One-glance verdict
Undervalued
$342.87 our estimate vs market $85.64
Wall Street consensus: $95.90 (-72.0% lower than our fair-value estimate)
75% below our estimate, below the bear case
Fundamentals snapshot
Scorpio Tankers Inc.
STNG · NYQ · Energy · Oil & Gas Midstream
Current price
$85.64
52-week range
$48.93 - $87.60
Market cap
$4.29B
Balance sheet
Healthy
4.61x Stretched
Net cash $1.11B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Returns 24.6% on equity, ahead of 33% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Forward P/E (15.9x) is higher than trailing (5.3x) - earnings are expected to drop.
- Risk Insider ownership is only 14.6% (peer median: 16.2%).
What this company does
Scorpio Tankers Inc.
Scorpio Tankers is like a taxi service for the oil industry, owning a large fleet of ships that transport refined petroleum products like gasoline and jet fuel around the world. The company makes money by charging for these shipments, so its revenue is directly tied to the daily rental rates for its ships. This matters because the company's profits can swing up or down based on global demand for oil and the number of available ships for hire.
How the company got here
Scorpio Tankers was started in 2009 by Emanuele A. Lauro, separating the tanker fleet from his family's larger shipping business. The company went public on the New York Stock Exchange in 2010, raising money to expand its fleet of ships. A major turning point came in 2017 when it merged with Navig8 Product Tankers, which made it the largest U.S.-listed owner of product tankers. In recent years, global events have created favorable conditions, allowing the company to make significant profits, which it has used to pay down debt and return money to its shareholders.
What it actually does
Think of Scorpio Tankers as a global delivery service for energy, but instead of packages, they move refined petroleum products like gasoline, diesel, and jet fuel across the ocean in very large ships called tankers. The company doesn't own the fuel; it simply gets paid by oil companies, refiners, and traders to transport it from where it's made to where it's needed around the world. Their business is a crucial link in the global energy supply chain (the entire system of producing and delivering fuel to consumers).
LR2 Tankers (Long Range 2)
This is the company's most profitable business line, centered on its largest vessels. LR2 tankers are designed for long-haul voyages, carrying large quantities of fuels like gasoline or diesel between continents, such as from the Middle East to Europe. Because these ships can carry more cargo at once, they are often used on the most important and longest trade routes. This segment generates the largest portion of the company's revenue (the total money earned before subtracting costs).
MR Tankers (Medium Range)
This segment is the workhorse of the fleet and includes the largest number of ships. MR tankers are smaller and more versatile than LR2s, allowing them to serve a wider variety of routes and enter ports that larger ships cannot access. They are typically used for shorter, regional trips, like moving jet fuel between European countries or gasoline along the U.S. coast. This flexibility makes them a steady and significant part of the business.
Handymax Tankers
This is the company's smallest segment, featuring its most nimble vessels. Handymax tankers are smaller than MRs, which gives them even greater flexibility to operate in ports with size restrictions. This part of the business allows Scorpio to offer more specialized services and access niche routes that are not suitable for its larger tankers. While a smaller slice of the overall company, it adds to the fleet's operational flexibility.
What management is betting on now
The company's current strategy is focused on financial strength and rewarding its owners. Management is using the strong profits from high shipping rates to aggressively pay down debt, which reduces the company's financial risk and lowers its daily costs. They are also returning a significant amount of cash to investors through dividends (a portion of profits paid out to shareholders) and share buybacks (when a company buys its own stock to make the remaining shares more valuable). Instead of rapidly expanding the fleet, the focus is on running their modern, fuel-efficient ships to maximize cash generation.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $342.87 vs current price $85.64
Wall Street consensus is the average analyst price target: $95.90 (-72.0% lower than our fair-value estimate).
Our most-likely fair value is $342.87 a share — about 300.4% above today's price of $85.64, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $1.1B - more cash than debt. Interest coverage 4.6x.
Net debt
$-1.11B
Interest coverage
4.61x
Scorpio Tankers Inc.'s profit covers its interest bill about 4.6 times over. which is weaker than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
STNG
BASELINE
Scorpio Tankers Inc.
Total debt $728.88M Interest coverage 4.61x This is the baseline the peer rows are being compared against.
Total debt $652.77M Interest coverage 7.17x +56% vs STNG Carries about 1.6x more debt cushion than STNG.
Total debt $885.36M Interest coverage 7.18x +56% vs STNG Carries about 1.6x more debt cushion than STNG.
Total debt $37.50M Interest coverage 74.24x +1,512% vs STNG Carries about 16.1x more debt cushion than STNG.
Total debt $34.98M Interest coverage 10.33x +124% vs STNG Carries about 2.2x more debt cushion than STNG.
What you should know
The case for and against STNG
3 Rewards
2 Risks
Rewards
-
Returns 24.6% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Trades at 5.3x P/E vs peer median 7.1x (24.7% cheaper).
Risks
-
Forward P/E (15.9x) is higher than trailing (5.3x) - earnings are expected to drop.
-
Insider ownership is only 14.6% (peer median: 16.2%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
5.34x
Forward P/E
15.85x
P/B
1.07x
P/S
3.53x
EV/EBITDA
3.99x
PEG ratio
2.46x
Profitability
How much profit each dollar creates
Gross margin
73.0%
Operating margin
59.7%
Net margin
67.2%
ROE
24.6%
ROA
8.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.20x
Current ratio
6.93x
Quick ratio
6.32x
Total debt
$728.88M
Total cash
$1.84B
Growth
How the business has been compounding
Revenue TTM
$1.22B
Revenue 5Y CAGR
-15.6%
EPS TTM
16.03
EPS 5Y CAGR
-12.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$491.23M
Free CF TTM
$416.84M
FCF margin
34.3%
Dividend
Shareholder payout
Yield
2.1%
Payout ratio
10.7%
Last ex-div date
2026-08-17