Talos Energy

TALO

Oil & Gas Exploration & Production · Energy

Price

$14.92

+0.80 (+5.67%)

Market Cap

$2.49B

Winston Score

Winston is worried

Weak fundamentals across most pillars.

Share count rising — dilution

+114.2% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 81.8M (2021) → 175.1M (2025)

Talos Energy is an oil and gas company that drills for and produces crude oil and natural gas. It operates primarily in the Gulf of Mexico, working on offshore platforms in deep and shallow water. The company sells its oil and natural gas to refiners, traders, and energy companies.

Talos makes money by selling the oil and natural gas it pulls out of the ground. It operates almost entirely in the United States, focused on the Gulf of Mexico, with some presence in Mexico's offshore waters as well. The company has built technical expertise in deepwater drilling, but it carries significant debt and is currently unprofitable at the operating level, which makes it sensitive to swings in oil prices. The biggest risk Talos faces is that falling oil prices could make its already thin margins worse, while its main growth opportunity lies in expanding production through new well development and potential acquisitions.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-7.9% YoY

YoY Growth Rate

Revenue declining

EPS Growth

<−1,000% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (1%)

Research and development spending

Insider Activity

25.5%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$386M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

Talos Energy's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

16.5%

Thin — 16.5% gross margin

Operating Margin

5.4%

Thin — 5.4% operating margin

ROCE

0.8%

Weak — 0.8% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

-15.4%

Shrinking sales (-15.4% YoY)

EPS YoY

-3010.4%

Earnings shrinking (-3010.4% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency

0/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

N/A

Data not available

FCF Margin

18.9%

Converts sales into free cash efficiently (18.9%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.66

Moderate — manageable debt (0.66)

Interest Cover

N/A

Data not available

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Valuation

P/E Ratio (TTM)

N/M

Negative earnings — P/E not meaningful

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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