Earnings event puts Teekay (TK) under the microscope
Teekay (TK) just released full year 2025 results, with sales of US$949.52 million and net income of US$98.11 million, both below the prior year. This has put the stock back in focus for investors.
See our latest analysis for Teekay.
Teekay’s latest earnings release, which showed lower sales and net income than the prior year, comes after a strong run, with a 90 day share price return of 25.41% and a 1 year total shareholder return of 95.51%. This suggests recent momentum remains strong despite short term share price volatility.
If this kind of shipping exposure has caught your attention, it can be helpful to see what else is moving in related areas and beyond through 27 power grid technology and infrastructure stocks
With earnings softer than last year but the share price up sharply over 12 months, the key question now is whether Teekay’s current valuation leaves room for upside or if the market is already pricing in future growth.
Price-to-earnings of 10.2x: Is it justified?
Teekay currently trades on a P/E of 10.2x, while the SWS DCF model estimates a fair value of $29.88 per share versus the last close at $11.50.
The P/E ratio compares the share price to earnings per share and is a quick way to see how much investors are paying for each dollar of profit. For a business focused on crude oil transportation and marine services, earnings can be cyclical, so the multiple often reflects how durable investors think those profits are through shipping and energy cycles.
Teekay’s P/E of 10.2x sits below both its peer group average of 13.3x and the broader US Oil and Gas industry average of 15.7x. That discount suggests the market is pricing its earnings more cautiously than the sector overall, even though the company is trading at a 61.5% discount to the SWS DCF estimate of its future cash flow value of $29.88. See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-earnings of 10.2x (UNDERVALUED)
However, you also have to weigh shipping cycle swings and Teekay’s reliance on energy and utility customers, which can quickly change demand and earnings visibility.
Find out about the key risks to this Teekay narrative.
Another way to look at value
While the P/E of 10.2x makes Teekay look inexpensive next to peers, the SWS DCF model goes further and values the shares at $29.88 based on estimated future cash flows. This is well above the current $11.50 price and represents a wide gap, so how comfortable are you with the assumptions behind it?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Teekay for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 52 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Mixed signals on value and earnings can split opinion. It makes sense to move quickly, review the numbers for yourself, and weigh both sides using 1 key reward and 1 important warning sign
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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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