TIDEWATER INC (TDW): what the price assumes

In the published model solve dated 2026-Q2, anchored at $77.42, TIDEWATER INC (TDW) is priced for +18.4% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/TDW

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 5: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 10.5% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.5pp.

Reconcile: at the x-ray's 9.3% required return this reads ~10.7%/yr; the models below use their own rates.

How unusual the bet is: within-range

Valuation X-Ray

The price is supported by asset-based and relative-multiple value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.5%); the inversion above states its own rate.

Per-Model Detail (n=10)

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Tidewater owns the largest fleet of offshore supply vessels serving oil and gas platforms, a business where day rates swing hard with the offshore drilling cycle: Norwegian AHTS spot rates hit records above $350,000 per day in Q1 2026 on tight supply.
• The biggest risk is that current pricing reflects a cyclical high; Q1 2026 net income fell to $6.1 million from $42.7 million a year earlier as dry-dock days, crew wages, and insurance costs rose.
• Watch the $500 million Wilson Sons Ultratug acquisition (22 Brazilian platform supply vessels, closing targeted by end of Q2 2026) and whether the OSV market tightens into 2027-2028 as management expects.

Bull Case

Valuing an offshore-supply-vessel operator is really about reading a supply cycle, and this one is tightening for structural reasons that favor the incumbent. The fleet of vessels that service offshore rigs was built years ago; almost no new ones have been ordered because a new vessel costs tens of millions and takes years to deliver, so when offshore drilling demand recovers, the supply cannot respond quickly. That is why Norwegian anchor-handler spot rates set records above $350,000 per day in Q1 2026 on continued supply constraints, and why management believes the imbalance supports day-rate increases of $3,000 to $4,000 per vessel per day annually, with the market tightening significantly into late 2026 through 2028. In this industry, scarcity is the moat.

Tidewater is positioned to harvest that scarcity. It runs the largest OSV fleet, and the FY2025 10-K notes that "fleet, economies of scale and experience level in many areas of the world are competitive advantages in our industry", reinforced in the Americas by Jones Act protections under the Merchant Marine Act of 1920 that limit foreign-flagged competition. Scale lets the company move vessels toward the tightest regional markets, which is exactly what it did as Europe/Mediterranean and APAC led the sequential day-rate gains. The balance sheet supports patience through the cycle: debt-to-equity of 0.48, a current ratio of 3.33, and an Altman score of 6.8 deep in safe territory.

Management is deploying capital while the cycle is still building. Tidewater announced a $500 million cash acquisition of Wilson Sons Ultratug Offshore, adding 22 platform supply vessels in Brazil, with closing targeted by the end of Q2 2026, expanding into one of the highest-growth offshore basins. The company already has $1.1 billion of 2026 revenue contracted against guidance of $1.43 billion to $1.48 billion, and it returns cash through a growing dividend and $50.8 million of trailing buybacks. Free cash flow converts at 96% of net income. The bull case is a scale leader in a supply-starved market buying more capacity ahead of a multi-year tightening it can already see in the day-rate data.

Bear Case

The valuation methods disagree on Tidewater, and for a cyclical the disagreement is a warning, not a bargain. The relative-multiple lens reads the stock as cheap, trading at about 60% of where comparable multiples would place it, while the asset-based and earnings-power lenses land slightly above the price. The catch is that both the cheap-looking multiple and the earnings-power read rest on current earnings, and current earnings sit near what may be a cyclical high. An OSV operator capitalized on peak-cycle day rates always looks inexpensive right before the cycle turns; the conservative asset-based read, which values the vessels rather than the earnings they are throwing off today, is usually the more honest one at this point in a cycle.

The recent trajectory already shows the earnings quality softening. Operating margin compressed from 23.7% to about 18% over the last four quarters, and Q1 2026 net income fell to $6.1 million from $42.7 million a year earlier as higher dry-dock days, crew wages, insurance, and operating costs weighed on results. Revenue was down 2.2% year over year. The quarterly net income is also distorted by below-the-line items (the December 2025 quarter printed a 65% net margin on a one-time basis), so any single quarter overstates or understates the true run rate. A business whose reported profitability is this volatile is exactly the kind the earnings-power method mis-prices.

