Research from Water Tower Research, Water Tower Research

Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

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Equity Bottom-Up

<ul><li>Talos is trading at 2.3x and 2.1x our FY25 and FY26 adjusted EBITDA estimates, respectively, and at a 2025 free cash flow yield of 21%.</li><li>Our updated FY25 adjusted EBITDA estimate is $1.1 billion using average production of 93.4 Mboe/d (69% oil).</li><li>The midpoint of management’s FY25 production guidance is 92.5 Mboe/d (69% oil).</li></ul>

Talos is trading at 2.3x and 2.1x our FY25 and FY26 adjusted EBITDA estimates, respectively, and at a 2025 free cash flow yield of 21%.Our updated FY25 adjusted EBITDA estimate is $1.1 billion using average production of 93.4 Mboe/d (69% oil).The midpoint of management’s FY25 production guidance is 92.5 Mboe/d (69% oil).

Talos Energy Inc: Estimate Update; High Impact Exploration on Horizon