Tidewater (TDW): Assessing Valuation After Mixed Results and Fresh Revenue Guidance

Tidewater (NYSE:TDW) caught investors' attention this week after reporting its third quarter results. The company posted a slight net loss; however, revenue exceeded forecasts, reflecting stronger day rates and better vessel utilization.

See our latest analysis for Tidewater.

Tidewater’s latest results sparked notable volatility, with the share price surging more than 10% over the past month but retreating after earnings on shifting sentiment. While momentum has faded recently, the long-term numbers are eye-catching. The company’s three-year total shareholder return stands at a robust 73%, and five-year holders have seen gains of almost 400%.

If you’re drawn to companies with rapid rebounds and strong management signals, it may be time to broaden your view. Discover fast growing stocks with high insider ownership.

With the share price still trading nearly 20% below analyst targets, but after a steep rally and mixed signals in the latest results, investors must consider whether there is genuine value left to unlock or if future growth is already factored in.

Most Popular Narrative: 12.7% Undervalued

The main narrative describes Tidewater as trading at a substantial discount to its fair value, with the last close price well below the projected target. This creates an opportunity to examine the strategic and industry factors expected to drive potential returns.

Tight vessel supply due to minimal newbuild activity and expected attrition of older vessels is likely to constrain global OSV fleet growth through at least 2027. This may position Tidewater for higher utilization and improved day rates as offshore E&P and construction projects ramp up, serving as a potential catalyst for sustained revenue growth and margin expansion.

Read the complete narrative.

Curious what numbers could justify such a discount? Discover how assumptions about offshore demand, rising margins, and future earnings are fueling this intriguing valuation call. One bold profit forecast may leave skeptics guessing. Only the full narrative breaks down these key drivers.

Result: Fair Value of $60 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent softness in offshore demand or tighter capital market conditions could put pressure on Tidewater's earnings outlook and challenge the current valuation narrative.

Find out about the key risks to this Tidewater narrative.

Another View: Where Do the Multiples Point?

Shifting from fair value estimates to a multiples perspective, Tidewater appears pricey compared to the industry average. Its price-to-earnings ratio is 17.1 times, higher than both the US Energy Services industry at 16.5 times and the fair ratio of 16.1 times. This suggests investors have increased the share price beyond typical sector valuations, raising the stakes if future growth stalls. While some peers trade at much higher levels, it is uncertain whether this premium will persist if momentum fades.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Tidewater Narrative

Everyone brings a unique perspective to the table. Digging into the data yourself could reveal a different story. Take a few minutes to craft your view and Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Tidewater.

Ready for More Winning Investment Ideas?

Make your next market move count by focusing on opportunities shaping tomorrow’s leaders. Don’t hesitate; some of the most promising companies could pass you by.

• Capitalize on innovative healthcare breakthroughs by screening these 30 healthcare AI stocks poised to reshape patient outcomes and care delivery.
• Secure your passive income potential by searching for steady yields in these 16 dividend stocks with yields > 3% offering robust payouts over 3%.
• Uncover the digital frontier and invest in growth with these 81 cryptocurrency and blockchain stocks transforming finance and technology sectors worldwide.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com