Tenaris (TEN)

Steel pipe manufacturer Tenaris (NYSE:TEN) reported Q3 CY2025 results topping the market’s revenue expectations, but sales fell by 7% year on year to $186.2 million. Its non-GAAP profit of $0.75 per share was 21% above analysts’ consensus estimates.

Company Overview

Operating industrial facilities across the Americas, Europe, Middle East, and Asia, Tenaris (NYSE:TEN) manufactures seamless and welded steel pipes used in oil and gas drilling and transportation.

Energy infrastructure companies build, own, and operate assets including pipelines, storage facilities, and processing plants that transport and handle oil, natural gas, and related products. These businesses often generate fee-based revenues providing cash flow stability. Tailwinds include growing production volumes requiring expanded takeaway capacity and export infrastructure demand. Long-term contracts with creditworthy counterparties reduce commodity price exposure. Headwinds include permitting and regulatory challenges delaying new projects, environmental opposition to pipeline construction, and potential long-term demand decline from energy transition. High capital intensity and interest rate sensitivity affecting financing costs present additional considerations.

Tenaris competes with Vallourec (OTCMKTS:VLOUF), U.S. Steel (NYSE:X), Japan's Nippon Steel Corporation and JFE Holdings, Russia's TMK, ArcelorMittal (NYSE:MT), and welded pipe producers including South Korea's SeAH Steel and India's JSW Group.

The scale of a company’s revenue base is an important lens through which to view the topline, as it signals whether a producer has gone from a vulnerable commodity taker into a durable operating platform. Larger producers generate revenue across many wells, pads, takeaway routes, and geographies rather than relying on a single field or drilling program. Tenaris’s $764.8 million of revenue in the last year is pretty small for the industry, suggesting the company hasn’t hit a level of diversification where investors can sleep easy at night. is a small company in an industry where scale matters.

Cyclical sectors like Energy often flatter weaker operators during favorable price environments, but a longer-term lens separates those from businesses that can consistently perform across market cycles. Unfortunately, Tenaris’s 2.1% annualized revenue growth over the last five years was weak. This was below our standards and is a rough starting point for our analysis.

Within Energy, a singular timeframe, even if it’s quite long-term, only sheds light on how well a company rode the last commodity cycle. To better assess whether a company compounds through cycles, we validate our view with an even longer, ten-year view. Tenaris’s annualized revenue growth of 2.8% over the last ten years aligns with its five-year trend, suggesting its demand was stable.

This quarter, Tenaris’s revenue fell by 7% year on year to $186.2 million but beat Wall Street’s estimates by 14.8%.

In any given year, energy gross margins are heavily influenced by prices, hedging, and cost inflation, but over a full cycle these gross margins reveal which producers are structurally advantaged through superior “rock” quality, infrastructure access, and cost position.

Tenaris, which averaged 48.8% gross margin over the last five years, exhibits mediocre unit economics in the sector. Energy companies with higher gross margins are more likely to remain profitable when commodity prices decline.

Tenaris produced a 55.4% gross profit margin in Q3, in line with the same quarter last year.

Tenaris has managed its cost base well over the last five years. It demonstrated solid profitability for an upstream and integrated energy business, producing an average EBITDA margin of 41.9%.

Looking at the trend in its profitability, Tenaris’s EBITDA margin rose by 25.4 percentage points over the last year, as its sales growth gave it immense operating leverage.

In Q3, Tenaris generated an EBITDA margin profit margin of 51.3%, up 7.5 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses. This adjusted EBITDA beat Wall Street’s estimates by 1.1%.

Tenaris reported $264.3 million of cash and $1.91 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $350.6 million of EBITDA over the last 12 months, we view Tenaris’s 4.7× net-debt-to-EBITDA ratio as safe. We also see its $86.55 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We were impressed by how significantly Tenaris blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $37.11 immediately after reporting.

Updated: March 15, 2026 at 1:02 AM EDT

Are you wondering whether to buy Tenaris or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

Tenaris isn’t a terrible business, but it doesn’t pass our bar. For starters, its revenue growth over the last five years was bottom-tier for the sector. And while Tenaris’s expanding EBITDA margin shows the business has become more efficient, its subscale operations hasn't hit a level of diversification where investors can sleep easy at night.

Tenaris’s P/E ratio based on the next 12 months is 4.7x. While this valuation is fair, the upside isn’t great compared to the potential downside. We're pretty confident there are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $46 on the company (compared to the current share price of $33.76).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.