The demand side is entirely outside the company's control. The FY2025 10-K is candid that "higher commodity prices will not necessarily translate into increased demand for offshore support services or sustained higher pricing", and lists the forces that swing offshore activity, including climate-driven pressure on the oil and gas sector and "U.S. trade policies that include substantial tariffs". It also warns that changes allowing foreign-built or foreign-controlled vessels into U.S. coastwise trade "could also result in excess vessel capacity and increased competition". The market is paying about 15x company-wide operating income and assuming roughly 14.5% growth sustained for years, a pace only about 45% of comparable fast-growers held for even five, in a business where the last decade taught investors how brutal the downside of the offshore cycle can be.

Valuation

Tidewater is a cyclical, and the right way to read its valuation is to separate the methods that lean on today's earnings from the one that values the assets. At $73.29 (July 11, 2026), the relative-multiple lens reads the stock as cheap, around 60% of where comparable multiples land, while the asset-based and earnings-power lenses sit slightly above the price at roughly 1.2x and 1.3x. For most companies that spread would say undervalued; for an OSV operator it says the earnings-based methods and the asset-based method are pricing different points in the cycle, and the reader should weight the asset value more heavily because vessel earnings are the volatile input here.

Inverting the price frames the bet in cyclical terms. The market is paying about 15x company-wide operating income and implicitly assuming roughly 14.5% annual operating growth for five years. The margin requirement is undemanding, the business only has to hold a small fraction of the roughly 20% operating margin it earns today, so the bet is not on margin expansion but on the day-rate cycle staying elevated long enough. That is the crux: management sees the OSV supply-demand imbalance driving day rates up $3,000 to $4,000 per vessel annually into 2028, and the price is essentially underwriting that view. The FY2025 10-K's own hedge, that higher commodity prices "will not necessarily translate into increased demand for offshore support services or sustained higher pricing", is the counterweight the price does not fully credit.

Solvency is not the concern, which is why this is a cycle bet rather than a survival bet. Leverage is moderate and well covered, debt-to-equity is 0.48, the current ratio is 3.33, and free cash flow converts at 96% of net income, so the company can fund the $500 million Wilson Sons acquisition and ride a downturn if one comes. The valuation therefore reduces to a single cyclical question: are today's day rates closer to a durable new level, as management argues from the tight vessel supply, or closer to a peak the earnings-based methods are naively extrapolating? The asset-based read counsels caution; the day-rate data and the contracted backlog argue the tightening has further to run.

Catalysts

Q1 2026 was a margin-pressure quarter inside a rising cycle. Revenue of $326.2 million reflected higher utilization and day rates, but net income fell to $6.1 million from $42.7 million a year earlier as higher dry-dock days, crew wages, insurance, and operating costs weighed on the bottom line. Global average day rates rose 1% sequentially, led by Europe/Mediterranean and APAC, and record-high spot rates for large anchor-handlers in Norway exceeded $350,000 per day on supply constraints.

The forward setup is about the supply-demand tightening and one large acquisition. Management reaffirmed 2026 revenue guidance of $1.43 billion to $1.48 billion with a 49% to 51% gross margin target, and $1.1 billion of the year is already contracted. It expects the OSV market to tighten significantly in late 2026 through 2028, supporting annual day-rate increases of $3,000 to $4,000 per vessel. The near-term catalyst is the $500 million cash acquisition of Wilson Sons Ultratug Offshore, adding 22 platform supply vessels in Brazil, with closing targeted by the end of Q2 2026. The items to watch are whether day rates keep climbing across regions, how quickly the higher operating costs that pressured Q1 margins normalize, the close and integration of the Brazil acquisition, and any shift in offshore drilling demand that would validate or undercut the multi-year tightening thesis. The next quarterly report is the immediate checkpoint.

