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Danaos Corp (DAC)
NYSE:DAC
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Danaos
(NYSE:DAC)
Rating:80Outperform
Price Target:
$109.00
▲(15.12% Upside)
Danaos (DAC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.68B
Dividend Yield3.69%
Average Volume (3M)66.08K
Price to Earnings (P/E)3.8
Beta (1Y)0.62
Revenue Growth5.63%
EPS Growth-17.54%
CountryUS
Employees4
SectorIndustrials
Sector Strength75
IndustryMarine Shipping
Share Statistics
EPS (TTM)6.36
Shares Outstanding18,309,654
10 Day Avg. Volume78,019
30 Day Avg. Volume66,078
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 Cap1.01
Enterprise Value/Revenue1.64
Enterprise Value/Gross Profit2.80
Enterprise Value/Ebitda2.53
Forecast
1Y Price Target
$109.00Price Target Upside15.12% 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: |
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 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 | 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
Positive
94.68
Price Trends
90.43
Positive
86.04
Positive
81.94
Positive
Market Momentum
0.61
Positive
63.55
Neutral
52.89
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 94.68 is above the 20-day moving average (MA) of 92.85, above the 50-day MA of 90.43, and above the 200-day MA of 81.94, indicating a bullish trend. The MACD of 0.61 indicates Positive momentum. The RSI at 63.55 is Neutral, neither overbought nor oversold. The STOCH value of 52.89 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 |
|---|---|---|---|---|---|---|---|
83 Outperform | $1.37B | 4.88 | 14.61% | 3.87% | -7.24% | -16.39% | |
81 Outperform | $1.07B | 2.80 | 26.40% | 6.36% | 4.43% | 17.82% | |
80 Outperform | $1.68B | 3.80 | 13.38% | 3.69% | 5.63% | -17.54% | |
79 Outperform | $1.37B | 4.67 | 9.85% | 0.43% | -0.47% | -22.25% | |
67 Neutral | $1.59B | 14.04 | 6.06% | 10.03% | -7.73% | -39.13% | |
64 Neutral | $10.66B | 15.60 | 8.14% | 2.00% | 2.79% | -14.82% | |
60 Neutral | $1.65B | 0.82 | 59.06% | 56.40% | 43.57% | ― |
* Industrials Sector Average
Performance Comparison
DAC
Danaos
94.68
18.56
24.38%
CMRE
Costamare
11.90
2.30
23.96%
GSL
Global Ship Lease
30.68
8.60
38.95%
NMM
Navios Maritime Partners
47.78
-3.65
-7.10%
GOGL
Golden Ocean Group
7.98
-2.67
-25.07%
ZIM
ZIM
13.51
2.18
19.24%
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.