Skip to content

[RESEARCH BLOG] · 2026-10-09

Borr Drilling Limited (BORR) – Buy Signal Amid Recovery Regime and Insider Accumulation

By Pierre Brunelle · Founder & Research Lead

BORRBUYRECOVERYbuy flip

Borr Drilling Limited closed at $4.78, up 3.69% on the US session of 2026‑10‑09. The LOPJLB signal card now flags a BUY directional signal with a perfect Score 5 while the broader market regime is classified as RECOVERY. The combination of a rising price, insider buying and a favorable valuation backdrop has pushed the stock into the “Growth Compounder” archetype on the LOPJLB platform.

News / Catalysts

Fundamentals and Valuation

Borr Drilling’s balance sheet and earnings metrics reflect a company that has navigated a difficult transition period but is now emerging with a more attractive valuation profile. The trailing twelve‑month (TTM) price‑to‑earnings ratio sits at ‑5.41, a negative figure driven by last year’s modest earnings loss. Forward‑looking, analysts price the stock at a P/E FWD of 40.79, implying expectations of earnings acceleration as new contracts materialize.

The company trades at a price‑to‑book (P/B) of 1.35, modestly above book value, while the EV/EBITDA multiple stands at 9.76, comfortably below the industry average of roughly 12‑14x for offshore drilling peers. A PEG ratio of 0.27 underscores the market’s view that earnings growth is expected to outpace the current valuation.

Profitability has improved markedly. Gross margins have risen to 30.47%, operating margins to 20.85%, and net margins, though still negative at ‑23.69%, have narrowed considerably from the double‑digit deficits recorded in 2022‑2023. Return on invested capital (ROIC) remains negative at ‑12.77%, reflecting lingering capital intensity, but return on equity (ROE) has turned positive in recent quarters, now at ‑21.28% (still below breakeven). The company’s debt‑to‑equity ratio is high at 258.5, a legacy of financing for rig acquisition, yet the recent cash‑flow turn‑around suggests debt service may become more manageable.

Revenue has shown a clear upward trajectory over the past five years, climbing from $307.5 million in 2020 to $1.02 billion in 2025, a compound annual growth rate (CAGR) of roughly 30%. Earnings per share (EPS) moved from a loss of ‑4.06 in 2020 to a modest $0.33 in 2024, before slipping to $0.17 in 2025 as the company invested heavily in new rigs and contract execution. Notably, free cash flow (FCF) turned positive in 2025 at $127.4 million, a stark contrast to the negative cash‑flow years of 2020‑2024.

The analyst consensus remains cautious, with a “Hold” recommendation and an average target price of $4.78, essentially the current market level. However, the LOPJLB methodology assigns a Value score of 8.00, a Growth score of 52.00, a GARP score of 58.40, and a Quality score of 40.44, positioning the stock firmly in the “Growth Compounder” archetype.

MetricValue
P/E (TTM)–5.41
P/E (FWD)40.79
EV/EBITDA9.76
P/B1.35
PEG0.27
Gross Margin30.47 %
Operating Margin20.85 %
Net Margin–23.69 %
Debt/Equity258.5
Market Cap$1.30 B

The valuation snapshot underscores a stock that is cheap relative to its asset base and future earnings potential, especially when measured against the forward earnings multiple. The narrowing of net losses, the positive cash‑flow swing, and the expanding contract backlog collectively suggest that the current price may not fully reflect the upside embedded in the recovery of offshore shallow‑water drilling activity.

ETF Ownership

Borr Drilling’s institutional exposure is relatively concentrated. The only listed ETF holder is the LCO (iShares Global Energy ETF), which accounts for 1.01 % of the float and ranks #37 among the fund’s holdings. While the percentage is modest, the presence of a large, diversified energy ETF adds a layer of liquidity and can serve as a catalyst for incremental demand should the fund rebalance toward higher‑growth energy services stocks.

ETFWeight
LCO1.01 %

Concentrated ETF ownership can amplify price movements when the fund adjusts its sector allocations, especially in a market regime that is currently classified as RECOVERY. Investors should monitor any quarterly rebalancing disclosures from LCO for potential secondary effects on BORR’s share price.

LOPJLB Signal Read

The LOPJLB platform currently issues a BUY directional signal for Borr Drilling, paired with a RECOVERY market regime. The composite PERF score of 27.40 and FUND quality score of 40.44 place the stock in the upper‑mid tier of the platform’s ranking system. The breakdown of the underlying factor scores—Value = 8.00, Growth = 52.00, GARP = 58.40, Quality = 40.44—highlights a strong growth orientation tempered by a modest value component.

The archetype assigned to BORR is Growth Compounder, indicating that the model expects earnings to compound at an accelerated pace while the valuation remains reasonable relative to future growth. The signal’s Score 5 reflects maximum confidence within the LOPJLB methodology, driven by the convergence of insider buying, improving fundamentals, and a market environment that favors cyclical recovery plays.

Readers are encouraged to explore the interactive chart above on this page for a visual overlay of the technical and quantitative signals that feed into the BUY rating. For a deeper dive into the methodology behind the signal stack, visit the LOPJLB methodology page at https://www.lopjlb.com/methodology.

Take the next step:

The information provided herein is for research purposes only and does not constitute investment advice. All investors should conduct their own due diligence and consider their risk tolerance before making any investment decisions.

This post is independent quantitative research, not investment advice. LOPJLB signals are model outputs derived from price, volume, and fundamentals. Past backtests do not guarantee future results. Position sizing, execution, and risk management remain the reader's responsibility.

Open BORR signal detail → · Open screener → · Methodology