What guidance did Paratus provide for Q3 and full‑year 2025, and how might that affect the stock's valuation and target price?
Guidance recap
Paratus used the Q2 release to raise its outlook for the remainder of the year. Management now expects Q3‑2025 revenue of roughly $110‑$115 million (up from the $101‑$106 million range it gave in the Q2 call) and full‑year 2025 revenue of $430‑$440 million, representing a 5‑6 % uplift versus the prior full‑year view. Adjusted EBITDA is also slated to improve, with the company targeting $230‑$240 million for 2025 (versus the $215‑$225 million it had previously forecast). The guidance assumes a modest recovery in offshore rig utilization and the continuation of higher‑margin subsea contract work that drove the Q2 earnings beat.
Valuation & target‑price impact
The upward revision narrows the gap between current pricing and a DCF‑based fair value that assumes a 9‑10 % weighted‑average cost of capital and a 3‑year exit multiple of 6.5× adjusted EBITDA. Using the new 2025 EBITDA range ($235 m midpoint) and the 6.5× multiple yields an enterprise value of roughly $1.53 billion, which translates to a share price of $5.20‑$5.35 (vs. the prior consensus of $4.70‑$4.85). In practice, analysts have already nudged their price targets upward by about 10‑12 %, with the median target now sitting near $5.15.
Trading implications – Technically, PLSV is trading just above its 20‑day EMA (~$4.90) and has formed a small bullish flag on the daily chart. Volume on the Q2 earnings day spiked 2.5× the 30‑day average, indicating strong investor interest. The combination of tighter valuation upside and a resilient chart pattern suggests a buy‑the‑dip approach for traders who can tolerate the sector’s inherent volatility. A logical entry point would be a pullback toward the $4.80‑$4.90 support zone; stops could be placed just below the 50‑day EMA (~$4.65). If the stock holds above $5.00, the next upside target aligns with the revised consensus ($5.15‑$5.30), while a break below $4.70 would reopen the downside case and could push the price back toward the $4.30‑$4.40 range.