Talos Energy TALO: 4.7% Rally Leaves Stock 41% Above GF Value
Talos Energy jumped 4.7% to $17.77, but GF Value of $12.57 signals 41% overvaluation. No insider buying and negative cash flow raise caution for energy stock.
TALOS ENERGY INC. currently carries an Alpha Score of n/a, giving AlphaScala's model a neutral read on the setup.
Talos Energy shares jumped 4.7% on October 16 to $17.77, extending a yearlong rally that has lifted the stock from a 52-week low of $8.97. The latest price left the stock trading 41% above the $12.57 intrinsic value estimate produced by the GF Value model, according to GuruFocus's proprietary analysis.
The valuation model, which blends historical multiples, past growth, and forward projections, assigns TALO a "significantly overvalued" label, the analysis shows. The company has no trailing P/E because it remains unprofitable; its forward P/E of 10.3x sits above the five-year median of 8.4x, a comparison the GF Value analysis uses to show premium pricing relative to the company's history.
GuruFocus's GF Score, a composite of profitability, financial strength, growth, valuation, and momentum, ranks TALO at 57 out of 100, described as average. The components show a mixed picture. Profitability and financial strength each scored 5 out of 10. Growth received the same score. Valuation ranked 3 out of 10, and momentum scored 1 out of 10.
Insider selling over the past year totaled $248.4 million, with no insider purchases, according to the analysis. Among the nine institutional investors that hold TALO positions, six added to their stakes in recent quarters while three trimmed. The net selling signals a lack of confidence from insiders, the analysis said.
AlphaScala's own scoring system does not assign TALO an Alpha Score, leaving the stock Unscored in the Energy sector. The company is cash-flow-negative, a factor that the GF Value model considers in its intrinsic value estimate.
TALO shares closed at $17.77 on October 16, near the top of a 52-week range that runs from $8.97 to $18.73.
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