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KNOT Offshore Partners (KNOP)
NYSE:KNOP
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KNOT Offshore Partners
(NYSE:KNOP)
Rating:71Outperform
Price Target:
$9.00
▲(0.45% Upside)
Positive Factors
Revenue Stability
The long-term fixed contracts provide revenue stability and predictability, enhancing financial planning and reducing exposure to market volatility.
Operational Efficiency
High utilization rates indicate strong operational efficiency, maximizing asset use and contributing to consistent revenue generation.
Cash Flow Management
Robust cash flow management supports operational needs and financial stability, allowing for strategic investments and debt servicing.
Negative Factors
Rising Debt Levels
Increasing debt levels can strain financial resources and require careful management to avoid impacting future cash flows and financial flexibility.
Interest Rate Risk
The expiration of interest rate hedges exposes the company to potential increases in interest expenses, affecting profitability and cash flow.
Upcoming Debt Maturities
Upcoming debt maturities require successful refinancing, posing a risk to financial stability if market conditions are unfavorable.
KNOT Offshore Partners (KNOP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$313.04M
Dividend Yield1.23%
Average Volume (3M)53.92K
Price to Earnings (P/E)21.6
Beta (1Y)-0.12
Revenue Growth10.07%
EPS GrowthN/A
CountryUS
Employees1
SectorEnergy
Sector Strength56
IndustryMarine Shipping
Share Statistics
EPS (TTM)0.22
Shares Outstanding34,045,082
10 Day Avg. Volume76,536
30 Day Avg. Volume53,922
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap3.88
Enterprise Value/Revenue3.72
Enterprise Value/Gross Profit9.64
Enterprise Value/Ebitda6.47
Forecast
1Y Price Target
$10.50Price Target Upside17.19% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
KNOT Offshore Partners Business Overview & Revenue Model
Company DescriptionKNOT Offshore Partners LP owns, acquires, and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company provides loading, transportation, discharge, and storage of crude oil under time charters and bareboat charters. As of March 17, 2022, it operated a fleet of seventeen shuttle tankers. The company was founded in 2013 and is headquartered in Aberdeen, the United Kingdom.
How the Company Makes MoneyKNOT Offshore Partners generates revenue primarily through long-term charters of its vessels to major oil companies and other operators in the offshore oil and gas sector. The company typically enters into fixed-rate contracts, which provide stable cash flows and predictable earnings. Revenue is derived from the operational performance of the fleet, with earnings bolstered by a mix of time charters and spot market contracts. Additionally, strategic partnerships with leading oil and gas companies enhance its market position and contribute to its revenue stability. The company's financial health is further supported by its focus on fleet utilization and cost management, ensuring competitive pricing and operational efficiency.
KNOT Offshore Partners Earnings Call Summary
Earnings Call Date:May 21, 2025
(Q1-2025)
| % Change Since: |
Next Earnings Date:Sep 26, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a strong financial performance and optimistic outlook in the Brazilian market. High utilization rates and a strong contracted revenue position were highlighted as positives. However, challenges include increasing debt from recent acquisitions, upcoming debt maturities requiring refinancing, and potential impacts from expiring interest rate hedges. While the company demonstrated financial resilience, shareholder concerns over limited dividend distributions were noted.Q1-2025 Updates
Positive Updates
Strong Financial Performance
Revenues were $84 million, operating income $23.4 million, and net income $7.6 million. Adjusted EBITDA was $52.2 million with $101 million in available liquidity.
High Utilization Rates
Achieved 99.5% utilization, even with two dry dockings, translating to 96.9% overall utilization.
Positive Market Outlook
Strong contracted revenue position of $854 million with an average of 2.3 years on fixed contracts and additional options averaging 4.7 years.
Brazilian Market Growth
Significant growth anticipated in Brazilian FPSOs, with several projects delivering and starting up ahead of schedule.
Successful Vessel Swap
Addressed near-term chartering exposure by swapping the Dan Sabia for the Live Knutsen, which fits within the current repayment profile.
Negative Updates
Debt Increase
Long-term debt increased by $47 million primarily due to the assumption of $73 million of debt from the Live acquisition.
Interest Rate Hedge Expiration
Interest rate hedges will run off by next year, potentially impacting the bottom line due to expected higher rate settings.
Upcoming Debt Maturities
Significant debt maturities and balloon payments are due in 2025 and 2026, requiring successful refinancing efforts.
Limited Dividend Distribution
Cash distribution declared at $0.026 per common unit, with calls for increased dividends from shareholders.
