Tidewater (NYSE: TDW): Assessing Valuation, Capital Allocation, and Growth Prospects in 2026

June 1, 2026

Tidewater Inc. (“Tidewater”) owns and operates one of the largest fleets of offshore supply vessels in the world, supporting offshore energy exploration, production, and generation. Over the past several years Tidewater’s share price has been on a roller coaster ride, growing 10x to over $100 in two years, falling 60% in the next year, then recovering to above $80. What’s driving this stock and what can we expect for the future? In this article we cover valuation, planned acquisitions, stock buybacks, market influence, liquidity, and price sensitivity.

Background

The oil and gas cyclical recovery has been favorable to Tidewater and its peers. From 2021-2025 vessel day rates have increased by an average of 4% quarter-over-quarter while utilization has fluctuated between 76%-84%. Trailing twelve-month revenue has increased steadily but the industry recovery is losing steam. Management revised revenue guidance downwards several times in 2024. Year 2026 guidance is a tick lower than 2025, excluding planned vessel additions.

Valuation

Lido Advisory’s discounted cash flow analysis values Tidewater at a share price of $78-$86. Key model assumptions includes management’s 2026 forecast of $1.43B-$1.48B in vessel revenue at 49-50% vessel operating margin, which the acquisition of Wilson Sons Ultratug (“Wilson”) at the end of Q2 2026. As of May 31, Tidewater shares closed at $73.49, slightly low of the DCF valuation range but still showing some effects of the planned acquisition later this year. (1)

Wilson Acquisition

Tidewater expects the Wilson acquisition to add $220M annual revenue at 58% vessel operating margin. After accounting for general and administrative expenses, pro forma EBITDA is estimated at $99M annually. With twenty-two vessels in the Wilson fleet, pro forma revenue puts the average effective day rate at $27,400, slightly below market term charter rates for a fleet average of 3,900 dwt in Brazil. Current market rates suggest $30,000 per day, which would increase annual EBITDA by nearly $21M and correspond with a $3 share price improvement. (2,4)

Assuming unadjusted purchase price of $500M, the acquisition EV/EBITDA sits at 5.1x. At year-end 2025, Tidewater’s EV/EBITDA stood at 7.8x. Thus, the Wilson acquisition results in a 2.8x arbitrage or $274M in immediate value creation, more than half the purchase price. (3)

Stock Buybacks

Tidewater repurchased $215M worth of shares from Q4 2023 through Q2 2025. During that period quarterly share price to annualized adjusted EBITDA multiple ranged from 4x-10x, implying that management views an adjusted EBITDA multiple of 10x or less as undervalued. At the May 29 closing price of $73.49, EBITDA multiple sat at 7.3x, implying that management may still view the stock as undervalued.

In Q2 2025, Tidewater announced a $500M share repurchase program as permitted under the July 2025 refinancing arrangement but has not repurchased any shares since in light of the pending Wilson acquisition, which will be funded using cash on hand. By the end of Q1 2026, Tidewater had stockpiled $552M in unrestricted cash. At the time the current share buyback program was announced, management expected to complete the repurchase program in about a year.

Assuming the Wilson transaction closes at a $500M enterprise value and Tidewater assumes the existing debt of $261M, Tidewater will use $239M in cash in the acquisition. Pro forma free cash flow to equity is about $130M per quarter which means Tidewater can fund its buyback program to completion in under a year from cash on hand. Assuming the May 29 closing price of $73.49 and valuation multiples remain unchanged, a $500M share would imply a proportional increase in per-share value to roughly $86, a 16% bump. (12)

Market Influence

Tidewater's returns relative to the PHLX Oil Service Sector (^OSX) index reflect a beta of approximately 1.5. Implying that any effects on the sector would be amplified 1.5x in Tidewater’s share price. During consecutive periods of relatively stable earnings and no planned acquisitions, quarterly returns exhibit strong correlation with quarterly EPS, net of sector and broad market returns.

The ongoing conflict in the Middle East has created unpredictable market volatility. At the inception of the conflict, the price of oil surged towards $120 per barrel and traders poured funds into energy indexes. As traders hedge their way in and out of these sector indexes on geopolitical signals, Tidewater’s stock may be artificially inflated or discounted accordingly.

Liquidity

Tidewater has ample headroom on debt covenants relating to working capital, EBITDA and fleet fair market value (FMV) versus debt as required under its $250M credit revolver. There are no covenants on the $650M Senior Notes that were issued July 2025 and mature July 2030. At current liquidity levels, Tidewater is well positioned to opportunistically deploy capital. (5,6,7,8)

Price Sensitivity

Tidewater has high operating leverage, meaning changes in top line revenue flow through to the bottom line without much change in corresponding operating expenses. In looking at the Q2 2026 forecast, for example, if utilization falls 5%, share price would correspondingly fall by about $14. Additionally, if vessel day rates fall 5%, share price would correspondingly fall by about $11.

So far, the conflict in the Middle East has not had a material impact on Tidewater’s operations. However, the outcome remains uncertain. An extended engagement may hinder routine maintenance and increase other operating expenses. At the same time, backlogged production may build up deferred demand for Tidewater’s services. (11)

Conclusion

Based on current fundamentals, Tidewater appears fairly valued near current trading levels. The company is well capitalized with lower risk of liquidity issues as compared to years past. The primary catalysts for future upside are successful integration of the Wilson acquisition, realization of acquisition synergies, and execution of the company's share repurchase program. Conversely, weakening offshore activity or broader energy-sector volatility could limit near-term appreciation. If Tidewater completes its share repurchase program and realizes upside in vessel rates from the Wilson fleet, Tidewater’s stock could see a $15 improvement from where it sits today, assuming similar valuation multiples and market conditions.

Notes:

1. Key DCF model assumptions include terminal growth using 13% WACC, management's 2026 forward looking guidance, 3% escalation on costs and revenue starting after 2026, interested expense and depreciation and amortization in line with historical. Model start is starting March 31, 2026.

2. Assumes adjusted EBITDA and 49.8M total shares outstanding. Non-GAAP Adjusted EBITDA calculated as operating income plus depreciation and amortization, plus long-lived asset impairment (credit) and other, plus affiliate credit loss impairment expense, and plus loss (gain) on asset dispositions, net.

3. EV/EBITDA reflects adjusted EBITDA as described in Note (2).

4. Pro forma general and administrative expenses is estimated as a percentage of revenue based on Tidewater historical figures.

5. Unadjusted GAAP EBITDA.

6. As of Q1 2026 quarter end, working capital to net interest bearing debt sat at 31.5x, well above the minimum 2.5x.

7. Net interest bearing debt to EBITDA sat at 0.8x, below the maximum allowed 3x.

8. A post-SPO acquisition valuation in August 2022 put the fleet at $1.76B and the Solstad PSV fleet acquired in 2023 was appraised at $620M, totaling $2.38B. Accordingly, the total fleet FMV is estimated at $2.38B, putting the fleet FMV to outstanding debt ratio at 3.6x, above the minimum 2.5x threshold.

9. Tidewater announced the Wilson acquisition on February 22, 2026 and released Q4 2025 and full year 2025 earnings on February 26, 2026.

10. Assuming a price to EBITDA multiple of 8.6x, 49.8M total shares outstanding, pro forma vessel revenue of $330M, and 80%-75% hypothetical utilization reduction.

11. Assuming 49.8M total shares outstanding, $500M in share repurchase at the May 29 closing price of $73.49 equates to 6.7M shares.

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