VALValaris Limited
Is the business good?
A genuinely good business: earnings fully cash-backed (1.9×), margins widening, and elite returns on assets.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Operating margin has widened over the past few years, the business is getting more profitable per dollar of sales.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 27% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is VAL?
Valaris Limited earns 5.1% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 4.0 points below what the capital costs: growth destroys value
- Operating margin
- 11%
Operating margin · Oil & Gas Drilling median 5.0% · 12 months to Q2 2026
- Cash conversion
- 1.88×
Cash conversion · 2.17× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −1.3%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2020 | −304% |
| FY2021 | −73% |
| FY2022 | 2.3% |
| FY2023 | 3.0% |
| FY2024 | 15% |
| FY2025 | 20% |
Details›
- Gross margin12 months to Q2 2026
- 25%
- Operating margin12 months to Q2 2026
- 11%
- Net margin12 months to Q2 2026
- 44%
- Free cash flow margin
- −1.1%
- Revenue, trailing twelve months
- $2.14B
- Free cash flow, trailing twelve months
- −$24M
- Net income, trailing twelve months
- $940M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 5.1%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.