Company Guidance
During the KNOT Offshore Partners' Q1 2025 earnings call, several key metrics and guidance were highlighted. The partnership reported revenues of $84 million, operating income of $23.4 million, and net income of $7.6 million. Adjusted EBITDA stood at $52.2 million. The company maintained a high operational efficiency with a 99.5% utilization rate, although overall fleet utilization was 96.9% due to the initiation of two dry dockings. KNOT closed the quarter with $101 million in available liquidity, consisting of $67 million in cash and cash equivalents and $34 million in undrawn credit facilities. The partnership has a strong contracted revenue position of $854 million on fixed contracts with an average duration of 2.3 years, complemented by additional transfer options averaging 4.7 years. In terms of debt, KNOT's long-term debt increased by $47 million, which reflects the assumption of $73 million of debt from a recent acquisition, offset by a robust annual debt paydown rate of approximately $90 million. The outlook remains positive, with expectations of industry growth, particularly in the Brazilian and North Sea markets, and a strategic focus on maintaining long-term charter visibility and financial resilience.KNOT Offshore Partners Financial Statement Overview
Summary
KNOT Offshore Partners shows solid financial health with consistent revenue growth and strong operational efficiency. The balance sheet reflects moderate leverage typical for the industry, but with a relatively low ROE. Cash flow generation is a significant strength, supporting the company's operations and financial stability. While profitability margins could be improved, the company is well-positioned to sustain its current trajectory.Income Statement
KNOT Offshore Partners has demonstrated a steady increase in revenue, with a TTM revenue growth rate of 4.28% compared to the previous year. The gross profit margin for the TTM is 38.63%, indicating efficient cost management. However, the net profit margin is relatively low at 4.36%, suggesting potential challenges in controlling non-operating expenses. The EBIT margin of 23.51% and EBITDA margin of 57.58% reflect strong operational efficiency.75
Positive
Balance Sheet
The company's debt-to-equity ratio is 1.54, indicating a moderate level of leverage, which is typical for the marine shipping industry. The return on equity (ROE) for the TTM is 2.31%, which is relatively low, suggesting limited profitability relative to shareholder equity. The equity ratio stands at 37.31%, indicating a balanced capital structure with a reasonable proportion of equity financing.70
Positive
Cash Flow
KNOT Offshore Partners has shown robust cash flow management, with a free cash flow growth rate of 6.67% in the TTM. The operating cash flow to net income ratio is 10.30, highlighting strong cash generation relative to net income. The free cash flow to net income ratio is 10.23, indicating efficient conversion of earnings into cash flow.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 326.00M | 312.63M | 290.72M | 268.58M | 281.13M | 279.22M |
| Gross Profit | 125.97M | 200.51M | 80.93M | 72.32M | 109.46M | 128.47M |
| EBITDA | 187.71M | 190.68M | 144.64M | 210.19M | 183.00M | 187.63M |
| Net Income | 14.21M | 14.06M | -34.33M | 58.67M | 53.88M | 65.22M |
Balance Sheet | ||||||
| Total Assets | 1.65B | 1.57B | 1.60B | 1.73B | 1.68B | 1.78B |
| Cash, Cash Equivalents and Short-Term Investments | 67.26M | 66.93M | 63.92M | 47.58M | 62.29M | 52.58M |
| Total Debt | 948.36M | 906.00M | 958.91M | 1.06B | 969.87M | 1.03B |
| Total Liabilities | 1.04B | 961.03M | 989.01M | 1.08B | 1.00B | 1.08B |
| Stockholders Equity | 616.11M | 611.13M | 607.48M | 566.28M | 599.12M | 631.08M |
Cash Flow | ||||||
| Free Cash Flow | 145.28M | 136.20M | 128.86M | 97.63M | 154.88M | 168.90M |
| Operating Cash Flow | 146.37M | 137.15M | 131.64M | 100.94M | 166.41M | 169.24M |
| Investing Cash Flow | 559.00K | -338.00K | -2.78M | -35.51M | -11.54M | -21.43M |
| Financing Cash Flow | -129.70M | -133.32M | -112.51M | -79.97M | -145.15M | -139.26M |
KNOT Offshore Partners Technical Analysis
Positive
8.96
Price Trends
7.28
Positive
6.88
Positive
6.34
Positive
Market Momentum
0.40
Negative
77.97
Negative
87.90
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KNOP, the sentiment is Positive. The current price of 8.96 is above the 20-day moving average (MA) of 7.70, above the 50-day MA of 7.28, and above the 200-day MA of 6.34, indicating a bullish trend. The MACD of 0.40 indicates Negative momentum. The RSI at 77.97 is Negative, neither overbought nor oversold. The STOCH value of 87.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KNOP.
KNOT Offshore Partners Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $274.01M | 4.36 | 9.68% | ― | 13.82% | -10.37% | |
71 Outperform | $170.56M | 10.79 | 5.93% | 7.82% | 1.66% | -46.13% | |
71 Outperform | $313.04M | 21.63 | 2.33% | 1.23% | 10.07% | ― | |
70 Neutral | $456.35M | 10.45 | 6.58% | 4.46% | -9.65% | -46.46% | |
69 Neutral | $350.35M | 24.58 | 2.37% | 5.42% | 15.09% | -71.58% | |
65 Neutral | $15.27B | 7.60 | 4.09% | 5.25% | 4.03% | -61.87% | |
58 Neutral | $207.23M | 13.73 | 4.23% | 2.16% | -4.90% | 21.09% |
* Energy Sector Average
Performance Comparison
KNOP
KNOT Offshore Partners
8.96
2.29
34.33%
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8.44
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-11.06%
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StealthGas
7.33
0.72
10.89%
PANL
Pangaea Logistics Solutions
5.41
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-9.53%
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.