Peer Cohorts (Per Segment, With Filing Citations)

Europe/Mediterranean (reported)

• KEX (KIRBY CORPORATION)
• FY2025 10-K: …and in-field repair capabilities and related parts sales. The Company's emphasis is on service to its customers, and it sends its crews from any of its locations to service customers' equipment anywhere in the world. The medium-speed operations are located in Houma, Louisiana, Chesapeake, Virginia, Paducah, Kentucky,…
• FY2025 10-K: …notional value of these instruments is $ 30.2 million at December 31, 2025, including $ 11.3 million in letters of credit and $ 18.9 million in performance bonds. All of these instruments have an expiration date within two years . The Company does not believe demand for payment under these instruments is likely and…
• SFL (SFL Corporation Ltd.)
• FY2025 20-F: …emissions from international shipping by at least 70%, striving for 80%, by 2040, compared to 2008 levels. As part of the 2023 IMO Strategy, MPEC also created the IMO Net-zero Framework, which will combine mandatory emissions limits and greenhouse gas pricing across the industry. The IMO Net-zero Framework was…
• FY2025 20-F: …public-interest organizations or activism with regard to failure to adapt or mitigate climate impact; ▪ increased cost of capital or limiting access to funding due to EU Taxonomy or relevant territorial taxonomy regulations; ▪ the arresting or attachment of one or more of the Company's vessels or rigs by maritime…
• TNK (TEEKAY TANKERS LTD.)
• (no filing in the citation store)
• FRO (Frontline plc)
• FY2025 20-F: …parallel to those in Annex VI relating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1% maximum sulfur requirement for fuel used by ships at berth in the Baltic, the North Sea and the English Channel (the so called "SOx-Emission Control Area"). As of January 2020, EU member states must also…
• FY2025 20-F: …the manager or the bareboat charterer, that has assumed the responsibility for the operation of the ship from the shipowner. Furthermore, starting January 1, 2026, the EU ETS regulations will expand to include emissions of two additional greenhouse gases: nitrous oxide and methane. In the year ended December 31,…
• INSW (International Seaways, Inc.)
• FY2025 10-K: -mile demand for the seaborne transportation of both crude oil and refined petroleum products, which has resulted in a prolonged spike in freight rates. Self-sanctioning by Western oil majors and many shipowners resulted in disrupted product flows, primarily diesel, from Russia to Europe, while high arbitrage spreads…
• FY2025 10-K: …North Sea area, the North American area (covering designated coastal areas off the United States and Canada) and the United States Caribbean Sea area (around Puerto Rico and the United States Virgin Islands). More recently, ECAs were adopted for the Mediterranean Sea in 2024 and the Canadian Arctic and Norwegian Sea…
• DAC (DANAOS CORPORATION)
• FY2025 20-F: …applied to cargo and passenger ships of 5,000GT and above since January 1, 2024, and applies to 100% of carbon emissions from voyages between EU ports and 50% of carbon emissions from voyages between an EU port and a non-EU port. The EU ETS is a ‘cap and trade' system, where participants purchase allowances via an…
• FY2025 20-F: …European Monitoring, Reporting and Verification Regulation (the "EU MRV") regulation entered into force on July 1, 2015, and require ship owners and operators to annually monitor, report and verify carbon dioxide emissions for vessels larger than 5,000 gross tonnage calling at any EU, Norway and Iceland port. Data…
• GSL (Global Ship Lease, Inc.)
• FY2025 20-F: …of draft proposals as part of its ‘Fit for 55' environmental legislative agenda and as part of the wider EU Green Deal growth strategy. There are two key initiatives relevant to maritime arising from these proposals: (a) the EU ETS, a bespoke emissions trading scheme for the maritime sector which commenced in 2024…
• FY2025 20-F: Sea, including the English Channel, the North American area, and the U.S. Caribbean Sea area. At the MEPC78, the IMO approved a proposal for a new ECA for the Mediterranean. These amendments, designating the Mediterranean Sea, as a whole, as an ECA for sulfur oxides and particular matter entered into force on May 1,…
• CMRE (COSTAMARE INC.)
• FY2025 20-F: …Currency Exchange Agreements: We generate all of our revenue in U.S. dollars, but a substantial portion of our vessel operating expenses, primarily crew wages, are in currencies other than U.S. dollars (mainly in Euro), and any gain or loss we incur as a result of the U.S. dollar fluctuating in value against those…
• FY2025 20-F: …December 31, 2023, we were engaged in 24 Euro/U.S. dollar contracts totaling $78.6 million at an average forward rate of Euro/U.S. dollar 1.0730, expiring in monthly intervals up to December 2025. We recognize these financial instruments on our balance sheet at their fair value. These foreign currency forward…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.