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Ardmore Shipping (ASC)
NYSE:ASC
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Ardmore Shipping
(NYSE:ASC)
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Rating:69Neutral
Price Target:
$16.50
▲(9.05% Upside)
Action:DowngradedDate:02/14/26
The score is driven primarily by a de-risked balance sheet but offset by weaker 2025 profitability and negative free cash flow. Technicals are supportive with an uptrend and positive momentum. The earnings call tone and guidance were strong, but high spot-market exposure and macro/geopolitical volatility keep the overall rating in the upper-middle range.
Positive Factors
De-risked balance sheet
A materially lower debt-to-equity (~0.20x) gives the company durable financial flexibility to weather freight cyclicality, fund opportunistic acquisitions or needed capex, and sustain distributions during rate troughs without immediate refinancing stress.
Fleet upgrades and availability
Fleet-wide drydocking and upgraded coatings increase vessel versatility and command TCE premiums, while reduced future dockings boost revenue days. These structural improvements raise long-term utilization, lower maintenance cadence, and support steadier charter revenues.
Operational tech driving efficiency
Sustained adoption of AI voyage optimisation and hull-maintenance tech improves fuel efficiency, lowers operating cost per day, and enhances earnings capture across cycles. If replicated fleetwide, these structural gains can meaningfully lift margins and cash conversion.
Negative Factors
High spot exposure
With ~82% spot exposure the firm's earnings remain highly sensitive to freight-rate swings. While upside is large in tight markets, structural downturns can rapidly erode revenue and cash flow, complicating multi-quarter planning and capital return predictability.
2025 earnings & cashflow normalization
A sharp 2025 downshift—lower revenue, compressed margins and negative free cash flow—signals reduced earnings durability versus the 2022–24 peak. This weakens near-term internal funding for growth or buybacks and highlights sensitivity to market cycles.
Geopolitical and market volatility
Sanctions, trade-route disruption and geopolitical shocks change ton-mile patterns unpredictably and can raise insurance, bunker costs and off-hire risk. These structural uncertainties increase downside risk to utilization and charter rates over multiple quarters.
Ardmore Shipping (ASC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$593.52M
Dividend Yield2.8%
Average Volume (3M)647.21K
Price to Earnings (P/E)16.6
Beta (1Y)0.40
Revenue Growth-26.81%
EPS Growth-78.30%
CountryUS
Employees56
SectorIndustrials
Sector Strength72
IndustryMarine Shipping
Share Statistics
EPS (TTM)0.28
Shares Outstanding40,623,928
10 Day Avg. Volume781,226
30 Day Avg. Volume647,208
Financial Highlights & Ratios
PEG Ratio-0.17
Price to Book (P/B)0.78
Price to Sales (P/S)1.59
P/FCF Ratio-12.63
Enterprise Value/Market Cap1.18
Enterprise Value/Revenue2.25
Enterprise Value/Gross Profit7.81
Enterprise Value/Ebitda8.33
Forecast
1Y Price Target
$17.00Price Target Upside12.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Ardmore Shipping Business Overview & Revenue Model
Company DescriptionArdmore Shipping Corporation engages in the seaborne transportation of petroleum products and chemicals worldwide. As of February 15, 2022, the company operated a fleet of 25 double-hulled product and chemical tankers. It serves oil majors, oil companies, oil and chemical traders, chemical companies, and pooling service providers. The company was founded in 2010 and is based in Pembroke, Bermuda.
How the Company Makes MoneyArdmore Shipping generates revenue primarily through the chartering of its vessels. The company earns money by entering into time charters or spot contracts with clients, where they provide their tankers for a specified period or for specific voyages. The company benefits from fluctuations in shipping rates and demand for tanker services, which can impact revenue. Additionally, Ardmore Shipping may engage in operational efficiencies and cost management to enhance profitability. Significant partnerships with oil and chemical companies also contribute to its earnings, as they provide a steady stream of contracts and business opportunities.
