Teekay (NYSE:TK) has opened FY 2025 with first half revenue of US$463.3 million and basic EPS of US$0.39, alongside trailing 12 month revenue of US$949.5 million and basic EPS of US$1.14 that reflect its recent profitability run. The company has seen revenue move from US$691.2 million and basic EPS of US$0.95 in the first half of 2024 to US$529.2 million and EPS of US$0.51 in the second half of 2024, giving investors a clear view of how the current figures sit against last year’s levels as they weigh a net margin profile that now leans more on underlying operations than one off gains.
See our full analysis for Teekay.With the numbers on the table, the next step is to set these results against the widely followed stories around Teekay’s profitability and risk profile to see which narratives hold up and which ones need a rethink.
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10.3% net margin with a big one off boost
- Over the trailing 12 months, Teekay recorded net income of US$98.1 million on US$949.5 million of revenue, which works out to a 10.3% net margin compared with 11% a year earlier, and that period also included a US$96.2 million one off gain that inflated reported earnings.
- What stands out for a cautious view is that bears can point to the 10.3% margin and the US$96.2 million one off gain as reasons to question how repeatable recent profitability is, even as the company reports positive net income.
- Trailing 12 month net income of US$98.1 million is only slightly above the size of the one off gain, which means a large share of reported profit is tied to that non recurring item.
- By contrast, the latest half year net income excluding extra items is US$33.6 million on US$463.3 million of revenue, which gives you a cleaner view of what the current operations are contributing without the one off effect.
Five year turn to profit with recent softness
- Over the past five years, Teekay moved into profitability with average earnings growth of 58.9% per year, while the latest trailing one year period shows weaker earnings compared with that multi year trend and trailing net profit margins easing from 11% to 10.3%.
- Supporters of a more optimistic take can point to that 58.9% average earnings growth as evidence that the business has undergone a meaningful shift, but the recent trailing year tests how strong that bullish view really is.
- The latest half year net income excluding extra items is US$33.6 million, compared with US$45.3 million in the second half of 2024 and US$88.5 million in the first half of 2024, which shows the current run rate is lower than recent halves even though the company remains profitable.
- Trailing 12 month basic EPS sits at US$1.14, while the half year EPS prints of US$0.95, US$0.51 and US$0.39 across the last three halves show that the recent period is at the lower end of that range, something bulls need to factor into their expectations.
P/E of 9.6x and price far below DCF fair value
- Teekay is trading on a P/E of 9.6x, compared with the US Oil & Gas industry average of 15.4x and a peer average of 15.5x, and the current share price of US$10.99 sits well below the DCF fair value of US$30.41 indicated in the provided estimate, which implies the price has been about 63.9% under that reference point.
- What is interesting for valuation focused investors is that these numbers line up with the view that the market is pricing Teekay more cautiously than peers, even while the company is profitable and has turned its earnings around over the last five years.
- The combination of a 9.6x P/E and trailing 12 month net income of US$98.1 million on US$949.5 million of revenue suggests the market is not giving the same multiple as the broader industry, despite similar profitability metrics such as a 10.3% net margin.
- At the same time, the presence of a US$96.2 million one off gain and an unstable dividend history gives a clear reason why some investors may be treating that DCF fair value of US$30.41 with caution when they compare it to the US$10.99 share price.
Next Steps
Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Teekay's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.
With a mix of supportive and cautious points in this story, it makes sense to look at the full data set yourself and move quickly to form your own take, then weigh up the 1 key reward and 2 important warning signs to see how others are thinking about the balance of risks and rewards.
See What Else Is Out There
Teekay’s reliance on a large one off gain, softer recent EPS and easing net margins highlights that its profitability trend has some clear pressure points.
If that mix of one off support and uneven earnings has you cautious, run a quick comparison against our 68 resilient stocks with low risk scores to focus on companies with more consistent profiles.
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.
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