SFL (NYSE:SFL) has just reported its Q1 2026 results with total revenue of US$170.7 million and a basic EPS loss of US$0.04, setting the tone for how the rest of the year might shape up for margins. The company has seen quarterly revenue shift from US$253.2 million in Q3 2024 to US$185.3 million in Q1 2025 and then to US$170.7 million in Q4 2025. Over the same period, basic EPS has moved from a profit of US$0.34 to a loss of US$0.24 and then to a smaller loss of US$0.04. This progression puts the focus squarely on how efficiently that revenue is translating into earnings. For investors, the key question now is whether these results signal a business that is gradually tightening its margins or one that is still working through pressure on profitability.

See our full analysis for SFL.

With the latest numbers on the table, the next step is to see how they line up against the prevailing narratives around SFL, highlighting where the earnings story supports current views and where it might challenge them.

Losses Persist On Trailing Basis

• On a trailing 12 month view to Q4 2025, SFL booked total revenue of US$719.8 million and a net loss of US$26.4 million, with quarterly swings that ranged from a loss of US$31.9 million in Q1 2025 to a smaller loss of US$4.7 million in Q4 2025.
• Bears point to this continued unprofitability, and the fact that interest and dividends are not well covered by earnings, as a core weakness.
  • Critics highlight that despite revenue staying in the hundreds of millions of US dollars over the last few quarters, earnings still did not cover interest payments. This directly supports the cautious view on financial flexibility.
  • The dividend yield of 6.25% is described as not well covered by earnings, which lines up with the bearish concern that returning cash to shareholders could compete with the company’s ability to fund capex and service debt.

Bears who worry about weak coverage ratios may want to see how that fits into a fuller risk case before drawing conclusions. 🐻 SFL Bear Case

Valuation Sits Above DCF Fair Value

• SFL trades at US$12.80 per share with a P/S of 2.4x, while the available DCF fair value is US$10.90 and the analyst price target reference is US$10.55. This indicates the stock price is above both those reference points and above the wider US Oil & Gas industry P/S of 2.1x, but below the peer group average of 3.0x.
• Consensus narrative suggests the investment case rests on higher future margins and earnings, which the current valuation already factors in to some extent.
  • Analysts expect margins to move from 4.0% today to 17.8% in three years and earnings to reach US$132.0 million. Anyone focusing on the DCF fair value of US$10.90 and the 2.4x P/S needs to decide whether those margin targets justify paying more than both the industry average and the DCF figure.
  • The same consensus expects EPS to climb from US$0.34 to US$0.93 by around 2028, which sits against a trailing 12 month basic EPS loss of US$0.20. The market price therefore already leans toward the view that this shift in profitability will materialize.

Big Earnings Growth Forecasts Vs Recent Losses

• Over the last 12 months SFL remained loss making, with trailing basic EPS of a US$0.20 loss and net income of a US$26.4 million loss. Analyst forecasts call for earnings to grow around 82.41% per year and for the company to reach profitability within three years, while revenue is forecast to rise 10.9% per year, slightly below the cited 11.6% US market growth rate.
• Bullish investors argue that fleet renewal, LNG capable vessels and a roughly US$4.0b fixed rate charter backlog can support that sharp earnings ramp, even starting from recent losses.
  • Supporters point to the charter backlog, with about two thirds tied to investment grade counterparties, and trailing 12 month revenue of US$719.8 million as the base from which forecast margins could expand. This connects directly to the idea that better contracts and a younger fleet can lift profitability from a small loss today.
  • At the same time, the recent quarterly pattern of net losses, including the US$4.7 million loss in Q4 2025, provides a clear check on the bullish view because it shows the business is not yet producing the earnings that would align with the very high growth rates in the forecasts.

If you are weighing that bullish growth story against the current loss making record, it is worth seeing how growth assumptions, margins and fleet data come together in one place. 🐂 SFL Bull Case

Next Steps

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

Mixed signals on earnings, valuation and forecasts can pull sentiment in different directions, so check the underlying data yourself and move quickly to form your own view. You can start with the 1 key reward and 2 important warning signs.

See What Else Is Out There

SFL is still reporting losses on a trailing 12 month basis, with weak interest and dividend coverage putting its financial resilience under pressure.

If those coverage gaps and ongoing losses leave you uneasy, compare that profile against companies in the solid balance sheet and fundamentals stocks screener (46 results) to quickly focus on sturdier options.

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.