Ardmore Shipping Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call was predominantly positive: management reported strong earnings, high TCEs, low cash breakeven, successful fleet upgrades, accretive acquisitions (three MRs up ~15%), and meaningful operational/technology gains (AI, advanced coatings, hull robots). At the same time, the company acknowledged material macro and structural risks — geopolitical disruption, an aging global MR fleet, spot-market exposure, and a tighter financing backdrop. Overall, the positive operational and financial developments and balance-sheet improvements substantially outweigh the listed risks, though these risks merit ongoing monitoring.Q4-2025 Updates
Positive Updates
Strong TCE & Rate Environment
Consistent quarter-on-quarter TCE improvement with MR tankers earning $25,300/day in Q4 2025 and $29,100/day in Q1 2026 (50% booked); chemical tankers earned $19,900/day in Q4 and $20,800/day in Q1 (30% booked). Management notes current rates approaching ~3x the company's breakeven.
Solid Financial Results and Returns to Shareholders
Adjusted earnings of $38.8M ($0.95/share) for FY2025 and $11.6M ($0.28/share) for Q4. Declared quarterly cash dividend of $0.09/share (consistent with one-third payout policy). Company reports returning capital equivalent to 26% of market cap since 2022.
Low Cash Breakeven and Balance Sheet Actions
Cash breakeven reduced to $11,700/day ($10,800/day excluding CapEx). Refinanced bank debt into a $350M fully revolving facility and fully redeemed the remaining $30M of preferred shares, lowering financing cost and improving resilience.
Fleet Upgrades, Drydocking and Operational Availability
Completed a major drydocking cycle impacting nearly half the fleet (resulting in limited dockings ~10% of fleet in 2026–27). Upgraded cargo tank coatings on all chemical tankers, enabling higher versatility and TCE premiums up to $6,000/day. Near-perfect on-hire availability recorded for the year.
Accretive Acquisitions and Asset Value Appreciation
Purchased three modern, fuel-efficient MR tankers during 2025 that have appreciated ~15% in value since acquisition. Management highlights disciplined, timely buys at compelling relative values versus market indices.
High Operating Leverage and Earnings Sensitivity
Company cites operating leverage rule of thumb: roughly every $10,000/day increase in TCE could add ~ $2.00 per share to annual earnings. Reported EBITDAR of $27.0M for the quarter and $95.0M for the year.
Technology & Efficiency Initiatives Delivering Material Gains
AI-driven voyage optimisation and shoreside AI tooling reported returns exceeding 100% in implemented cases. Advanced hull coatings and in-water interventions avoid degradation; trials of autonomous hull-cleaning robots show projected returns of 60–70%. Starlink and data initiatives deployed fleetwide to enable these gains.
Favourable Market Fundamentals Supporting Ton-Mile Demand
Structural drivers include eastward shift of refining, extended voyage lengths (e.g., threefold increase in some trades), and tightened compliant supply as sanctioned/dark tonnage reduces available mainstream supply — management cites ~16% of global fleet sanctioned and ~30% operating outside mainstream trades.
Negative Updates
Geopolitical Uncertainty and Market Volatility
Ongoing geopolitical disruptions (Russia/Ukraine-related embargoes, Venezuela, Iran and sanction enforcement) create volatile trade flows and unpredictability. Management acknowledges this is a material source of both upside and downside risk and that reversals (e.g., end of hostilities) could be ton-mile negative.
Aging Global MR Fleet and Compliance Risk
Industry MR fleet average age is ~15 years and a large portion are approaching scrapping/low-utilization windows; utilization for older tonnage falls markedly (below ~50%) as vessels age. This raises structural compliance and maintenance concerns for the broader fleet.
Exposure to Spot Market and Earnings Volatility
Ardmore retains 82% spot market exposure which boosts upside but raises earnings volatility. Despite low breakeven ($11,700/day), a market downturn could quickly pressure results given high spot weighting.
Near-Term Operational Disruption from Drydocking (2025)
2025 drydock program affected nearly 50% of the fleet, which constrained revenue days during the year (though management expects fewer dockings in 2026–27). 2025 fleet CapEx was ~$30M versus a forecasted ~$5M in 2026 (~83% reduction), reflecting concentrated near-term spend.
