Danaos (DAC) AI Stock Analysis

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Danaos

(NYSE:DAC)

Rating:80Outperform

Price Target:

$109.00

▲(15.34% Upside)

Danaos Corporation's stock is supported by strong technical indicators and attractive valuation metrics. While financial performance is solid, the decline in free cash flow and increased operating costs present risks. The earnings call provided a balanced view with both positive and negative aspects.

Danaos (DAC) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.73B

Dividend Yield3.54%

Average Volume (3M)69.90K

Price to Earnings (P/E)3.9

Beta (1Y)0.61

Revenue Growth5.63%

EPS Growth-17.54%

CountryUS

Employees4

SectorIndustrials

Sector Strength85

IndustryMarine Shipping

Share Statistics

EPS (TTM)6.36

Shares Outstanding18,309,654

10 Day Avg. Volume69,340

30 Day Avg. Volume69,897

Financial Highlights & Ratios

PEG Ratio-0.31

Price to Book (P/B)0.45

Price to Sales (P/S)1.53

P/FCF Ratio-41.14

Enterprise Value/Market Cap0.98

Enterprise Value/Revenue1.64

Enterprise Value/Gross Profit2.80

Enterprise Value/Ebitda2.53

Forecast

1Y Price Target

$109.00

Price Target Upside15.34% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Danaos Business Overview & Revenue Model

Company DescriptionDanaos Corporation, together with its subsidiaries, owns and operates containerships in Australia, Asia, Europe, and the United States. The company offers seaborne transportation services, such as chartering its vessels to liner companies. As of February 28, 2022, it had a fleet of 71 containerships aggregating 436,589 twenty-foot equivalent units in capacity. The company was formerly known as Danaos Holdings Limited and changed its name to Danaos Corporation in October 2005. Danaos Corporation was founded in 1963 and is based in Piraeus, Greece.

How the Company Makes MoneyDanaos generates revenue primarily through the long-term chartering of its fleet of containerships. The company enters into charter agreements with major shipping lines, which pay fixed daily rates for the use of the vessels over specified periods. This model ensures a stable revenue stream, as many contracts are structured for several years. Additionally, Danaos may earn ancillary income through operational services and management of its vessels. Significant partnerships with prominent shipping companies bolster its earnings potential, as these relationships often lead to long-term agreements that provide financial stability and predictability.

Danaos Earnings Call Summary

Earnings Call Date:Aug 04, 2025

(Q2-2025)

% Change Since: 2.34%|

Next Earnings Date:Nov 10, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted Danaos Corporation's strong financial position, robust contracted revenue backlog, and strategic capital allocation approach. However, challenges such as increased operating costs, a decrease in adjusted EPS, and higher interest expenses were noted. The overall sentiment is balanced between positive financial stability and the pressures of increased costs and decreased revenues in some segments.

Q2-2025 Updates

Positive Updates

Strong Contracted Revenue Backlog

Danaos Corporation added $113 million to its contracted revenue backlog, which now stands at $3.6 billion with a 3.8-year average charter duration. Contract coverage is at 99% for 2025 and 88% for 2026.

Financial Stability and Low Leverage

The company maintains a strong balance sheet with minimal leverage, having a net debt to adjusted EBITDA ratio of 0.3x. Net debt is $224 million, and 53 out of 84 vessels are unencumbered and debt-free.

Increased Cash Reserves and Liquidity

Danaos ended the second quarter with $546 million in cash and total liquidity of $924 million, providing ample flexibility for strategic capital deployment.

Dividend Declaration

A dividend of $0.85 per share was declared for the quarter, showcasing the company's commitment to returning value to shareholders.

Negative Updates

Decrease in Adjusted EPS

Adjusted EPS for the quarter was $6.36 per share compared to $6.78 per share in the second quarter of 2024, representing a decrease of $15.3 million in adjusted net income.

Increased Operating Costs

Total operating costs increased by $24.7 million, mainly due to an increase in the average number of vessels in the fleet. Daily operating costs rose to $7,556 per vessel per day from $6,961 in the same quarter of 2024.

Higher Interest Expenses

Interest expense, excluding finance cost amortization, increased by $4.3 million to $8.9 million due to increased average indebtedness by $265 million.

Decrease in Operating Revenues from Container Segment

There was an $8.2 million decrease in revenues on the container segment due to lower contracted charter rates between the two periods.

Company Guidance

During the Danaos Corporation conference call to discuss the financial results for the second quarter of 2025, several key metrics and guidance were highlighted. The company added approximately $113 million to its contracted revenue backlog, bringing the total to $3.6 billion, with a contract coverage of 99% for 2025 and 88% for 2026. Danaos reported an adjusted EPS of $6.36 per share, generating $117 million in adjusted net income, with a slight decrease compared to the previous year. The company's adjusted EBITDA stood at $176 million, reflecting a 0.5% decrease from the prior year's second quarter. Vessel operating expenses increased to $56.4 million, with daily operating costs rising to $7,556 per vessel per day. Interest expenses totaled $8.9 million due to increased average indebtedness, while interest income offset some of this cost. Danaos declared a dividend of $0.85 per share and maintains a $94.3 million authority for stock repurchases. The company's net debt stood at $224 million, with a liquidity position of $924 million, providing flexibility for future capital deployment.

