How Should Investors Play TEN Stock Post Q2 Earnings Beat?

On Sept. 10, Athens, Greece-based Tsakos Energy Navigation Limited TEN released impressive second-quarter 2025 results as both earnings and revenues surpassed the Zacks Consensus Estimate. 

The question that naturally arises after the better-than-expected results is whether investors should rush and buy the stock of the shipping company now. Let us delve deeper to answer the question.

Highlights of TEN’s Q2 & 1H25 Performance

Tsakos Energy’s second-quarter 2025 earnings per share of 67 cents outpaced the Zacks Consensus Estimate by 8 cents but decreased 46.8% year over year. Total revenues of $161.4 million outpaced the Zacks Consensus Estimate of $156.9 million. However, the top line decreased 24.6% year over year due to a decline in spot contracts.

Vessel operating expenses increased 6% year over year in the June quarter, thus hurting the bottom line and contributing to the year-over-year contraction. The increase in expenses was primarily due to larger average vessel size in the fleet, shuttle tanker vessel upgrades and inflationary woes. Average time charter equivalent per vessel per day, despite the market fluctuations, in the second quarter of 2025 came in at an impressive $30,767.

The earnings beat by TEN in the June quarter enabled it to maintain its impressive earnings surprise record. TEN has outpaced the Zacks Consensus Estimate in three of the last four quarters and missed once, the average beat being 48.6%.

Tsakos Energy Navigation Price and EPS Surprise

Tsakos Energy Navigation price-eps-surprise | Tsakos Energy Navigation Quote

In the first half of 2025, spot contracts experienced a 27% decline, hurting TEN’s revenue stream. The shipping company’s gross revenues declined to $390.4 million in the first half of 2025 from $415.6 million in the first half of 2024. Vessel operating expenses increased 4% in the first six months of 2025 to $102.3 million due to a larger fleet.

Owing to the company’s crisis-resilient model, TEN currently has a pro forma fleet of 82 vessels. Fleet utilization increased to 96.9% in the first half of 2025 as a result of more vessels under term contracts and fewer vessels in dry-dockings. TEN’s balance sheet remains healthy, driven by strong cash reserves and a fair market value of the fleet at $3.8 billion against $1.8 billion in debt.

TEN’s Mixed YTD Price Performance

Despite tariff-related woes and inflationary pressures, Tsakos Energy shares have gained in double digits so far this year, surpassing the Zacks Transportation - Shipping industry. However, TEN lags the year-to-date price performance of fellow industry players, Euroseas ESEA and Global Ship Lease GSL.

YTD Price Comparison

TEN Shares Undervalued

From a valuation perspective, TEN is relatively cheap. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.87, below the industry’s 2.18. The company has a Value Score of A. TEN’s valuation reading also compares favorably to that of Euroseas and Global Ship Lease. Euroseas and Global Ship Lease also have a Value Score of A each.

TEN’s P/S F12M Vs. Industry, GSL & ESEA

Unimpressive Earnings Estimates for TEN

Reflecting headwinds like the decline in spot contracts and high vessel operating costs, the Zacks Consensus Estimate for full-year 2025 and 2026 has moved south over the past 60 days.

How to Play TEN Post-Q2 Earnings

Agreed that TEN’s valuation is tempting. Moreover, the shipping company’s strategy to expand its fleet by divesting from first-generation vessels and ordering new ones, on attractive long-term contracts, is praiseworthy.

However, headwinds leading to revenue pressure cannot be ignored. TEN is being hurt by declining spot rates, mainly due to reduced Chinese oil imports, apart from rising interest expenses associated with new vessel acquisitions. Rising operating expenses and declining earnings estimates also do not help matters. Moreover, the ongoing geopolitical tensions continue to shape seaborne trade flows.

Given these challenges, TEN, despite its second-quarter earnings beat, looks like a stock to avoid rather than chase. TEN currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research