KNOT Offshore Partners (KNOP) AI Stock Analysis

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KNOT Offshore Partners

(NYSE:KNOP)

Rating:65Neutral

Price Target:

$7.00

▲(6.06%Upside)

KNOT Offshore Partners demonstrates solid financial performance with strong revenue growth and cash flow. However, high leverage and modest dividend yield present risks. The earnings call suggests a positive market outlook, but challenges such as debt levels and refinancing needs must be addressed.

KNOT Offshore Partners (KNOP) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$230.59M

Dividend Yield1.57%

Average Volume (3M)54.06K

Price to Earnings (P/E)15.9

Beta (1Y)-0.07

Revenue Growth10.07%

EPS GrowthN/A

CountryUS

Employees1

SectorIndustrials

Sector Strength87

IndustryMarine Shipping

Share Statistics

EPS (TTM)0.22

Shares Outstanding34,045,082

10 Day Avg. Volume50,106

30 Day Avg. Volume54,056

Financial Highlights & Ratios

PEG Ratio0.87

Price to Book (P/B)0.58

Price to Sales (P/S)0.00

P/FCF Ratio3.38

Enterprise Value/Market Cap5.82

Enterprise Value/Revenue1.08

Enterprise Value/Gross Profit10.65

Enterprise Value/Ebitda1.90

Forecast

1Y Price Target

$12.35

Price Target Upside87.12% 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 time-charter contracts with major oil companies, which provide stable and predictable cash flows. These contracts typically last between three to five years, with options for extension, ensuring a steady income. The company benefits from its strategic partnerships with oil majors, securing a consistent demand for its services. KNOP's revenue model is significantly supported by the specialized nature of shuttle tankers, which are essential for transporting oil from offshore fields where pipeline infrastructure is not feasible. Additionally, the company focuses on maintaining high fleet utilization rates and operational efficiency, contributing to its profitability.

KNOT Offshore Partners Earnings Call Summary

Earnings Call Date:May 21, 2025

(Q1-2025)

% Change Since: 1.38%|

Next Earnings Date:Aug 28, 2025

Earnings Call Sentiment Neutral

KNOT Offshore Partners has delivered strong revenue and utilization rates, supported by a positive market outlook and successful operational strategies. However, the need to manage significant debt levels and expiring interest rate hedges, along with modest dividend payments, present challenges.

Q1-2025 Updates

Positive Updates

Strong Revenue and Utilization

KNOT Offshore Partners reported Q1 2025 revenues of $84 million with an impressive 99.5% utilization rate, excluding dry dockings.

Positive Market Outlook

The company anticipates significant growth in shuttle tanker demand, driven by new FPSO projects in Brazil and the North Sea.

Strong Contracted Revenue

KNOT has a strong contracted revenue position of $854 million with an average contract duration of 2.3 years.

Successful Vessel Swap

The swap of Dan Sabia for Live Knutsen was completed, enhancing the fleet and operational capacity.

Negative Updates

Debt Levels and Refinancing Needs

The company took on $73 million in debt from a vessel acquisition, raising long-term debt by $47 million. Refinancing is needed for significant balloon payments due in 2025 and 2026.

Interest Rate Hedge Expiry

Interest rate hedges will expire over the next 1.5 years, potentially increasing interest expenses.

Limited Dividend Increase

Cash distribution remains low at $0.026 per common unit, with no immediate plans for significant increases.

Company Guidance

During KNOT Offshore Partners' First Quarter 2025 earnings call, guidance was provided on various financial metrics and operational updates. The partnership reported revenues of $84 million, an operating income of $23.4 million, and a net income of $7.6 million. Adjusted EBITDA was $52.2 million, with available liquidity closing at $101 million, comprising $67 million in cash and cash equivalents, plus $34 million in undrawn capacity on credit facilities. The utilization rate was 99.5%, considering two dry dockings, leading to an overall utilization of 96.9%. A cash distribution of $0.026 per common unit was declared, paid in early May. The contracted revenue position was strong at $854 million at the end of Q1, with fixed contracts averaging 2.3 years and additional options averaging 4.7 years. The partnership anticipates a $90 million debt paydown annually and sees potential growth opportunities in the Brazilian market due to the demand for shuttle tankers. Additionally, KNOT is focused on refinancing several facilities due this year while maintaining a robust financial and operational performance.