Danaos Financial Statement Overview

Summary

Danaos demonstrates strong revenue growth and robust operating margins, with improved leverage and equity. However, declining net profit margin, return on equity, and negative free cash flow are areas of concern.

Income Statement

Positive

Danaos has demonstrated strong revenue growth over the years, with a notable increase from $461.59M in 2020 to $1.01B in TTM. The gross profit margin has remained robust, consistently above 60%, indicating efficient cost management. However, the net profit margin has decreased slightly in the TTM to 46.37% from 49.81% in 2024, suggesting some pressure on net profitability. The EBIT and EBITDA margins are solid, but the decline in EBIT margin from 53.34% in 2023 to 50.70% in TTM points to potential challenges in maintaining operating efficiency.

Balance Sheet

Positive

Danaos shows a strong equity base, with an equity ratio of 78.72% in TTM, indicating financial stability. The debt-to-equity ratio has improved to 0.22 in TTM from 0.36 in 2023, reflecting reduced leverage and improved financial health. However, the return on equity has declined from 19.10% in 2023 to 13.44% in TTM, which could indicate challenges in generating returns on shareholder equity.

Cash Flow

Neutral

The operating cash flow remains strong at $602.32M in TTM, though free cash flow is negative at -$18.59M, primarily due to high capital expenditures. The operating cash flow to net income ratio is healthy at 1.28, suggesting good cash generation relative to net income. However, the free cash flow to net income ratio is negative, indicating that capital investments are consuming cash, which could pressure liquidity if not managed carefully.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.03B	1.01B	973.58M	993.34M	689.50M	461.59M
Gross Profit	605.65M	615.94M	643.71M	664.96M	412.39M	234.85M
EBITDA	669.46M	675.07M	704.83M	787.63M	444.48M	315.64M
Net Income	459.47M	505.07M	576.30M	559.21M	1.05B	93.15M
Balance Sheet
Total Assets	4.52B	4.34B	3.66B	3.40B	3.63B	2.71B
Cash, Cash Equivalents and Short-Term Investments	546.16M	514.23M	357.84M	267.67M	552.43M	65.66M
Total Debt	761.19M	734.78M	404.17M	501.95M	1.34B	1.46B
Total Liabilities	928.61M	918.85M	644.82M	839.81M	1.54B	1.68B
Stockholders Equity	3.59B	3.42B	3.02B	2.56B	2.09B	1.04B
Cash Flow
Free Cash Flow	192.12M	-37.59M	308.26M	735.61M	72.39M	95.02M
Operating Cash Flow	620.76M	621.75M	576.29M	934.74M	428.11M	265.68M
Investing Cash Flow	-460.42M	-650.79M	-338.53M	176.57M	-143.15M	-170.74M
Financing Cash Flow	16.95M	210.61M	-233.62M	-973.40M	-220.87M	-168.45M

Danaos Technical Analysis

Technical Analysis Sentiment

Positive

Last Price94.50

Price Trends

50DMA

88.93

Positive

100DMA

84.10

Positive

200DMA

81.59

Positive

Market Momentum

MACD

1.68

Negative

RSI

64.76

Neutral

STOCH

70.34

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAC, the sentiment is Positive. The current price of 94.5 is above the 20-day moving average (MA) of 91.97, above the 50-day MA of 88.93, and above the 200-day MA of 81.59, indicating a bullish trend. The MACD of 1.68 indicates Negative momentum. The RSI at 64.76 is Neutral, neither overbought nor oversold. The STOCH value of 70.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DAC.

Danaos Risk Analysis

Danaos disclosed 65 risk factors in its most recent earnings report. Danaos 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

Danaos Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMRE	83 Outperform	$1.28B	4.50	14.61%	4.23%	-7.24%	-16.39%
GSL	81 Outperform	$1.07B	2.80	26.40%	6.11%	4.43%	17.82%
DAC	80 Outperform	$1.73B	3.91	13.38%	3.54%	5.63%	-17.54%
ZIM	75 Outperform	$2.15B	0.91	72.40%	48.96%	65.83%	―
NMM	74 Outperform	$1.29B	4.02	11.19%	0.45%	0.28%	-17.08%
GOGL	68 Neutral	$1.68B	14.80	6.06%	9.51%	-7.73%	-39.13%
Sector *	64 Neutral	€15.25B	19.90	1.57%	3.12%	4.81%	5.42%

* Industrials Sector Average

Performance Comparison

DAC

Danaos

94.50

15.45

19.54%

CMRE

Costamare

10.87

0.86

8.59%

GSL

Global Ship Lease

30.68

5.67

22.67%

NMM

Navios Maritime Partners

44.15

-1.11

-2.45%

GOGL

Golden Ocean Group

8.41

-2.63

-23.82%

ZIM

ZIM Integrated Shipping Services

17.34

5.28

43.78%

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.Date of analysis: Aug 11, 2025