Macro Funding Pressure and Competition for Capital
Broader financing environment expected to tighten as governments issue large volumes of debt and global CapEx demand rises (management cites multi-trillion dollar issuance needs). This could elevate borrowing costs and intensify competition for capital sources.
Technology Investment Risk and Capital Allocation Uncertainty
Board flagged risks of capital misallocation in the AI/tech space and stressed the need for disciplined IRR-based scrutiny. While Ardmore emphasizes a subscription/adoption approach, the broader market risk of over-investment in speculative tech remains a concern.
Company Guidance
Ardmore’s guidance was detailed and metric-rich: Q4 TCEs were $25,300/day for MRs and $19,900/day for chemical tankers, with Q1-to-date rates of $29,100/day (MRs, 50% booked) and $20,800/day (chemicals, 30% booked) and overall spot exposure at 82%; management reiterated a cash breakeven of $11,700/day ($10,800/day excl. CapEx), noted rates are approaching ~3x breakeven, and quantified that each $10,000/day change in TCE moves annual earnings by ~$2.00/share. FY2025 adjusted earnings were $38.8M ($0.95/share) and Q4 adjusted earnings $11.6M ($0.28/share); EBITDAR was $27M for the quarter and $95M for the year; the company declared a $0.09/share quarterly dividend (one‑third of adjusted earnings). Capital and fleet guidance: refinanced into a $350M fully revolving facility, fully redeemed $30M preferred, completed drydocks on ~50% of the fleet (only ~10% due in 2026–27), forecast fleet CapEx of ~ $5M for 2026 (vs. ~$30M in 2025), fixed a 2020 MR at $26,000/day, and noted three MR purchases have appreciated ~15%.Ardmore Shipping Financial Statement Overview
Summary
Balance sheet strength is the key support (low leverage with debt-to-equity ~0.20x), but 2025 shows a clear normalization: revenue declined, net margins compressed to ~13%, and free cash flow turned negative despite still-positive operating cash flow.Income Statement
Profitability improved materially after the 2020–2021 losses, with strong margins and net income in 2022–2024 (net margin ~29%–33%). However, 2025 shows a clear downshift: revenue fell to $310.2M (from $405.8M in 2024) and net margin compressed to ~13%, indicating a more challenging rate environment and less earnings durability versus prior peak years.68
Positive
Balance Sheet
Leverage has been meaningfully de-risked versus 2020–2021 (debt-to-equity reduced from ~1.13–1.28x to ~0.20x in 2025), leaving a comparatively strong equity base ($634.3M) against $128.9M of total debt. The key watch-out is the decline in returns in 2025 (return on equity down to ~6.5% from ~21% in 2023–2024), reflecting weaker earnings power rather than balance sheet stress.79
Positive
Cash Flow
Cash generation was very strong in 2022–2024 with healthy operating cash flow and positive free cash flow, but 2025 weakened: operating cash flow fell to $81.6M (from $160.4M) and free cash flow turned negative (-$39.1M). While operating cash flow still covered net income well in 2025, the swing to negative free cash flow raises questions around capital spending intensity and near-term cash return capacity.54
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 310.20M | 405.78M | 395.98M | 445.74M | 192.48M |
| Gross Profit | 106.11M | 156.33M | 167.11M | 195.53M | 8.05M |
| EBITDA | 81.03M | 178.39M | 157.85M | 185.62M | 9.92M |
| Net Income | 41.01M | 133.01M | 116.81M | 138.45M | -36.83M |
Balance Sheet | |||||
| Total Assets | 788.72M | 704.80M | 690.95M | 723.86M | 724.53M |
| Cash, Cash Equivalents and Short-Term Investments | 46.84M | 46.99M | 46.80M | 50.57M | 55.45M |
| Total Debt | 128.87M | 44.24M | 93.99M | 184.62M | 372.55M |
| Total Liabilities | 154.39M | 69.38M | 116.51M | 217.42M | 395.54M |
| Stockholders Equity | 634.34M | 635.42M | 574.44M | 506.44M | 329.00M |
Cash Flow | |||||
| Free Cash Flow | -39.07M | 99.42M | 134.22M | 120.40M | -5.52M |
| Operating Cash Flow | 81.65M | 160.44M | 159.61M | 124.21M | -2.89M |
| Investing Cash Flow | -121.00M | -32.97M | -26.84M | 35.41M | 1.63M |
| Financing Cash Flow | 39.21M | -127.29M | -136.54M | -164.50M | -1.66M |
Ardmore Shipping Technical Analysis
Positive
15.13
Price Trends
12.00
Positive
12.05
Positive
11.29
Positive
Market Momentum
0.74
Negative
79.42
Negative
97.26
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASC, the sentiment is Positive. The current price of 15.13 is above the 20-day moving average (MA) of 13.13, above the 50-day MA of 12.00, and above the 200-day MA of 11.29, indicating a bullish trend. The MACD of 0.74 indicates Negative momentum. The RSI at 79.42 is Negative, neither overbought nor oversold. The STOCH value of 97.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ASC.
