Valuation Scorecard: Stock Rating B-Positive (2/27/24)-Helix Energy Solutions Group Inc (HLX).

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At the current price of $10, what are market expectations regarding Helix Energy Solutions Group’s future operating performance? Over the next 6 years, Helix Energy Solutions Group shares will need to reach $17 to achieve average annual stock market performance of 9.0%. Helix Energy Solutions Group’s stock price will need to reach $20 by 2028 to achieve upper quartile performance.

Executive Summary

  • Key Helix Energy Solutions Group characteristics: above average financial strength, stability, average profitability, and below average expected growth. A big positive influence on Helix Energy Solutions Group’s valuation is its superior Profitability.
  • Average valuation, leading shareholder returns. Current valuation levels are average relative to the Helix Energy Solutions Group Peer Group. Recent market returns have significantly outperformed the Helix Energy Solutions Group Peer Group. Total shareholder returns expected to seriously lag the overall equity market. Based on current investor expectations, Helix Energy Solutions Group shares should reach a level of $15 by 2028 — an 6.8% per year total shareholder return. A 2028 stock price of $17 would reflect median performance and a price of $20 would be required to reach upper quartile performance.
  • Helix Energy Solutions Group’s historical growth is average. Historical growth has been average relative to the Helix Energy Solutions Group Peer Group and forecasted growth is relatively below average. Asset Growth, and EPS Growth have lagged. These factors have negatively affected market perceptions of Helix Energy Solutions Group. Helix Energy Solutions Group’s historical income statement growth has been higher than growth in the balance sheet. Revenue growth has exceeded asset growth; earnings growth has exceeded equity growth resulting in an improving return on equity.
  • Profitability is slightly above average. The company has very low cash and will have to work to generate attractive investments and improve valuation.
  • Helix Energy Solutions Group’s risk profile is favorable. Overall variability has been above average with above average revenue variability, relatively low E.P.S. variability, and above average stock price volatility. Financial Strength is only average and earnings’ expectations are relatively high. The debt/capital ratio has declined.

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