Golar LNG (GLNG) AI Stock Analysis

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Golar LNG

(NASDAQ:GLNG)

62Neutral

Golar LNG's overall score reflects a mixed financial performance with positive income recovery but challenges in revenue growth and cash flow. Despite the company's strategic transition to a pure FLNG entity and a strong earnings call highlighting significant backlog and cash position, the high P/E ratio and valuation concerns weigh on the score. Technical analysis suggests some positive momentum, but potential resistance and overvaluation limit upside potential.

Positive Factors

Acquisition

Golar announced the acquisition of the remaining ~8% of ownership in the Hilli from Seatrium and Black and Veatch for a consideration of $90.2 million, which is seen as a solid deal for Golar.

Financial Performance

The acquisition is expected to simplify the balance sheet and enhance cash flows for Golar.

Growth Prospects

There is clear momentum in getting more Golar FLNG units on the water, indicating strong growth prospects for the company.

Negative Factors

Utilization

The Hilli is currently only 55% utilized, resulting in lower cash flows until its deployment in Argentina in 2027.

Golar LNG (GLNG) vs. S&P 500 (SPY)

Market Cap

$3.99B

Dividend Yield2.62%

Average Volume (3M)2.28M

Price to Earnings (P/E)78.2

Beta (1Y)1.33

Revenue Growth-12.75%

EPS GrowthN/A

CountryUS

Employees474

SectorEnergy

Sector Strength53

IndustryOil & Gas Midstream

Share Statistics

EPS (TTM)0.48

Shares Outstanding104,622,475

10 Day Avg. Volume2,474,344

30 Day Avg. Volume2,282,052

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)49.23

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$47.00

Price Target Upside23.26% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Golar LNG Business Overview & Revenue Model

Company DescriptionGolar LNG (GLNG) is a leading independent owner and operator of liquefied natural gas (LNG) infrastructure. The company is engaged in the transportation, regasification, liquefaction, and trading of LNG. Golar LNG operates a fleet of LNG carriers and floating storage and regasification units (FSRUs), offering solutions for the shipping and storage of natural gas. The company plays a crucial role in the global LNG supply chain, facilitating the energy transition through its services.

How the Company Makes MoneyGolar LNG generates revenue primarily through the leasing and operation of its LNG carriers and FSRUs. The company enters into long-term charter agreements with major energy companies, securing stable income from the leasing of its vessels. These contracts often include fixed and variable rate components, depending on the length and terms of the charter. Additionally, Golar LNG participates in LNG trading, capturing margins on the sale and purchase of LNG cargoes. The company also earns income through partnerships and joint ventures that develop and operate LNG infrastructure projects, such as floating liquefaction facilities, further diversifying its revenue streams.

Golar LNG Financial Statement Overview

Summary

Golar LNG's financial performance indicates a company in transition, with signs of recovery in profitability and a stable balance sheet but facing challenges with cash flow management and revenue growth. Improvements in net income and equity stability are promising, but the company must address declining revenues and negative free cash flow to enhance its financial health and investor confidence.

Income Statement

Positive

Golar LNG shows a mixed performance in its income statement metrics. While there is a notable recovery in net income from a loss in 2023 to a positive figure in 2024, revenue has declined from the previous year by 12.75%. The gross profit margin for 2024 is approximately 48.57%, indicating good cost management, but declining EBIT and EBITDA margins highlight challenges in operational efficiency. The company needs to focus on stabilizing and growing revenue to improve profitability metrics.

Balance Sheet

Positive

The balance sheet of Golar LNG reflects moderate financial stability. The debt-to-equity ratio has shown some improvement, indicating a decrease in leverage, with the current ratio at about 0.72. Return on Equity (ROE) has improved to approximately 2.47% in 2024, recovering from a negative ROE in 2023. The equity ratio stands at 46.25%, suggesting a balanced capital structure. However, the company should continue to focus on reducing its debt to strengthen its balance sheet further.

Cash Flow

Neutral

Cash flow performance is a concern for Golar LNG, with negative free cash flow in 2024 albeit an improvement from the previous year. Operating cash flow to net income ratio is strong, indicating good cash generation relative to net income, but the free cash flow to net income ratio is negative. The company should prioritize improving operational cash flow and reducing capital expenditures to achieve positive free cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
260.37M	298.43M	267.74M	451.76M	438.64M
	Gross Profit
126.45M	154.80M	140.78M	214.71M	209.15M
	EBIT
62.18M	15.80M	91.64M	181.93M	173.92M
	EBITDA
138.64M	53.21M	1.08B	29.54M	193.07M
	Net Income Common Stockholders
49.69M	-46.79M	787.77M	-9.68M	8.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
566.38M	684.38M	1.13B	268.63M	127.69M
	Total Assets
4.35B	4.08B	4.28B	4.95B	4.34B
	Total Debt
1.45B	1.22B	1.19B	2.41B	2.38B
	Net Debt
884.73M	544.85M	314.07M	2.14B	2.25B
	Total Liabilities
1.80B	1.48B	1.38B	2.77B	2.71B
	Stockholders Equity
2.01B	2.07B	2.50B	1.73B	1.29B
Cash Flow		Free Cash Flow
-119.16M	-189.96M	31.46M	15.60M	-156.40M
	Operating Cash Flow
318.24M	135.25M	298.88M	230.00M	145.78M
	Investing Cash Flow
-415.84M	-131.71M	1.07B	-74.35M	-103.03M
	Financing Cash Flow
42.71M	-244.95M	-691.64M	-51.61M	-137.11M