KNOT Offshore Partners Financial Statement Overview

Summary

KNOT Offshore Partners shows solid revenue growth and strong cash flow performance, which contribute to a stable financial outlook. However, high leverage and a low net profit margin highlight potential risks that could affect financial health and profitability.

Income Statement

Positive

KNOT Offshore Partners experienced a strong revenue growth of 7.55% in 2024. Gross profit margin improved significantly due to higher gross profit, reaching approximately 64.14%. However, net profit margin remains low at 4.5%, indicating potential efficiency issues despite overall revenue growth. The EBIT and EBITDA margins are robust at 23.33% and 61.91%, respectively, showing good operational health.

Balance Sheet

Neutral

The company exhibits a high debt-to-equity ratio of 1.48, suggesting significant leverage that could pose financial risks. However, the return on equity (ROE) is relatively low at 2.3%, indicating limited returns on equity investment. The equity ratio stands at 38.88%, showing moderate capital structure stability but with room for improvement in reducing leverage.

Cash Flow

Positive

Cash flow statements reveal healthy free cash flow growth of 5.69% in 2024. The operating cash flow to net income ratio is high at 9.75, indicating strong cash generation relative to net income. The free cash flow to net income ratio is exceptionally high at 9.68, reflecting effective cash management and operational efficiency.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
	EBIT
76.64M	72.92M	25.14M	66.22M	101.99M	123.08M
	EBITDA
187.71M	190.68M	144.64M	210.19M	183.00M	187.63M
	Net Income Common Stockholders
14.21M	14.06M	-34.33M	58.67M	53.88M	65.22M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
67.26M	66.93M	63.92M	47.58M	62.29M	52.58M
	Total Assets
1.65B	1.57B	1.60B	1.73B	1.68B	1.78B
	Total Debt
948.36M	906.00M	958.91M	1.06B	969.87M	1.03B
	Net Debt
881.10M	839.07M	894.99M	1.01B	907.57M	979.25M
	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
109.47M	136.20M	128.86M	97.63M	154.88M	168.90M
	Operating Cash Flow
110.35M	137.15M	131.64M	100.94M	166.41M	169.24M
	Investing Cash Flow
-268.00K	-338.00K	-2.78M	-35.51M	-11.54M	-21.43M
	Financing Cash Flow
-93.02M	-133.32M	-112.51M	-79.97M	-145.15M	-139.26M

KNOT Offshore Partners Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.60

Price Trends

50DMA

6.48

Positive

100DMA

6.11

Positive

200DMA

6.15

Positive

Market Momentum

MACD

0.02

Negative

RSI

57.54

Neutral

STOCH

75.11

Neutral

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 6.6 is above the 20-day moving average (MA) of 6.47, above the 50-day MA of 6.48, and above the 200-day MA of 6.15, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 57.54 is Neutral, neither overbought nor oversold. The STOCH value of 75.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KNOP.

KNOT Offshore Partners Risk Analysis

KNOT Offshore Partners disclosed 68 risk factors in its most recent earnings report. KNOT Offshore Partners 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

KNOT Offshore Partners Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GASS	75 Outperform	$237.77M	3.60	10.95%	―	14.08%	28.84%
SHIP	69 Neutral	$142.35M	5.47	10.11%	5.82%	17.53%	58.04%
SB	68 Neutral	$396.96M	5.80	9.82%	5.15%	-2.98%	-0.96%
Sector *	66 Neutral	$4.47B	12.22	5.40%	3.65%	4.14%	-12.00%
KNOP	65 Neutral	$230.59M	15.93	2.33%	1.57%	10.07%	―
PANL	63 Neutral	$305.80M	13.65	4.05%	4.29%	13.10%	-54.75%
DSX	62 Neutral	$186.39M	24.42	2.79%	2.48%	-8.74%	-70.04%

* Industrials Sector Average

Performance Comparison

KNOP

KNOT Offshore Partners

6.60

-0.40

-5.71%

DSX

Diana Shipping

1.68

-1.05

-38.46%

Safe Bulkers

3.88

-1.52

-28.15%

SHIP

Seanergy Maritime

6.87

-2.96

-30.11%

GASS

StealthGas

6.73

-0.67

-9.05%

PANL

Pangaea Logistics Solutions

4.66

-2.43

-34.27%

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.