Euroseas (ESEA) AI Stock Analysis

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Euroseas

(NASDAQ:ESEA)

Rating:80Outperform

Price Target:

$52.00

▲(14.11%Upside)

Euroseas is positioned well within the marine shipping industry with robust financial performance and attractive valuation. The strong technical indicators and positive earnings call further support the stock's outlook. However, cash flow challenges and external economic uncertainties pose risks that must be managed.

Positive Factors

Contract Coverage

ESEA's contract coverage for 2025 is 96.6%, which indicates a strong demand and utilization of its fleet.

Dividends

The quarterly dividend of $0.65, raised from $0.60, remains intact and represents an annualized yield of 8.2%.

Earnings

ESEA reported 1Q25 results with revenue and EPS above expectations.

Negative Factors

Market Uncertainty

Uncertainty related to potential fees and tariff levels will support demand for smaller ships but may impact overall rates.

Revenue Impact

Revenue and EPS estimates are reduced due to the spin-off of Euroholdings.

Euroseas (ESEA) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$319.29M

Dividend Yield5.81%

Average Volume (3M)32.70K

Price to Earnings (P/E)2.5

Beta (1Y)0.96

Revenue Growth14.62%

EPS Growth21.99%

CountryUS

Employees365

SectorIndustrials

Sector Strength88

IndustryMarine Shipping

Share Statistics

EPS (TTM)5.29

Shares Outstanding7,006,612

10 Day Avg. Volume56,347

30 Day Avg. Volume32,697

Financial Highlights & Ratios

PEG Ratio0.16

Price to Book (P/B)0.84

Price to Sales (P/S)0.00

P/FCF Ratio-7.22

Enterprise Value/Market Cap1.48

Enterprise Value/Revenue0.56

Enterprise Value/Gross Profit3.25

Enterprise Value/Ebitda0.77

Forecast

1Y Price Target

$57.50

Price Target Upside26.18% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Euroseas Business Overview & Revenue Model

Company DescriptionEuroseas Ltd. provides ocean-going transportation services worldwide. The company owns and operates containerships that transport dry and refrigerated containerized cargoes, including manufactured products and perishables. As of May 03, 2022, it had a fleet of 18 vessels, including 10 feeder and 8 intermediate containerships with a cargo capacity of approximately 58,871 twenty-foot equivalent unit (teu). The company was incorporated in 2005 and is based in Marousi, Greece.

How the Company Makes MoneyEuroseas generates revenue primarily through the chartering of its fleet of dry bulk carriers and container ships. The company earns money by leasing its vessels to other shipping companies, who use them to transport goods across various international routes. These charter agreements can be on a time charter basis, where vessels are hired for a specific period, or on a voyage charter basis, where vessels are hired for a specific voyage. Key revenue streams include charter hire fees, which are affected by the prevailing market rates for shipping and the demand for maritime transportation services. The company's earnings are also influenced by factors such as fuel costs, vessel operating expenses, and global trade patterns.

Euroseas Earnings Call Summary

Earnings Call Date:Jun 18, 2025

(Q1-2025)

% Change Since: 1.20%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

Euroseas reported strong financial performance with increased revenues and net income, a successful vessel sale agreement, and high charter rate coverage. However, operational challenges, macroeconomic uncertainties, and potential downward pressure on charter rates were noted as significant concerns.

Q1-2025 Updates

Positive Updates

Strong Financial Performance

For the first quarter of 2025, Euroseas reported total net revenues of $56.3 million, a 20.6% increase over the previous year's $46.7 million. Net income for the period was $36.9 million, up from $20 million in the first quarter of 2024.

Successful Vessel Sale Agreement

Euroseas signed an agreement to sell the Motor/Vessel Marcos V for $50 million, expecting a gain exceeding $8.5 million upon completion of the sale in October 2025.

High Charter Rate Coverage

For 2025, approximately 97% of available days were secured at an average rate of $28,250 per day, with 67% of 2026 days covered at $31,600 per day.

Dividend and Share Repurchase

The company declared a quarterly dividend of $0.65 per share and repurchased 463,000 shares for approximately $10.5 million under its share repurchase plan.

Spinoff of Euroholdings

Successfully completed the spinoff of Euroholdings, allowing Euroseas to focus on its younger, more efficient fleet.

Negative Updates

Operational Challenges and Downtime

The Motor/Vessel EM Hydra faced significant downtime due to extensive repairs, although costs were covered by insurance.

Macroeconomic Uncertainty

The IMF revised global GDP growth downwards due to geopolitical risks, with the U.S. growth forecast reduced by nearly 1%.

Potential Downward Pressure on Charter Rates

The company anticipates downward pressure on charter rates due to possible rerouting of vessels, tariff impacts, and economic growth challenges.

Company Guidance

During the Euroseas Conference Call on June 20, 2025, the company provided guidance on various financial metrics for the first quarter ending March 31, 2025. Euroseas reported total net revenues of $56.3 million and a net income of $36.9 million, equating to $5.29 per diluted share. Adjusted net income was $26.2 million or $3.76 per diluted share, while adjusted EBITDA stood at $37.1 million. The Board declared a quarterly dividend of $0.65 per common share, payable on July 16, 2025. The company's share repurchase plan has seen 463,000 shares repurchased for approximately $10.5 million since its inception. Euroseas also disclosed the sale of Motor/Vessel Marcos V for $50 million, expecting a gain exceeding $8.5 million. The fleet's average age is under 13 years, and 97% of available days for 2025 are secured at an average rate of $28,250 per day. The company highlighted continued strong cash flow visibility and a disciplined capital allocation strategy. The IMF revised global GDP growth forecasts downward, with significant geopolitical and economic uncertainties impacting market dynamics.

