Teekay (TK) AI Stock Analysis

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Teekay

(NYSE:TK)

74Outperform

Teekay's stock score reflects a well-managed financial performance, with strategic debt reduction and improved profitability margins. The low P/E ratio suggests undervaluation, although revenue volatility and geopolitical uncertainties in the earnings call add some risk. Technical analysis indicates moderate momentum, with a potential for short-term reversal due to high stochastic levels.

Teekay (TK) vs. S&P 500 (SPY)

Market Cap

$591.46M

Dividend YieldN/A

Average Volume (3M)762.36K

Price to Earnings (P/E)5.0

Beta (1Y)0.51

Revenue Growth-16.70%

EPS Growth-8.04%

CountryUS

Employees2,330

SectorEnergy

Sector Strength50

IndustryOil & Gas Midstream

Share Statistics

EPS (TTM)1.43

Shares Outstanding83,539,536

10 Day Avg. Volume680,999

30 Day Avg. Volume762,362

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.46

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 TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Teekay Business Overview & Revenue Model

Company DescriptionTeekay Corporation engages in the international crude oil and other marine transportation services worldwide. The company provides a full suite of ship-to-ship transfer services in the oil, gas, and dry bulk industries; lightering and lightering support; and operational and maintenance marine, as well as offshore production services. As of March 1, 2022, it operated a fleet of approximately 55 vessels. The company primarily serves energy and utility companies, major oil traders, large oil consumers and petroleum product producers, government agencies, and various other entities that depend upon marine transportation. Teekay Corporation was founded in 1973 and is headquartered in Hamilton, Bermuda.

How the Company Makes MoneyTeekay Corporation generates revenue primarily through long-term charter agreements and spot market voyages in the oil and gas shipping sector. The company earns money by leasing its fleet of vessels to major oil and energy companies, who require reliable transportation services for their crude oil and LNG products. Key revenue streams include time-charter contracts, where customers pay a fixed rate for vessel use over a specified period, and spot market contracts, where earnings are based on voyage-specific rates. Additionally, Teekay benefits from strategic partnerships and joint ventures with other maritime and energy companies, enhancing its operational capabilities and expanding its market reach.

Teekay Financial Statement Overview

Summary

Teekay demonstrates strong financial management with improved profitability margins and reduced leverage. The strategic debt reduction significantly enhances financial stability, while strong cost control measures bolster profitability. However, revenue volatility and declining cash flows present potential challenges.

Income Statement

Positive

Teekay's income statement reflects a volatile revenue trajectory with a noticeable decline from 2023 to 2024, where revenue fell from $1.46 billion to $1.22 billion. Despite the revenue drop, the company maintains a strong gross profit margin of 32.3% in 2024, up from 29.5% in 2023, signaling improved cost efficiency. However, net profit margin decreased slightly to 10.96% in 2024 from 10.28% in 2023, indicating challenges in managing operating expenses. The company shows resilience with positive EBIT and EBITDA margins, but revenue volatility poses a risk.

Balance Sheet

Positive

The balance sheet shows a healthy reduction in total debt from $227 million in 2023 to $65.6 million in 2024, significantly lowering the debt-to-equity ratio to 0.09, enhancing financial stability. The equity ratio remains robust at 32.9% in 2024, indicating a stable capital structure. However, the decrease in stockholders' equity from $732 million in 2023 to $710 million in 2024 suggests potential challenges in generating returns, as reflected in the reduced ROE of 18.84% in 2024 from 20.57% in 2023.

Cash Flow

Positive

Teekay's cash flow statement shows a strong free cash flow generation of $391.8 million in 2024, despite a reduction from $623 million in 2023. The operating cash flow remains robust at $467 million in 2024, albeit down from $633 million in 2023. The company's ability to convert net income into cash is sound, with an operating cash flow to net income ratio of 3.49 in 2024. The free cash flow to net income ratio also indicates strong cash generation capabilities. Despite these strengths, declining cash flows year-over-year could impact future liquidity.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.22B	1.46B	1.19B	682.51M	1.82B
	Gross Profit
393.86M	580.63M	293.03M	-49.73M	559.82M
	EBIT
365.25M	531.73M	245.77M	-185.35M	593.15M
	EBITDA
503.15M	655.14M	348.67M	-107.93M	201.71M
	Net Income Common Stockholders
133.77M	150.64M	209.64M	-277.46M	90.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
717.77M	652.68M	519.86M	108.98M	348.79M
	Total Assets
2.15B	2.20B	2.16B	6.53B	6.95B
	Total Debt
65.55M	227.20M	597.39M	1.01B	3.82B
	Net Debt
-619.78M	-252.88M	287.53M	896.24M	3.47B
	Total Liabilities
217.95M	396.29M	795.24M	4.10B	4.47B
	Stockholders Equity
709.76M	732.28M	623.46M	515.05M	481.41M
Cash Flow		Free Cash Flow
391.84M	623.26M	183.72M	54.54M	957.51M
	Operating Cash Flow
467.19M	633.46M	199.15M	75.99M	984.02M
	Investing Cash Flow
157.50M	54.66M	308.98M	7.17M	63.06M
	Financing Cash Flow
-416.45M	-524.05M	-456.95M	-223.53M	-1.10B

