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Danaos (DAC)
:DAC
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Danaos
(NYSE:DAC)
Rating:71Outperform
Price Target:
$97.00
▲(7.63%Upside)
Danaos (DAC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.65B
Dividend Yield4.6%
Average Volume (3M)92.20K
Price to Earnings (P/E)3.7
Beta (1Y)0.63
Revenue Growth4.93%
EPS Growth-17.08%
CountryUS
Employees4
SectorIndustrials
Sector Strength87
IndustryMarine Shipping
Share Statistics
EPS (TTM)6.04
Shares Outstanding18,309,654
10 Day Avg. Volume77,670
30 Day Avg. Volume92,203
Financial Highlights & Ratios
PEG Ratio-0.57
Price to Book (P/B)0.48
Price to Sales (P/S)0.00
P/FCF Ratio-87.45
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue0.48
Enterprise Value/Gross Profit3.03
Enterprise Value/Ebitda0.69
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
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 Corporation generates revenue primarily through long-term time charter contracts with major liner companies. These contracts are typically fixed-rate agreements that provide predictable cash flows and mitigate market volatility risks. The company leases its containerships to these liner companies, who utilize them for their shipping routes around the world. Revenue is largely influenced by the size and specifications of the vessels, charter rates, and the duration of the contracts. Additionally, Danaos capitalizes on strategic partnerships and alliances within the shipping industry to enhance its market position and optimize fleet utilization. Key factors contributing to earnings include operational efficiency, cost management, and maintaining a modern and fuel-efficient fleet to meet environmental regulations and client demands.
Danaos Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: 2.51%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Neutral
Despite strong backlog and strategic fleet optimization, the earnings call revealed significant financial challenges, including lower EPS, increased costs, and segment revenue declines, indicating a cautious outlook.Q1-2025 Updates
Positive Updates
Strong Contracted Revenue Backlog
The contracted revenue backlog has grown to $3.7 billion with a 3.9-year average charter duration, ensuring 99% contract coverage for 2025 and 85% for 2026.
Net Debt and Liquidity Position
Net debt stands at $299 million with a net debt to adjusted EBITDA ratio of 0.4x, and total liquidity, including marketable securities, is at $825 million.
Fleet Optimization and Strategic Focus
Focus on optimizing the performance of the existing fleet with investments in energy-saving devices and upgrades, ensuring competitive operational costs.
Share Repurchase Program
The company has repurchased $36.9 million worth of stock since the last earnings release, with the share repurchase program upsized to $300 million.
Negative Updates
Decreased Adjusted EPS and Net Income
Adjusted EPS for Q1 2025 decreased to $6.04 from $7.15 in Q1 2024, with adjusted net income dropping from $140 million to $113.4 million.
Increased Operating and Finance Costs
Operating costs increased by $19.8 million, primarily due to a larger fleet, and net finance costs increased by $6 million.
Revenue Declines in Segments
The dry bulk segment saw a $9 million revenue decrease due to a softer spot market, and the container segment experienced a $9.4 million revenue decline from lower charter rates.
Higher Vessel Operating Expenses
Vessel operating expenses rose by $8.6 million, with daily operating costs increasing to $7,000 per vessel per day from $6,500.
Rising Interest Expenses
Interest expense increased by $6.6 million due to higher average indebtedness and lower capitalized interest on vessels under construction.
Company Guidance
During the Danaos Corporation conference call for the first quarter of 2025, the company provided detailed financial guidance and insights into its strategic focus amid global market uncertainties. The adjusted earnings per share (EPS) for the quarter was reported at $6.04, down from $7.15 in the same period of 2024, with an adjusted net income of $113.4 million compared to $140 million. The decline was attributed to increased operating costs due to fleet expansion, higher net finance costs, and reduced revenues in the dry bulk and container segments. Despite these challenges, Danaos added over $0.5 billion to its contracted revenue backlog, which now stands at $3.7 billion with a 3.9-year average charter duration. The company's net debt at the end of Q1 was $299 million, with a net debt to adjusted EBITDA ratio of 0.4x. Danaos declared a dividend of $0.85 per share and continued its share repurchase program, now increased to $300 million. The company emphasized its focus on fleet optimization, investing in energy-saving devices to enhance vessel competitiveness, while remaining cautious on new vessel investments due to uncertain future fuel regulations.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
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.75
Positive
Balance Sheet
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.68
Positive
Cash Flow
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.60
Neutral
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.01B | 973.58M | 993.34M | 689.50M | 461.59M |
| Gross Profit | 615.94M | 643.71M | 664.96M | 412.39M | 234.85M |
| EBITDA | 675.07M | 704.83M | 787.63M | 444.48M | 315.64M |
| Net Income | 505.07M | 576.30M | 559.21M | 1.05B | 93.15M |
Balance Sheet | |||||
| Total Assets | 4.34B | 3.66B | 3.40B | 3.63B | 2.71B |
| Cash, Cash Equivalents and Short-Term Investments | 514.23M | 357.84M | 267.67M | 552.43M | 65.66M |
| Total Debt | 734.78M | 404.17M | 501.95M | 1.34B | 1.46B |
| Total Liabilities | 918.85M | 644.82M | 839.81M | 1.54B | 1.68B |
| Stockholders Equity | 3.42B | 3.02B | 2.56B | 2.09B | 1.04B |
Cash Flow | |||||
| Free Cash Flow | -37.59M | 308.26M | 735.61M | 72.39M | 95.02M |
| Operating Cash Flow | 621.75M | 576.29M | 934.74M | 428.11M | 265.68M |
| Investing Cash Flow | -650.79M | -338.53M | 176.57M | -143.15M | -170.74M |
| Financing Cash Flow | 210.61M | -233.62M | -973.40M | -220.87M | -168.45M |
Danaos Technical Analysis
Positive
90.12
Price Trends
86.57
Positive
82.08
Positive
80.89
Positive
Market Momentum
1.09
Negative
58.56
Neutral
71.81
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 90.12 is above the 20-day moving average (MA) of 88.23, above the 50-day MA of 86.57, and above the 200-day MA of 80.89, indicating a bullish trend. The MACD of 1.09 indicates Negative momentum. The RSI at 58.56 is Neutral, neither overbought nor oversold. The STOCH value of 71.81 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 (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $991.61M | 2.63 | 27.25% | 8.01% | 3.94% | 19.85% | |
75 Outperform | $1.15B | 3.94 | 12.57% | 4.68% | 17.77% | -5.90% | |
74 Outperform | $1.19B | 3.71 | 11.19% | 0.49% | 0.28% | -17.08% | |
74 Outperform | $1.86B | 0.79 | 72.40% | 54.08% | 65.83% | ― | |
71 Outperform | $1.65B | 3.70 | 14.14% | 4.60% | 4.93% | -17.08% | |
63 Neutral | $1.64B | 14.48 | 6.06% | 9.54% | -7.73% | -39.13% | |
58 Neutral | HK$14.75B | 4.74 | -3.01% | 5.52% | 3.67% | -54.16% |
* Industrials Sector Average
Performance Comparison
DAC
Danaos
90.12
8.73
10.73%
CMRE
Costamare
9.35
-0.99
-9.57%
GSL
Global Ship Lease
28.09
5.17
22.56%
NMM
Navios Maritime Partners
41.05
-7.84
-16.04%
GOGL
Golden Ocean Group
8.39
-3.52
-29.55%
ZIM
ZIM
15.70
4.62
41.70%
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.