Thoughts from the Money Board on Tidewater stock?

Some Background: Former New Orleans-based offshore support vessel owner and operator that relocated to Houston in 2018. Filed for Chapter 11 in 2017 largely due to a significant debt load and the prolonged downturn in the offshore space from 2014 - 2016. Since then, emerged from Chapter 11 with a substantially deleveraged Balance Sheet and, with some recovery in the offshore space, have been performing well and generating significant cash flow.

Some quick observations:

Pros:
Largest offshore support vessel operator in the world
Revenue up 3.6x since 2021
Highly profitable with ~50% gross margin and very strong EBITDA margins
Strong FCF generation, ~$382M TTM
Strong Balance Sheet with $428M in cash and $650M in long-term debt due 2030
Untapped $250M revolving credit facility
Share repurchase program authorization of $500 million
Optionality to return cash to shareholders or explore M&A opportunities (speculation online around Harvey Gulf & Hornbeck Offshore, among others)

Cons:
Revenue ~flat from 2024 to 2025
Performance tends to be correlated with price of oil
Stock can be volatile (~1.44 beta)

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Posted by dkreller

Laffy

Member since Jan 2009

33463 posts

Posted on 12/23/25 at 1:12 am to VMO7

I imagine revenue will continue to be flat or worse with what oil is priced at now. Offshore isn’t super busy but I don’t know anything about capex allocation for 2026.

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Posted by LSUnation78

Northshore

Member since Aug 2012

14078 posts

Posted on 12/23/25 at 7:44 am to VMO7

I did a deep dive on them years back.

You gotta watch their contracts. Their services are by contract, typically 1-year renewals/repricings. The rates on the service contract are what is tied to oil prices.

So the performance you see now might be on contracts when oil proces were higher, but those will all get repriced as oil prices fall. Not necessarily all at once, but they will.

Then you have to understand that cash and low debt looks good, but how much cash and debt would they need to take on just to add one boat to the fleet? Exactly why they already had a chapter 11 and why I didn’t invest in them about 6 years before they actually hit chapter 11.

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Posted by VMO7

Member since Mar 2018

45 posts

Posted on 12/25/25 at 7:47 pm to LSUnation78

Agreed on the significance of contract duration.

Regarding adding boats to the fleet - they added 50 vessels in 2022 via the acquisition of Swire Pacific Offshore which was well received by the market (stock jumped 10% when it was announced).

More broadly, the market has changed dramatically from 6 years ago. For example, shipyard capacities are way down over last decade as there has been a prolonged period of excess supply of offshore equipment, coupled with declining demand for offshore oil, with shale supply meeting increased oil demand.

As offshore becomes more important into the future, Tidewater is one of the best positioned with a strong existing fleet (and balance sheet) that provides some margin of safety given limited shipyard capacity.

Curious to hear your perspective if you were to do another deep dive on them now.

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