Teekay Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.08

Price Trends

50DMA

6.57

Positive

100DMA

6.72

Positive

200DMA

6.96

Positive

Market Momentum

MACD

0.06

Negative

RSI

61.69

Neutral

STOCH

97.24

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TK, the sentiment is Positive. The current price of 7.08 is above the 20-day moving average (MA) of 6.44, above the 50-day MA of 6.57, and above the 200-day MA of 6.96, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 61.69 is Neutral, neither overbought nor oversold. The STOCH value of 97.24 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TK.

Teekay Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TNK	81 Outperform	$1.45B	3.50	23.93%	2.45%	-16.70%	-24.06%
TK	74 Outperform	$591.46M	4.96	18.55%	―	-16.70%	-8.04%
TEN	73 Outperform	$508.55M	3.26	10.53%	9.15%	-9.61%	-43.91%
FLNG	72 Outperform	$1.25B	10.91	14.23%	12.75%	-3.95%	-2.25%
NVGS	70 Outperform	$889.32M	10.45	7.14%	1.61%	2.89%	8.17%
DLNG	67 Neutral	$126.05M	3.30	10.37%	2.85%	-2.54%	34.80%
Sector *	55 Neutral	$7.11B	3.51	-6.23%	6.00%	>-0.01%	-51.70%

* Energy Sector Average

Performance Comparison

Teekay

7.08

0.52

7.93%

TNK

Teekay Tankers

42.31

-13.51

-24.20%

TEN

Tsakos Energy Navigation

16.88

-7.03

-29.40%

NVGS

Navigator Holdings

12.84

-2.21

-14.68%

DLNG

Dynagas LNG Partners

3.44

-0.31

-8.27%

FLNG

FLEX LNG

23.53

0.04

0.17%

Teekay Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: 1.72% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a mixed sentiment with strong financial performance and strategic fleet management highlighted, while facing challenges such as softer spot rates and geopolitical uncertainties. Despite these challenges, the company remains optimistic about its strategic investments and dividend declarations.

Highlights

Strong Financial Performance

Teekay Tankers reported adjusted net income of $52 million for the fourth quarter and $355 million for the full year 2024. The company generated $69 million in free cash flow in the fourth quarter and $415 million for the year.

Fleet Management Success

Teekay Tankers sold five vessels for a total of $160 million, resulting in expected book gains of nearly $60 million. They've also signed an MOA to acquire a Martin LR2 tanker, expected to close in the second quarter.

Strategic Investments

Teekay made a passive investment in Ardmore Shipping Corporation, owning 5.1% of the company, suggesting confidence in the product sector.

Dividend Declaration

Teekay Tankers declared a quarterly fixed dividend of $0.25 per share, with a total of $3 per share paid for the full year.

Lowlights

Softer Spot Rates

Spot rates booked to date are slightly below fourth quarter levels, although they remain above the fleet's free cash flow breakeven levels.

Geopolitical Uncertainty

Potential impacts from geopolitical events, such as conflicts in Ukraine and the Middle East, and changes in sanctions, create uncertainty in the market.

Impact of Sanctions

The imposition of additional US sanctions on 153 tankers servicing the Russian oil trade has increased rate volatility.

Pressure on Spot Rates

Despite some positive trends, the Aframax and Suezmax spot rates experienced pressure near the term, influenced by market overhang and geopolitical events.

Company Guidance

During the Teekay Group's Fourth Quarter 2024 Earnings Conference Call, several key metrics and strategic moves were highlighted. Teekay Tankers reported an adjusted net income of $52 million, or $1.50 per share for Q4, and $355 million, or $10.31 per share for the entire year. The company generated $69 million in free cash flow in Q4 and $415 million annually. As part of its fleet management strategy, Teekay Tankers sold five vessels for $160 million, expecting book gains of nearly $60 million, and announced the acquisition of a Martin LR2 tanker, expected to close in Q2. Additionally, Teekay Tankers declared a quarterly fixed dividend of $0.25 per share, totaling $3 per share over the year. Despite softer spot rates, the company's free cash flow breakeven rate is approximately $14,300 per day, allowing it to remain profitable. The company also made a passive investment in Ardmore Shipping Corporation, acquiring a 5.1% stake. Looking ahead, Teekay anticipates potential market volatility due to geopolitical factors, including US sanctions on Russian, Iranian, and Venezuelan oil exports, as well as potential peace agreements in conflict regions, which could impact tanker demand and trade patterns.

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.