performance and valuation. While the company operates in a cyclical industry with potential for upside, its recent net losses and relatively high EV/EBITDA compared to the sector raise concerns about its near-term profitability and valuation. The company's momentum score is high, but this is offset by low scores in quality and investment, leading to a neutral overall outlook.
Seadrill's strategic positioning as a deepwater drilling contractor provides exposure to potentially lucrative projects, but also exposes it to the volatility of oil prices and capital expenditure decisions by major oil companies. The company's recent restructuring and focus on operational efficiency are positive steps, but the path to sustained profitability remains uncertain. Investors should carefully weigh the potential for future growth against the risks associated with the company's financial performance and industry dynamics.
Business Strategy & Overview
Seadrill operates as a deepwater drilling contractor, providing services to the petroleum industry. The company's core business involves owning and operating a fleet of semi-submersible platforms, jackup rigs, and drillships, which are leased to oil and gas companies for exploration and production activities. Seadrill's revenue is primarily generated through day rates charged for the use of its drilling rigs, with rates fluctuating based on market demand, rig specifications, and contract terms.
The company's strategic focus is on securing long-term contracts with major oil and gas companies, aiming to provide stable revenue streams and reduce exposure to short-term market volatility. Seadrill also emphasizes operational efficiency and cost management to improve profitability and maintain a competitive edge. The company has undergone significant restructuring in recent years to reduce debt and streamline operations, positioning itself for future growth opportunities.
Seadrill's success is heavily dependent on the overall health of the oil and gas industry, particularly the level of investment in offshore exploration and production. The company competes with other major drilling contractors, such as Transocean and Valaris, for contracts. The competitive landscape is influenced by factors such as rig availability, technological capabilities, and pricing strategies. Seadrill's ability to secure contracts at favorable rates is crucial for its financial performance.
The company's business model is inherently cyclical, with demand for drilling services fluctuating in response to changes in oil prices and global economic conditions. Seadrill must effectively manage its fleet utilization and pricing to navigate these cycles and maintain profitability. The company's investment in modern, high-specification rigs is intended to attract premium contracts and differentiate itself from competitors. However, this also requires significant capital expenditure and exposes the company to technological obsolescence risks.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
2.5%
Sector: -1.2%
-317% VS SCTR
Economic Moat Analysis
Seadrill's economic moat is assessed as None. The offshore drilling industry is highly competitive, with limited differentiation among service providers. While Seadrill possesses a fleet of modern drilling rigs, this asset base does not confer a sustainable competitive advantage due to the ease of replication and the cyclical nature of the industry.
The absence of significant switching costs further weakens Seadrill's competitive position. Oil and gas companies can readily switch between drilling contractors based on price, rig availability, and contract terms. This lack of customer loyalty limits Seadrill's ability to command premium pricing or secure long-term contracts.
Seadrill does not possess any significant intangible assets that would create a barrier to entry or provide a competitive edge. While the company has a reputation for operational expertise, this is not a unique asset and can be matched by other drilling contractors. The lack of proprietary technology or intellectual property further diminishes the company's moat.
The offshore drilling industry does not exhibit characteristics of efficient scale, as there are numerous competitors operating in the market. Seadrill's size and scale do not provide a significant cost advantage over smaller players. The company's cost structure is largely determined by factors such as rig maintenance, labor costs, and insurance expenses, which are relatively similar across the industry.
Network effects are also absent in the offshore drilling industry. The value of Seadrill's services does not increase as more customers use its rigs. The company's success is primarily dependent on its ability to secure contracts at competitive rates, rather than on the size or composition of its customer base.
Financial Health & Profitability
Seadrill's financial health presents a mixed picture. The company's most recent TTM revenue is $1.44 billion, with a net loss of $77 million. This contrasts with the previous year (FY2024) when the company reported a net income of $446 million on revenue of $1.39 billion. The shift from profitability to a net loss raises concerns about the company's ability to sustain positive earnings in the current market environment. The EBITDA for the TTM period is $47 million, which is relatively low compared to the company's market capitalization of $2.72 billion.
The company's free cash flow is significantly negative at -$2.96 billion, indicating that it is consuming cash rather than generating it. This is a major concern, as it suggests that the company may need to raise additional capital or reduce its spending in the future. The company's total cash balance is $402 million, while its total debt is $613 million. While the debt level is manageable, the negative free cash flow and low EBITDA raise questions about the company's ability to service its debt obligations.
