Talos Energy (TALO)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 19.39% | 21.68% | 56.04% | 45.12% | -6.26% |
| Operating profit margin | 8.76% | 12.46% | 44.56% | 30.10% | -26.11% |
| Pretax margin | -3.62% | 8.69% | 23.27% | -14.83% | -74.66% |
| Net profit margin | -3.87% | 12.85% | 23.12% | -14.70% | -80.84% |
The trend analysis of Talos Energy's profitability ratios reveals fluctuations in its margins over the years.
1. Gross Profit Margin:
- The gross profit margin has shown significant improvement from -6.26% in 2020 to 56.04% in 2022 before declining to 19.39% in 2024.
- The company experienced a substantial increase in 2021 and 2022, indicating better cost management and revenue generation.
- However, the decline in 2024 may suggest increased costs or pricing pressures impacting profitability.
2. Operating Profit Margin:
- Talos Energy's operating profit margin improved from -26.11% in 2020 to 44.56% in 2022 but decreased to 8.76% in 2024.
- The significant improvement in 2021 and 2022 indicates operational efficiencies and cost controls that positively impacted profitability.
- The decline in 2024 suggests possible challenges in managing operating expenses or generating sufficient operating income.
3. Pretax Margin:
- The pretax margin fluctuated over the years, from -74.66% in 2020 to 23.27% in 2022 before dropping to -3.62% in 2024.
- The company showed strong recovery from significant losses in 2020 to profitability in 2022.
- The negative pretax margin in 2024 may indicate challenges such as increased taxes or one-time expenses affecting profitability.
4. Net Profit Margin:
- Talos Energy's net profit margin improved from -80.84% in 2020 to 23.12% in 2022 but decreased to -3.87% in 2024.
- The company successfully reversed losses into profits by 2022 but faced a decline in net profitability in 2024.
- The negative net profit margin in 2024 suggests challenges in managing costs or declining revenues impacting overall profitability.
In conclusion, Talos Energy has shown varying levels of profitability over the years, with improvements seen in 2021 and 2022, followed by some decline in 2024. The company may need to focus on cost management, revenue generation, and operational efficiencies to sustain and enhance its profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.79% | 3.77% | 24.07% | 13.54% | -5.31% |
| Return on assets (ROA) | -1.23% | 3.89% | 12.49% | -6.61% | -16.43% |
| Return on total capital | 4.21% | 8.43% | 42.51% | -6.76% | -35.68% |
| Return on equity (ROE) | -2.77% | 8.69% | 32.77% | -24.05% | -50.25% |
An analysis of Talos Energy's profitability ratios reveals fluctuations in the company's performance over the years. The Operating return on assets (Operating ROA) showed a significant improvement from -5.31% in 2020 to 24.07% in 2022, indicating enhanced operational efficiency. However, the ratio declined to 3.77% in 2023 and further to 2.79% in 2024, possibly reflecting challenges in maintaining profitability.
Similarly, the Return on assets (ROA) displayed volatile trends, starting from a negative value of -16.43% in 2020, then improving to 12.49% in 2022, but decreasing to 3.89% in 2023. The ratio dipped further into negative territory at -1.23% in 2024, indicating a divergence between company profits and assets utilization efficiency.
The Return on total capital exhibited a sharp decline from -35.68% in 2020 to -6.76% in 2021, followed by a significant recovery to 42.51% in 2022. However, the ratio decreased to 8.43% in 2023 and 4.21% in 2024, indicating fluctuations in the company's ability to generate returns on its total invested capital.
Moreover, the Return on equity (ROE) showed a downward trend, starting at -50.25% in 2020, improving to 32.77% in 2022, and then declining to 8.69% in 2023. The ratio further decreased to -2.77% in 2024, reflecting challenges in generating profits for the shareholders relative to their equity investment.
Overall, the analysis of Talos Energy's profitability ratios suggests a mixed performance with fluctuations in profitability and efficiency metrics over the years, highlighting the need for the company to focus on improving operational effectiveness and capital utilization to enhance long-term profitability.