Euroseas Financial Statement Overview

Summary

Euroseas demonstrates strong financial performance with impressive profitability metrics, including a net profit margin of 58.28% and revenue growth of 16.38%. The balance sheet is solid with a good debt-to-equity ratio, though cash flow challenges from high capital expenditures are notable.

Income Statement

Very Positive

Euroseas has shown a strong performance in its income statement metrics. The gross profit margin for TTM stands at 65.38%, while the net profit margin is an impressive 58.28%. Revenue growth over the past year is 16.38%, indicating strong top-line expansion. EBIT and EBITDA margins are also robust at 62.97% and 75.88%, respectively. The company demonstrates excellent profitability and growth, essential for maintaining competitive positioning in the marine shipping industry.

Balance Sheet

Positive

The balance sheet of Euroseas reflects a solid financial structure. The debt-to-equity ratio is 0.64, indicating a moderate level of leverage. Return on equity is very strong at 34.38%, showcasing effective use of shareholder funds. The equity ratio is 58.15%, suggesting a healthy capital structure with a significant portion of assets financed by equity. These metrics demonstrate a strong financial position, though the reliance on debt could pose risks in volatile markets.

Cash Flow

Positive

Euroseas displays a mixed picture in cash flow metrics. The free cash flow growth rate shows improvement with a less negative free cash flow compared to the previous period. The operating cash flow to net income ratio is 1.11, indicating that the company generates good cash flow from operations relative to its net income. However, the free cash flow to net income ratio is negative, highlighting challenges in converting accounting profits to cash due to high capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	222.53M	212.90M	189.36M	182.69M	93.89M	53.30M
Gross Profit	145.54M	153.70M	119.86M	114.52M	52.14M	12.61M
EBITDA	168.87M	135.74M	143.82M	129.84M	52.95M	14.77M
Net Income	129.69M	112.78M	114.55M	106.24M	42.96M	-83.72K
Balance Sheet
Total Assets	648.75M	591.22M	424.67M	328.59M	221.51M	110.58M
Cash, Cash Equivalents and Short-Term Investments	88.33M	73.74M	58.61M	25.85M	26.53M	3.56M
Total Debt	241.84M	205.40M	130.00M	107.23M	118.04M	69.37M
Total Liabilities	271.49M	228.27M	158.10M	160.44M	144.74M	75.23M
Stockholders Equity	377.26M	362.95M	266.58M	168.16M	76.77M	35.36M
Cash Flow
Free Cash Flow	-44.18M	-50.76M	17.71M	23.39M	-21.49M	1.76M
Operating Cash Flow	144.20M	128.17M	130.01M	114.08M	52.63M	2.43M
Investing Cash Flow	-165.36M	-168.77M	-102.19M	-87.13M	-74.11M	16.30M
Financing Cash Flow	61.31M	56.96M	5.06M	-27.01M	46.65M	-18.32M

Euroseas Technical Analysis

Technical Analysis Sentiment

Positive

Last Price45.57

Price Trends

50DMA

38.59

Positive

100DMA

33.42

Positive

200DMA

32.28

Positive

Market Momentum

MACD

2.17

Positive

RSI

65.45

Neutral

STOCH

21.51

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESEA, the sentiment is Positive. The current price of 45.57 is above the 20-day moving average (MA) of 43.74, above the 50-day MA of 38.59, and above the 200-day MA of 32.28, indicating a bullish trend. The MACD of 2.17 indicates Positive momentum. The RSI at 65.45 is Neutral, neither overbought nor oversold. The STOCH value of 21.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESEA.

Euroseas Risk Analysis

Euroseas disclosed 87 risk factors in its most recent earnings report. Euroseas 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

Euroseas Peers Comparison

Overall Rating

UnderperformOutperform

Sector (71)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ESEA	80 Outperform	$319.29M	2.45	39.30%	5.81%	14.62%	21.99%
GASS	75 Outperform	$242.58M	3.43	10.95%	―	14.08%	28.84%
Sector *	71 Outperform	¥255.26B	12.93	8.49%	3.09%	6.31%	12.94%
SB	69 Neutral	$372.41M	5.44	9.82%	5.54%	-2.98%	-0.96%
CTRM	61 Neutral	$20.77M	2.37	3.07%	―	-32.07%	-9.50%
DSX	58 Neutral	$170.18M	21.37	2.79%	2.74%	-8.74%	-70.04%
GLBS	47 Neutral	$23.98M	61.24	-0.43%	―	17.92%	-131.47%

* Industrials Sector Average

Performance Comparison

ESEA

Euroseas

45.57

14.30

45.73%

DSX

Diana Shipping

1.47

-1.33

-47.50%

GLBS

Globus Maritime

1.16

-0.72

-38.30%

Safe Bulkers

3.64

-2.21

-37.78%

GASS

StealthGas

6.42

-1.17

-15.42%

CTRM

Castor Maritime

2.13

-2.69

-55.81%

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: Jun 28, 2025