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Tsakos Energy Navigation Limited (NYSE:TNP) Is Expected To Breakeven In The Near Future

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·3 min read
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Tsakos Energy Navigation Limited (NYSE:TNP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Tsakos Energy Navigation Limited provides seaborne crude oil and petroleum product transportation services worldwide. With the latest financial year loss of US$15m and a trailing-twelve-month loss of US$114m, the US$166m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Tsakos Energy Navigation's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Tsakos Energy Navigation

Consensus from 3 of the American Oil and Gas analysts is that Tsakos Energy Navigation is on the verge of breakeven. They expect the company to post a final loss in 2021, before turning a profit of US$126m in 2022. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 193% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Tsakos Energy Navigation given that this is a high-level summary, but, take into account that by and large an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Tsakos Energy Navigation currently has a debt-to-equity ratio of 103%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Tsakos Energy Navigation to cover in one brief article, but the key fundamentals for the company can all be found in one place – Tsakos Energy Navigation's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further examine:

  1. Valuation: What is Tsakos Energy Navigation 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 Tsakos Energy Navigation is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Tsakos Energy Navigation’s board and the CEO’s background.

  3. 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.