FLEX LNG (NYSE:FLNG) has put up another steady quarter, reporting Q3 FY 2025 revenue of US$85.7 million and basic EPS of US$0.31. This is backed by trailing twelve month revenue of US$351.0 million and EPS of US$1.82. The company has seen revenue move between US$84.7 million and US$90.9 million per quarter since mid 2024, while quarterly EPS has ranged from US$0.31 to US$0.84 over the same period. These figures feed into a 28.1% net margin and 7.2% earnings growth over the last year. Overall, the latest numbers indicate a business that is holding its pricing and utilisation, with profitability remaining central to the story.

See our full analysis for FLEX LNG.

With the headline figures on the table, the next step is to see how they line up against the main narratives around FLEX LNG, highlighting where the data supports the story and where it pushes back.

Margins Hold Firm at 28.1%

• Over the last 12 months, FLEX LNG converted US$351.0 million of revenue into US$98.5 million of net income, which works out to a 28.1% net margin compared with 25.3% a year earlier.
• Consensus narrative talks up solid profitability and contract coverage, and the margin lift to 28.1% supports the bullish angle that the modern fleet and long-term charters help keep earnings resilient, even though trailing revenue growth of about 3.4% per year is slower than the wider US market at 10.4% per year.
  • The 7.2% earnings growth over the past year sits above the 0.2% five year CAGR, which fits the bullish view that recent performance is stronger than the longer run average.
  • At the same time, the higher margin relies on stable utilization and costs. Any hit to LNG shipping demand or higher operating spend, both mentioned as risks, would directly pressure that 28.1% level.

Have a closer look at how supporters think these margins and contracts could keep working in FLEX LNG's favor over time with 🐂 FLEX LNG Bull Case.

Dividend Appeal Versus Balance Sheet Strain

• The stock offers an 11.53% dividend yield, but that payout is flagged as not being well covered by either earnings or free cash flow, and interest coverage is also reported as weak.
• Bears focus on this combination of high dividends and leverage, arguing that an 11.53% yield alongside weak interest coverage and limited retained earnings can limit flexibility for fleet renewal and debt reduction.
  • The cautious narrative also points out higher drydocking and environmental compliance costs as a future drag, which would make it harder for current earnings of US$98.5 million to comfortably cover both interest and such a large dividend.
  • With the share price at US$26.02 and a payout that is not fully backed by earnings or free cash flow, skeptics question how long the current capital return profile can run without adjustments.

If you are weighing that income against the financial strain, see how skeptics frame the downside case in 🐻 FLEX LNG Bear Case.

P/E And DCF Send Mixed Price Signals

• FLEX LNG trades on a trailing P/E of 14.3x, slightly above both its 13.5x peer average and the 14.1x US Oil & Gas industry average, while a DCF fair value of US$84.12 per share sits well above the current US$26.02 price.
• What stands out is the tension between a modestly higher P/E and a very large gap to the DCF fair value, even as analysts group forecasts around earnings growing about 18.1% per year, which bulls see as support for upside and bears see as a high bar that needs strong execution and stable cash flows.
  • The consensus analyst price target cited at US$25.90 is close to today's US$26.02 share price, suggesting the market is not automatically pricing in the DCF fair value of US$84.12.
  • With revenue expected to grow at only about 3.4% per year, the valuation debate largely hinges on whether higher margins and earnings growth can be sustained enough to meet those longer term earnings estimates.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for FLEX LNG on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

See something in these figures that others might miss? Turn that insight into your own narrative in just a few minutes with Do it your way.

A great starting point for your FLEX LNG research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

See What Else Is Out There

FLEX LNG's high 11.53% dividend yield, weak interest coverage and dividends not fully backed by earnings or free cash flow point to balance sheet pressure.

If that mix of rich income and financial strain makes you cautious, check out our solid balance sheet and fundamentals stocks screener (45 results) to focus on companies where payouts and debt look more robust today.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.