Golar LNG Technical Analysis

Technical Analysis Sentiment

Positive

Last Price38.13

Price Trends

50DMA

36.97

Positive

100DMA

39.01

Negative

200DMA

36.63

Positive

Market Momentum

MACD

-0.05

Negative

RSI

55.62

Neutral

STOCH

89.97

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GLNG, the sentiment is Positive. The current price of 38.13 is above the 20-day moving average (MA) of 36.58, above the 50-day MA of 36.97, and above the 200-day MA of 36.63, indicating a bullish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 55.62 is Neutral, neither overbought nor oversold. The STOCH value of 89.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GLNG.

Golar LNG Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FRO	76 Outperform	$3.44B	6.94	21.46%	11.53%	13.77%	-24.50%
DHT	76 Outperform	$1.67B	9.27	17.56%	9.12%	2.11%	13.10%
STNG	75 Outperform	$1.76B	2.56	24.68%	4.53%	-7.25%	31.85%
FLNG	72 Outperform	$1.24B	10.69	14.23%	12.89%	-3.95%	-2.25%
INSW	68 Neutral	$1.64B	3.97	23.33%	15.45%	-11.21%	-25.50%
GLNG	62 Neutral	$3.99B	78.15	2.43%	2.62%	-12.75%	―
Sector *	55 Neutral	$7.08B	3.69	-5.71%	6.15%	-1.38%	-53.90%

* Energy Sector Average

Performance Comparison

GLNG

Golar LNG

38.13

13.63

55.63%

DHT

DHT Holdings

10.42

0.15

1.46%

FRO

Frontline

15.44

-5.52

-26.34%

STNG

Scorpio Tankers

35.33

-32.57

-47.97%

INSW

International Seaways

33.34

-14.38

-30.13%

FLNG

FLEX LNG

23.28

0.30

1.31%

Golar LNG Earnings Call Summary

Earnings Call Date: Feb 27, 2025 | % Change Since: -0.03% | Next Earnings Date: Jun 3, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Golar LNG's successful transition to a pure FLNG company, with a strong financial position, significant backlog, and progress on key projects like the FLNG Gimi and Mark II. However, challenges remain in securing conversion candidates and addressing infrastructure needs in Argentina for future projects.

Highlights

Transition to Pure FLNG Company

Golar LNG finalized its transition into a pure FLNG company through the sale of Avenir LNG and Golar Arctic, marking the end of a 50-year presence in the LNG shipping market.

Significant EBITDA Backlog

Golar's EBITDA backlog stands at $11 billion before commodity exposure, providing strong earnings visibility, especially with the anticipated long-term charter for the MKII FLNG.

Strong Financial Performance

Adjusted EBITDA for full-year 2024 was $241 million, with a cash position of $700 million. A dividend of $0.25 per share was declared for the quarter.

Hilli's Operational Excellence

Hilli delivered 128 cargoes since start-up in 2018, generating $277 million of EBITDA during 2024, with an increase expected from the recent acquisitions.

Gimi's Commissioning and Upcoming Operations

FLNG Gimi is expected to start full commercial operations in Q2, unlocking approximately $3 billion of EBITDA backlog.

Mark II FLNG Construction Progress

The Mark II FLNG is progressing according to schedule, with an expected delivery in 2027.

Increased Interest in Argentine Project

Three major gas producers joined the Argentine project, strengthening its economic foundation and increasing the potential for further FLNG deployments.

Lowlights

Challenges in Acquiring Conversion Candidates

While conversion candidates for FLNG units have been identified, the price dynamics in the LNG carrier market are under pressure, presenting challenges in acquisition.

Infrastructure Needs in Argentina

For further FLNG deployments in Argentina, a designated gas pipeline from Vaca Muerta is necessary, which requires coordination and investment from gas producers.

Company Guidance

During the 4Q 2024 earnings call for Golar LNG Limited, CEO Karl Fredrik Staubo and CFO Eduardo Maranhão provided detailed guidance on the company's financial and operational metrics. Golar LNG reported an adjusted EBITDA of $241 million for the full year 2024, with a cash position of approximately $700 million. They declared a dividend of $0.25 for the quarter. The company has an EBITDA backlog of $11 billion, excluding commodity exposure, bolstered by its transition to a pure FLNG company and the sale of non-core assets, including Avenir LNG and Golar Arctic. The FLNG Hilli and Gimi are under long-term contracts, contributing significantly to the backlog, with the Gimi expected to generate approximately $3 billion in EBITDA over its 20-year lease. The company also discussed the strategic acquisition of an 8% stake in the FLNG Hilli, which is expected to yield additional cash flow and increase earnings visibility. Future plans include securing a charter for the MKII FLNG and potentially ordering a fourth FLNG unit, with the company exploring opportunities for further FLNG deployments in Argentina and other markets.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.