SOC

We rate Sable Offshore Corp. (SOC) as Avoid with a composite score of 21.9/100 at a current price of $9.36. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.

The rating is primarily driven by strength in investment (22th percentile) and momentum (16th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (5th percentile) and quality (11th percentile) tempers our overall conviction. We assign a No Moat rating (20/100), High uncertainty, and Poor capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; valuation compression risk if growth disappoints. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Sable Offshore Corp. holds a top-quartile position (#0 of 50) within the Mining sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 21.9/100 places it at rank #4831 in our full 7,333-stock universe. At $1.7B in market capitalization, Sable Offshore Corp. is a small-cap player in the Mining space, which limits certain scale advantages but may allow for more agile strategic execution.

Momentum indicators (16th percentile) suggest caution regarding the near-term price trend. Revenue growth data is unavailable, limiting our ability to confirm whether momentum is fundamentally supported.

Margin data is not available for Sable Offshore Corp., which limits our assessment of the company's cost structure and operating efficiency. We rely on factor-based signals to infer business quality in the absence of detailed margin data.

At a current price of $9.36, Sable Offshore Corp. is trading at a premium to fundamental value. Our value factor score of 16/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at P/B of 3.7x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a High uncertainty rating to Sable Offshore Corp.. Key risk factors include elevated market sensitivity (beta of 2.32), below-average price stability (5th percentile), weak quality scores (11th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 2.32); below-average price stability (5th percentile); weak quality scores (11th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 5th percentile and quality factor at the 11th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (0% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate Sable Offshore Corp.'s capital allocation as Poor. Key concerns include low returns on equity (-173.4%), weak asset returns (ROA -36.6%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — Sable Offshore Corp. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, Sable Offshore Corp. receives a Avoid rating with a composite score of 21.9/100 (rank #4831 of 7,333). Our quantitative framework assigns a No Moat (20/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 14/100.

Our analysis does not support a constructive view on Sable Offshore Corp. at this time. The combination of limited competitive advantages, high uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.