Talos Energy Inc.

TALO

EnergyOil & Gas Exploration & ProductionNYSE

$15.31

Market Cap: $2.56B

Talos Energy Inc. (TALO) Valuation Summary

Updated Apr 6, 2026 22:28

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Revenue DCF 5Y	—	N/A	—
Revenue DCF 10Y	$2.30 – $9.88	$5.73	-64.0%
▸ Trading Multiples
EV/Revenue	$7.11 – $27.40	$18.04	+13.4%

Valuation History

DCF Analysis

Talos Energy Inc. (TALO) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$5.73

Market Price

$15.31

Upside / Downside

-62.6%

Verdict

Overvalued

Using a Revenue DCF model with operating margin convergence from -5.9% to a target of 15.8% over 5 years, discounted at a WACC of 8.7%, Talos Energy Inc. (TALO) has an intrinsic value of $5.73 per share (range: $2.30 – $9.88).

Key Assumptions

Current Operating Margin

-5.9%

Target Operating Margin

15.8%

WACC

8.7%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

14.2%

Target CapEx/Rev

72.2%

D&A/Revenue

48.1%

Tax Rate

0.0%

Operating margin fades linearly from the current level to the industry target over the 5-year projection. CapEx intensity fades from the historical average to a maintenance level (D&A × 1.5). Tax is only applied when operating income is positive (NOL shield).

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	1,699	-4.6%	-1.6%	-27	-27	817	(340)	-38	488	468
2027	1,733	2.0%	2.7%	47	47	834	(447)	4	430	380
2028	1,741	0.5%	7.1%	123	123	838	(550)	1	410	333
2029	1,752	0.6%	11.4%	200	200	843	(655)	1	387	289
2030	1,721	-1.8%	15.8%	271	271	828	(743)	-4	359	247
2031	1,863	8.3%	15.8%	293	293	897	(913)	16	261	165
2032	1,998	7.2%	15.8%	315	315	962	(1,095)	15	166	97
2033	2,122	6.2%	15.8%	334	334	1,021	(1,285)	14	56	30
2034	2,230	5.1%	15.8%	351	351	1,073	(1,481)	12	-68	-34
2035	2,321	4.1%	15.8%	366	366	1,117	(1,675)	10	-203	-92

Enterprise Value Bridge

Sum of PV(FCFF)1,883

Terminal Value (Gordon Growth at 3.0%)0

PV of Terminal Value0

Enterprise Value1,883

(–) Net Debt879

Equity Value1,004

(÷) Shares Outstanding175

Fair Value per Share$5.73

Note:Terminal value is $0 because Year 5 FCFF is negative. The company's operating margin convergence does not fully offset reinvestment needs within 5 years. See the sensitivity matrix for scenarios where the model produces a positive terminal value (higher target margin or lower WACC).

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	9.8%	12.8%	15.8%	18.8%	21.8%
6.7%	$3	$4	$6	$8	$10
7.7%	$2	$4	$6	$8	$9
8.7%	$2	$4	$6	$7	$9
9.7%	$2	$4	$6	$7	$9
10.7%	$2	$4	$5	$7	$8

Current price: $15.31. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at 11.3% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Trading Multiples

Fair Value

$19.87

Market Price

$15.31

Upside / Downside

+29.8%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Talos Energy Inc. (TALO) has a fair value of $19.87 based on 7 comparable companies in the Oil & Gas Exploration & Production industry.