Ardmore Shipping Risk Analysis
Ardmore Shipping disclosed 67 risk factors in its most recent earnings report. Ardmore Shipping reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ardmore Shipping Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $366.21M | 6.85 | 8.71% | 1.00% | 19.59% | ― | |
71 Outperform | $1.73B | 18.60 | ― | 6.50% | -12.47% | -34.41% | |
69 Neutral | $593.52M | 16.60 | 6.46% | 2.80% | -26.81% | -78.30% | |
66 Neutral | $284.41M | 13.34 | 7.65% | 4.94% | -8.99% | -68.66% | |
64 Neutral | $580.22M | 30.19 | 4.23% | 3.57% | 14.21% | -36.71% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $1.00B | 525.56 | 0.39% | 10.65% | -16.03% | -97.01% |
* Industrials Sector Average
ASC
Ardmore Shipping
15.13
5.22
52.72%
NAT
Nordic American Tanker
4.93
2.61
112.23%
SHIP
Seanergy Maritime
13.81
7.15
107.20%
KNOP
KNOT Offshore Partners
10.37
5.05
94.92%
PANL
Pangaea Logistics Solutions
9.30
4.29
85.63%
ECO
Okeanis Eco Tankers Corp.
49.20
28.76
140.70%
Ardmore Shipping Corporate Events
Ardmore Shipping Posts Lower 2025 Profit but Lifts Dividend as Tanker Markets Strengthen
Feb 12, 2026
Ardmore Shipping reported net income attributable to common stockholders of $9.3 million for the fourth quarter of 2025 and $36.1 million for the full year, with adjusted earnings of $11.6 million and $38.8 million respectively, reflecting solid quarterly performance but a sharp earnings decline versus 2024 when results were boosted by vessel sale gains. The Board declared a $0.09 per-share dividend for the quarter ended December 31, 2025, and the company highlighted stronger spot TCE rates going into early 2026, increased time-charter coverage, completion of its drydocking program, and the full redemption of its Series A preferred stock, positioning Ardmore to benefit from firm tanker markets amid ongoing geopolitical disruptions to global trade.
MR tankers earned an average spot TCE of $25,257 per day and chemical tankers $19,948 per day in the fourth quarter of 2025, with early first-quarter 2026 fixtures indicating higher MR rates and slightly improved chemical tanker rates on partially fixed revenue days. As of December 31, 2025 Ardmore operated 26 vessels, and management emphasized that structural and geopolitical drivers—ranging from the Russia-Ukraine conflict to Red Sea disruptions—are supporting tanker demand and rate strength, even as broader economic and trade-policy uncertainty continues to cloud the long-term operating environment.
The most recent analyst rating on (ASC) stock is a Hold with a $14.00 price target. To see the full list of analyst forecasts on Ardmore Shipping stock, see the ASC Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.