Tidewater Inc. (NYSE:TDW) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Tidewater Inc., together with its subsidiaries, provides offshore marine support and transportation services to the offshore energy industry through the operation of a fleet of marine service vessels worldwide. The US$1.1b market-cap company posted a loss in its most recent financial year of US$129m and a latest trailing-twelve-month loss of US$102m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Tidewater will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Tidewater is bordering on breakeven, according to the 2 American Energy Services analysts. They expect the company to post a final loss in 2022, before turning a profit of US$113m in 2023. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 101%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Tidewater given that this is a high-level summary, however, keep in mind that by and large energy companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 20% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of Tidewater to cover in one brief article, but the key fundamentals for the company can all be found in one place – Tidewater's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:
Valuation: What is Tidewater worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Tidewater is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Tidewater’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here