EV/Revenue Valuation — Oil & Gas Exploration & Production

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Talos Energy Inc.TALO	2,681	2.0x	1.8x
Crescent Energy CompanyCRGY	4,427	2.8x	2.2x
SM Energy CompanySM	3,503	1.7x	0.8x
Calumet, Inc.CLMT	3,100	0.8x	0.8x
Northern Oil and Gas, Inc.NOG	2,770	2.5x	2.3x
Genesis Energy, L.P.GEL	2,160	3.2x	3.3x
Expro Group Holdings N.V.XPRO	1,891	1.2x	1.2x
Kimbell Royalty Partners, LPKRP	1,634	6.1x	6.4x
Industry Median		2.5x	2.2x
(*) Revenue		1,780	1,994
= Enterprise Value		4,377	4,341
(-) Net Debt		879	879
Equity Value		3,498	3,462
(/) Outstanding shares		175	175
Fair Price		$20	$20

Selected Fair Value (avg of trailing + forward)

$19.87

+29.8%

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Model

Range

Fair Value

Upside

▸ Discounted Cash Flow

Revenue DCF 5Y

—

N/A

—

Revenue DCF 10Y

$2.30 – $9.88

$5.73

-64.0%

▸ Trading Multiples

EV/Revenue

$7.11 – $27.40

$18.04

+13.4%

DCF Analysis

Talos Energy Inc. (TALO) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$5.73

Market Price

$15.31

Upside / Downside

-62.6%

Verdict

Overvalued

Key Assumptions

Current Operating Margin

-5.9%

Target Operating Margin

15.8%

WACC

8.7%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

14.2%

Target CapEx/Rev

72.2%

D&A/Revenue

48.1%

Tax Rate

0.0%

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	1,699	-4.6%	-1.6%	-27	-27	817	(340)	-38	488	468
2027	1,733	2.0%	2.7%	47	47	834	(447)	4	430	380
2028	1,741	0.5%	7.1%	123	123	838	(550)	1	410	333
2029	1,752	0.6%	11.4%	200	200	843	(655)	1	387	289
2030	1,721	-1.8%	15.8%	271	271	828	(743)	-4	359	247
2031	1,863	8.3%	15.8%	293	293	897	(913)	16	261	165
2032	1,998	7.2%	15.8%	315	315	962	(1,095)	15	166	97
2033	2,122	6.2%	15.8%	334	334	1,021	(1,285)	14	56	30
2034	2,230	5.1%	15.8%	351	351	1,073	(1,481)	12	-68	-34
2035	2,321	4.1%	15.8%	366	366	1,117	(1,675)	10	-203	-92

Enterprise Value Bridge

Sum of PV(FCFF)1,883

Terminal Value (Gordon Growth at 3.0%)0

PV of Terminal Value0

Enterprise Value1,883

(–) Net Debt879

Equity Value1,004

(÷) Shares Outstanding175

Fair Value per Share$5.73

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	9.8%	12.8%	15.8%	18.8%	21.8%
6.7%	$3	$4	$6	$8	$10
7.7%	$2	$4	$6	$8	$9
8.7%	$2	$4	$6	$7	$9
9.7%	$2	$4	$6	$7	$9
10.7%	$2	$4	$5	$7	$8

Current price: $15.31. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at 11.3% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Trading Multiples

Fair Value

$19.87

Market Price

$15.31

Upside / Downside

+29.8%

Verdict

Undervalued

EV/Revenue Valuation — Oil & Gas Exploration & Production

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Talos Energy Inc.TALO	2,681	2.0x	1.8x
Crescent Energy CompanyCRGY	4,427	2.8x	2.2x
SM Energy CompanySM	3,503	1.7x	0.8x
Calumet, Inc.CLMT	3,100	0.8x	0.8x
Northern Oil and Gas, Inc.NOG	2,770	2.5x	2.3x
Genesis Energy, L.P.GEL	2,160	3.2x	3.3x
Expro Group Holdings N.V.XPRO	1,891	1.2x	1.2x
Kimbell Royalty Partners, LPKRP	1,634	6.1x	6.4x
Industry Median		2.5x	2.2x
(*) Revenue		1,780	1,994
= Enterprise Value		4,377	4,341
(-) Net Debt		879	879
Equity Value		3,498	3,462
(/) Outstanding shares		175	175
Fair Price		$20	$20

Selected Fair Value (avg of trailing + forward)

$19.87

+29.8%