Can Borr Drilling’s 34% Monthly Surge Still Offer Value for Investors?

• If you are wondering whether Borr Drilling still offers value after its recent run, or if the easy money has already been made, you are in the right place.
• The stock has climbed about 13.7% over the last week and 34.3% in the past month, while still sitting on a 122.1% gain over five years. This naturally raises questions about the balance between potential upside and risk from here.
• Recent moves have been driven by improving sentiment around offshore drilling and tightening jack up rig markets. Day rates and utilization have trended higher across the sector, and investors are also responding to contract awards and fleet updates that suggest Borr's assets could stay in high demand if energy markets remain supportive.
• Borr Drilling currently scores a 4 out of 6 on our valuation checks, reflecting that it looks undervalued on several, but not all, metrics. Next we will unpack those different valuation approaches before finishing with a more holistic way to think about what the stock is really worth.

Borr Drilling delivered 12.5% returns over the last year. See how this stacks up to the rest of the Energy Services industry.

Approach 1: Borr Drilling Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting its future cash flows and then discounting them back to today, to account for risk and the time value of money.

For Borr Drilling, the latest twelve month Free Cash Flow is negative at about $35.7 Million, reflecting heavy investment and the cyclicality of offshore drilling. Analysts see a sharp turnaround, with Free Cash Flow expected to reach $205.5 Million by 2027. Beyond that, Simply Wall St extrapolates cash flows out to 2035, rising from about $107 Million in 2026 to roughly $761 Million in 2035, as utilization and day rates improve.

Using these projections in a 2 Stage Free Cash Flow to Equity model produces an estimated intrinsic value of $24.88 per share. Compared with the current share price, this implies the stock is trading at an 82.7% discount. This indicates the market is heavily discounting Borr’s future cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Borr Drilling is undervalued by 82.7%. Track this in your watchlist or portfolio, or discover 908 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Borr Drilling.

Approach 2: Borr Drilling Price vs Earnings

For profitable companies like Borr Drilling, the price to earnings (PE) ratio is a useful way to gauge how much investors are willing to pay today for each dollar of current earnings. It captures expectations for future growth as well as the perceived risk in those earnings.

In general, faster growing and more predictable businesses justify a higher PE, while cyclical or riskier names tend to trade on lower multiples. Borr currently trades on a PE of about 17.0x, which is slightly below the Energy Services industry average of roughly 18.7x and also below its broader peer group, which sits nearer 24.4x.

Simply Wall St’s Fair Ratio takes this a step further by estimating what PE Borr should trade on, given its specific earnings growth outlook, margins, risk profile, industry and market cap. For Borr, that Fair Ratio is 10.1x, notably lower than the current 17.0x. Because this metric is tailored to the company rather than just comparing it to peers, it suggests that, once you adjust for Borr’s risks and cyclicality, the market is paying a premium to what its fundamentals justify.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1447 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Borr Drilling Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply the stories investors tell about a company, expressed through their own assumptions for future revenue, earnings, margins and what they think a fair value should be.

A Narrative on Simply Wall St links three things together in a clear, easy to follow chain: the business story, the financial forecast that flows from that story, and the resulting fair value estimate you can compare with today’s share price.

Within the Community page on Simply Wall St, millions of investors use Narratives as an accessible tool to frame when to buy or sell by checking whether their Narrative fair value is above the current price, suggesting upside, or below it, suggesting limited return potential or downside risk.

Because Narratives are dynamically updated when new information arrives, like fresh earnings, new contracts, equity raises or regulatory shifts, your view of Borr Drilling can evolve in real time and may differ meaningfully from others. For example, a more optimistic investor might lean toward a higher fair value such as $4.25 based on strong contract momentum and margin expansion, while a more cautious investor could anchor to the lower analyst price target of $2.8, focusing instead on oversupply, payment risk and environmental headwinds.

Do you think there's more to the story for Borr Drilling? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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