Evaluating Borr Drilling (NYSE:BORR) After Earnings Setback And Five-Rig Fleet Expansion

Earnings setback and fleet expansion put Borr Drilling (NYSE:BORR) in focus

Borr Drilling (NYSE:BORR) is back on investors’ radar after reporting a fourth quarter 2025 net loss alongside full-year earnings and closing a five-rig acquisition from Noble Corporation for US$360 million.

See our latest analysis for Borr Drilling.

Borr Drilling’s recent fourth quarter loss and fleet expansion come after a strong run in the shares. The latest share price is US$5.78 and the 90 day share price return is 93.31%, while the 1 year total shareholder return of 95.50% contrasts with a slightly negative 3 year total shareholder return and a 5 year total shareholder return of 132.41%. This suggests momentum has recently picked up again after a choppy period.

If Borr’s move for more rigs has caught your attention, this could be a good moment to scan other energy exposed names through our screener of 22 elite gold producer stocks.

With earnings under pressure, a fresh US$360 million rig purchase and the share price already well ahead over 12 months, a key question emerges: is Borr Drilling still mispriced, or are markets already baking in the next leg of growth?

Most Popular Narrative: 24.6% Overvalued

The most followed narrative pegs Borr Drilling’s fair value at US$4.64, below the last close at US$5.78, setting up a clear valuation gap to unpack.

The current stock price appears to reflect investor expectations that oil demand will remain robust over the long term, supported by ongoing population growth and energy security needs, despite rising global policy and technological momentum towards renewables, which could ultimately reduce future rig utilization and pressure revenues beyond the current contract horizon.

Read the complete narrative.

Want to see what is sitting underneath that fair value cut? Revenue assumptions, shrinking margins, and a future earnings multiple that may surprise you. The full narrative joins those dots.

Result: Fair Value of $4.64 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if energy demand and shallow water activity stay firm, or modern jack up supply tightens further, today’s cautious assumptions could quickly look too conservative.

Find out about the key risks to this Borr Drilling narrative.

Another View: Market P/E Tells a Different Story

Our valuation work using the SWS fair ratio suggests a more cautious picture than the bullish cash flow view. Borr trades on a P/E of 24.5x, which is below peers at 33.3x, yet above its fair ratio of 15.8x. That gap points to potential valuation risk if sentiment cools.

Our numbers compare Borr not only to the US Energy Services industry, but also to the level where the fair ratio suggests the market could eventually settle. If earnings or contract activity disappoint, which of these anchors would you consider more informative: the sector P/E or the fair ratio signal?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If the mix of optimism and caution here feels familiar, do not sit on the sidelines. Instead, weigh the trade off yourself with 2 key rewards and 2 important warning signs.

Looking for more investment ideas?

You have already done the hard work by digging into Borr Drilling, so do not stop here. Take a few minutes to scan other ideas that could suit your style before the market moves on.

• Target quality at a discount by running your eye over our list of 53 high quality undervalued stocks that pair stronger fundamentals with more modest pricing.
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• Prioritise resilience by checking 80 resilient stocks with low risk scores that screen for steadier balance sheets and lower overall risk scores.

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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