TALOS ENERGY INC.

Recommendation history

• Q1 2025HoldHold: Target delivered strong 2Q results—$110 million of revenue and approximately $56 million of adjusted EBITDA—with 99% of 2022 revenue contracted and 75% backed by minimum revenue commitments. The West Texas government project is on schedule and should drive further absolute EBITDA growth, but utilization, contract renewal beyond the initial one-year term plus six-month option, and variable revenue remain unquantified; government revenue is expected to reach approximately 73% of FY2022 revenue, creating concentration risk.
• Q1 2024HoldHold: Snap delivered strong Q2 revenue growth of 153% year over year to $181.7 million, with 173 million DAUs, $1.05 ARPU and gross margin expanding to 19%. However, the business remains deeply unprofitable, with a $194.0 million adjusted EBITDA loss and $443.1 million net loss, while the auction transition is reducing ad pricing and Android improvements are not expected to matter until Q2 2018.
• Q3 2023HoldH.B. Fuller delivered strong underlying volume growth and Q4 adjusted EPS of $0.75, while guiding to FY18 revenue above $3 billion, adjusted EBITDA of about $465 million and adjusted EPS of $3.10-$3.40 after the Royal acquisition. The bull case is substantial synergy and margin recovery; the tension is that raw-material inflation still outpaced pricing in Q4, FY18 net volume growth may be only 1%-2%, and integration benefits remain largely forward-looking.
• Q4 2024HoldHold: Orion delivered Q4 adjusted EBITDA of $63.2 million and full-year EBITDA of $267.3 million, but 2020 guidance is a wide $250 million-$280 million despite expected Rubber pricing gains. The business is becoming less exposed to feedstock differentials and has solid cash generation, yet volumes are expected to fall 3%-4% in both segments, Specialty has no sequential Q1 recovery, and the low end of guidance is below Q4 annualization.
• Q1 2023HoldSnap delivered $204 million of advertising revenue, up 59% year over year, with ad impressions up more than 400% and gross margin expanding to 21%. However, CPMs fell more than 60% year over year, net user additions slowed to 4.5 million, and management acknowledged that the upcoming redesign could disrupt engagement; with no quantified path to pricing recovery or user acceleration, the risk/reward is mixed.
• Q2 2023HoldVirtus delivered a strong Q2: long-term AUM rose 2.7% sequentially to $89.8 billion, net flows swung to $1.3 billion, adjusted EPS reached $2.97, and adjusted operating margin expanded to 34%. However, the outlook remains dependent on performance-led retail demand and lumpy institutional wins, while the SGA acquisition raises pro forma net leverage to 1.3x and reduces working capital to $70 million; the risk/reward is improved but not a clean buy.
• Q4 2022HoldHold: Virtus delivered $1.75 adjusted EPS, but the improvement was primarily buyback-driven as AUM fell 3% sequentially to $45.4 billion, net outflows reached $0.4 billion, and adjusted operating margin compressed to 28% from 31%. The pending $40.2 billion RidgeWorth acquisition could materially improve scale and distribution, but financing mix, leverage, integration, and whether RidgeWorth adds net flows remain unresolved.