Seadrill's current ratio of 2.03 indicates that it has sufficient current assets to cover its current liabilities. However, the company's profitability metrics are weak compared to the sector average. Its net margin of -5.4% is significantly lower than the sector average of 6.3%, and its ROE of -10.8% is also lower than the sector average of 6.9%. The company's gross margin of 44.0% is also lower than the sector average of 55.1%, indicating that it is less efficient at converting revenue into profit.
Analyzing the quarterly financial history reveals volatility in Seadrill's performance. While revenue has remained relatively stable, net income has fluctuated significantly. The company's operating margin has also varied, ranging from -423.2% in FY2020 to 29.7% in FY2024. This volatility reflects the cyclical nature of the offshore drilling industry and the company's sensitivity to changes in oil prices and demand for drilling services. The large negative free cash flows in FY2017 and the positive free cash flows in FY2020 and FY2021 are likely related to restructuring activities and asset sales.
Valuation Assessment
Seadrill's valuation is complex, given its recent financial performance and industry dynamics. The company's P/E ratio is not applicable (N/A) due to its recent net losses. The EV/EBITDA multiple of 17.7x is significantly higher than the sector average of 3.5x, suggesting that the company is overvalued relative to its earnings. This high multiple reflects the market's expectations for future growth and profitability, but also carries the risk of a valuation correction if the company fails to meet those expectations.
Given the negative free cash flow, a traditional FCF yield analysis is not meaningful. The company's market capitalization of $2.72 billion reflects investor sentiment and expectations for future performance, but it is not necessarily supported by its current financial results. The company's valuation is likely influenced by factors such as the potential for increased drilling activity, the value of its rig fleet, and the perceived quality of its management team.
Compared to its historical performance, Seadrill's valuation appears elevated. The company's past financial struggles and restructuring efforts have likely depressed its historical multiples. However, the current valuation reflects the market's belief that the company has turned a corner and is poised for future growth. This optimism is not fully supported by the company's recent financial results, which show a net loss and negative free cash flow.
A discounted cash flow (DCF) analysis would be necessary to determine a more precise intrinsic value for Seadrill. However, such an analysis would require making assumptions about future revenue growth, profitability, and capital expenditure, which are subject to significant uncertainty. Given the cyclical nature of the offshore drilling industry and the company's volatile financial performance, a DCF analysis would be highly sensitive to these assumptions.
Risk & Uncertainty
Seadrill faces several significant risks and uncertainties. The most prominent risk is the volatility of oil prices. A sustained decline in oil prices could reduce demand for offshore drilling services, leading to lower day rates and reduced rig utilization. This would negatively impact Seadrill's revenue and profitability. The company's financial performance is highly correlated with oil prices, making it vulnerable to market fluctuations.
Competition is another major risk. The offshore drilling industry is highly competitive, with numerous players vying for contracts. Increased competition could lead to price wars and reduced profitability for Seadrill. The company must effectively differentiate itself from competitors through technological innovation, operational efficiency, and customer service to maintain its market share.
Seadrill's leverage also poses a risk. While the company has reduced its debt through restructuring, it still has a significant amount of debt outstanding. This debt burden could limit the company's financial flexibility and make it more vulnerable to economic downturns. The company's ability to service its debt obligations is dependent on its ability to generate sufficient cash flow.
Regulatory risks are also relevant. The offshore drilling industry is subject to stringent environmental regulations and safety standards. Changes in these regulations could increase the company's operating costs and limit its ability to conduct drilling activities. The company must comply with all applicable regulations to avoid fines, penalties, and reputational damage.
Bulls Say / Bears Say
The Bull Case
BULL VIEWSeadrill's modern fleet of drilling rigs positions it to capitalize on increased demand for offshore drilling services as oil prices recover.
BULL VIEWThe company's recent restructuring has strengthened its balance sheet and improved its operational efficiency, setting the stage for future profitability.
BULL VIEWThe deepwater drilling market is poised for growth, and Seadrill is well-positioned to secure lucrative contracts with major oil and gas companies.
The Bear Case
BEAR VIEWSeadrill's high EV/EBITDA multiple suggests that the stock is overvalued, and a correction is likely if the company fails to meet expectations.
BEAR VIEWThe company's negative free cash flow and recent net losses raise concerns about its financial sustainability and ability to service its debt.
BEAR VIEWThe offshore drilling industry is highly cyclical and competitive, making it difficult for Seadrill to achieve sustained profitability.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score SDRL and 4,400+ other equities.
Seadrill Ltd exhibits a 69% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
-7.8%
Sector: 3.7%
Gross Margin
Pricing power and cost efficiency
44.0%
Sector: 52.7%
Operating Margin
Core business profitability
3.3%
Sector: 10.7%
Net Margin
Bottom-line profitability
-5.4%
Sector: 6.4%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
