TechnipFMC: A Strong Performer, But Is It Time to Buy the Stock?

TechnipFMC plc FTI has been on an impressive run, delivering solid gains over the past six months. The oilfield services provider has gained more than 18% during this period, significantly outperforming the S&P 500. More notably, it has fared better than industry peers like Oceaneering International OII and Core Labs CLB, both of which remain in negative territory. Given this strong momentum, should investors consider buying TechnipFMC stock, wait for a better entry point, or book profits? Let’s take a closer look at its fundamentals.FTI, OII and CLB Six-Month Stock Performance Image Source: Zacks Investment ResearchReasons to BuyTechnipFMC’s Subsea 2.0 platform has helped differentiate the company by simplifying subsea architecture, reducing project complexity, and improving margins. This next-generation, environmentally friendly all-electric system has positioned the company well for growth. In 2024, TechnipFMC’s backlog reached a record $14.4 billion, with inbound orders increasing 5% year over year to $11.6 billion. This strong backlog supports revenue visibility and margin expansion, leading to an upward revision in 2025 subsea revenue guidance to $8.4-$8.8 billion. Adjusted EBITDA margin is also projected to improve to 19-20%, reinforcing the company’s growth trajectory.The company’s integrated engineering, procurement, construction, and installation (iEPCI) model continues to secure high-value contracts. Notable 2024 wins include the Mero 3 HISEP project for Petrobras, the Shell Sparta project in the Gulf of Mexico, and a carbon capture initiative with the Northern Endurance Partnership (bp, Equinor, and TotalEnergies). These projects highlight TechnipFMC’s expanding technological edge and growing opportunities in offshore and renewable markets.TechnipFMC has also been aggressive in returning capital to shareholders. In 2024, its board approved an additional $1 billion in share repurchases, bringing the total buyback program to $1.8 billion. In 2025, management expects shareholder distributions to increase by at least 30%. This strong capital return strategy underscores the company’s confidence in its financial health and long-term growth.Additionally, TechnipFMC is well-positioned to benefit from strong offshore market demand, with increasing deepwater activity in key regions like the U.S. Gulf of Mexico, Brazil, Guyana, Suriname, and Africa. Expanding investments in the Middle East further diversify its revenue base, helping mitigate risks associated with any single geographic market.The company has also consistently beaten earnings expectations, with a trailing four-quarter earnings surprise of 48.7% on average.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Reasons to SellDespite its strengths, TechnipFMC’s dividend yield of 0.67% lags its industry peers, making it less attractive to income-focused investors. The company primarily relies on stock buybacks rather than dividends for shareholder returns. Image Source: Zacks Investment ResearchAnother challenge is the cyclical nature of offshore investments. TechnipFMC’s revenues are closely tied to oil and gas capital expenditures, which are directly influenced by crude price volatility. If oil prices decline significantly, energy companies could delay or cancel subsea projects, negatively impacting future revenue growth.While subsea growth remains strong, the Surface Technologies segment has struggled. Revenues from this segment fell by $126 million in 2024, hurt by weak activity in North America, Europe and Latin America, as well as the sale of its Measurement Solutions business. This trend is expected to continue into 2025, with another 2% revenue decline projected, which could weigh on the company’s overall financial performance.TechnipFMC’s global operations expose it to geopolitical risks, including regulatory hurdles, political instability, and local content requirements in key regions like Brazil and Africa. These factors could disrupt operations and increase costs, potentially impacting profitability.Finally, while TechnipFMC boasts a record $14.4 billion backlog, converting these orders into revenues remains a challenge. Project delays due to regulatory approvals, geopolitical uncertainties, or client decisions could lead to cash flow volatility and missed earnings expectations. Investors should closely monitor execution timelines to ensure that these orders translate into tangible financial gains.Final Verdict: A Hold for NowTechnipFMC has delivered a strong performance, with a growing backlog, robust offshore demand, and solid shareholder returns. However, risks related to oil price fluctuations, segmental weakness, and project execution challenges make it prudent for investors to remain cautious. Given these mixed factors, FTI stock is best suited for a Zacks Rank #3 (Hold) at this time, with a wait-and-see approach as offshore market conditions evolve. You can see the complete list of today’s Zacks #1 Rank stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Core Laboratories Inc. (CLB): Free Stock Analysis Report TechnipFMC plc (FTI): Free Stock Analysis Report Oceaneering International, Inc. (OII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks