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Danaos Corp (DAC)
NYSE:DAC
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Danaos
(NYSE:DAC)
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Rating:80Outperform
Price Target:
$109.00
â–²(17.63% Upside)
Danaos Corporation's stock is rated highly due to its strong financial performance, particularly in profitability and balance sheet strength, despite challenges in cash flow. The technical indicators show bullish momentum, and the valuation metrics suggest the stock is undervalued. The earnings call provided a balanced view, with strong contracted revenue and financial stability offset by increased costs and decreased EPS.
Danaos (DAC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.70B
Dividend Yield3.67%
Average Volume (3M)70.91K
Price to Earnings (P/E)3.8
Beta (1Y)0.60
Revenue Growth5.63%
EPS Growth-17.54%
CountryUS
Employees4
SectorIndustrials
Sector Strength72
IndustryMarine Shipping
Share Statistics
EPS (TTM)6.36
Shares Outstanding18,309,654
10 Day Avg. Volume71,481
30 Day Avg. Volume70,914
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 Cap1.00
Enterprise Value/Revenue1.64
Enterprise Value/Gross Profit2.80
Enterprise Value/Ebitda2.53
Forecast
1Y Price Target
$109.00Price Target Upside17.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Danaos Business Overview & Revenue Model
Company DescriptionDanaos Corporation (DAC) is a leading international owner and operator of containerships, primarily engaged in the transportation of containerized cargo. Headquartered in Athens, Greece, the company operates a modern fleet of vessels and provides reliable and efficient shipping services across various sectors of the global trade. Danaos caters to a wide range of shipping companies and plays a crucial role in the supply chain by facilitating the movement of goods worldwide.
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: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed sentiment. While Danaos demonstrated strong financial stability, a robust contracted revenue backlog, and high contract coverage, there were notable challenges such as decreased adjusted EPS, increased operating costs, and lower revenues from the container segment.Q2-2025 Updates
Positive Updates
Strong Contracted Revenue Backlog
Danaos added approximately $113 million to its contracted revenue backlog since the previous earnings release, with a total contracted revenue base of $3.6 billion, providing significant insulation from short-term market fluctuations.
High Contract Coverage
Contracted charter coverage stands at 99% for 2025 and 88% for 2026, including new builds scheduled for delivery during this period.
Strong Financial Position
Danaos maintains a strong balance sheet with minimal leverage, a net debt to adjusted EBITDA ratio of 0.3x, $546 million in cash, and total liquidity of $924 million.
Dividend Declaration and Share Repurchase Program
Declared a dividend of $0.85 per share for the quarter and has $94.3 million remaining authority to repurchase stock under its $300 million share repurchase program.
Negative Updates
Decrease in Adjusted EPS
Adjusted EPS for the quarter was $6.36 per share or $117 million, down from $6.78 per share or $132.3 million in the second quarter of 2024, marking a $15.3 million decrease.
Increased Operating and Interest Costs
Total operating costs increased by $24.7 million due to the rise in the average number of vessels, and net finance costs increased by $3.6 million.
Lower Revenues from Container Segment
Revenues in the container segment decreased by $8.2 million due to lower contracted charter rates between the two periods.
Company Guidance
During the Danaos Corporation Conference Call for the second quarter of 2025, the management provided detailed guidance on the company's financial and operational metrics. They reported an adjusted EPS of $6.36 per share, down from $6.78 in the same quarter of 2024, mainly due to a $24.7 million increase in operating costs and a $3.6 million rise in net finance costs. Despite these increases, operating revenues grew by $15.9 million, driven by a $26.6 million rise due to fleet expansion and higher fleet utilization. The total contracted revenue backlog increased by $113 million since the last earnings release, reaching a total of $3.6 billion, with a 99% charter coverage for 2025 and 88% for 2026. The company's net debt stood at $224 million, with a net debt to adjusted EBITDA ratio of 0.3x, and 53 out of 84 vessels unencumbered. They declared a dividend of $0.85 per share and have $94.3 million remaining under their share repurchase program. The strong balance sheet, with cash at $546 million and total liquidity at $924 million, positions Danaos well for strategic opportunities amidst a stable charter market.Danaos Financial Statement Overview
Summary
Danaos demonstrates strong financial health with robust profitability and a solid balance sheet. However, the significant decline in free cash flow growth poses a potential risk. The company should focus on improving cash flow management to sustain its financial stability in the long term.Income Statement
Danaos has shown consistent revenue growth with a TTM revenue growth rate of 1.67%. The company maintains strong profitability with a net profit margin of 44.62% and an EBIT margin of 48.37% in the TTM. However, there is a slight decline in gross profit margin compared to previous years, indicating potential cost pressures.75
Positive
Balance Sheet
The balance sheet is robust with a low debt-to-equity ratio of 0.21, indicating prudent financial management. Return on equity is healthy at 13.22% in the TTM, though it has decreased from previous years. The equity ratio stands strong at 79.45%, reflecting a solid capital structure.80
Positive
Cash Flow
Cash flow analysis reveals a significant decline in free cash flow growth, with a negative rate of -1133.59% in the TTM. Despite this, the operating cash flow to net income ratio is strong at 4.12, suggesting efficient cash generation relative to earnings. The free cash flow to net income ratio is moderate at 0.31.65
Positive
| 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
Neutral
92.66
Price Trends
92.52
Positive
88.64
Positive
82.91
Positive
Market Momentum
0.31
Positive
45.90
Neutral
25.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAC, the sentiment is Neutral. The current price of 92.66 is below the 20-day moving average (MA) of 93.82, above the 50-day MA of 92.52, and above the 200-day MA of 82.91, indicating a neutral trend. The MACD of 0.31 indicates Positive momentum. The RSI at 45.90 is Neutral, neither overbought nor oversold. The STOCH value of 25.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | 1.47B | 5.17 | 12.73% | 3.71% | -7.24% | -16.39% | |
81 Outperform | 1.14B | 2.98 | 23.89% | 6.03% | 4.43% | 17.82% | |
80 Outperform | $1.70B | 3.82 | 13.38% | 3.67% | 5.63% | -17.54% | |
79 Outperform | 1.37B | 4.72 | 11.82% | 0.41% | -0.47% | -22.23% | |
67 Neutral | 1.59B | 14.04 | 11.75% | 10.03% | -7.73% | -39.13% | |
63 Neutral | 1.76B | 0.88 | 51.42% | 52.95% | 43.57% | 0.00% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
Performance Comparison
DAC
Danaos
92.66
10.59
12.90%
CMRE
Costamare
12.40
1.35
12.22%
GSL
Global Ship Lease
32.32
8.60
36.26%
NMM
Navios Maritime Partners
48.37
-14.51
-23.08%
SFL
SFL Corporation
7.90
-2.25
-22.17%
ZIM
ZIM
14.39
-1.00
-6.50%
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.