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ZIM (ZIM)
NYSE:ZIM
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ZIM
(NYSE:ZIM)
Rating:79Outperform
Price Target:
$18.00
▲(13.56%Upside)
Positive Factors
Cost Structure
ZIM's cost structure has improved materially and is expected to continue improving in the coming quarters.
Dividends
A dividend with a 9% yield is forecasted for 2024, reflecting the company's policy of a quarterly payout of 30%.
Earnings
The company's earnings for 2025 are projected to be at the upper end of its guidance.
Negative Factors
Freight Rates
Freight rates are expected to decline significantly due to oversupply in the container shipping industry.
Market Oversupply
There is a risk of a multiyear oversupplied container shipping market, impacting ZIM’s earnings and returns.
Trade Demand
Increasing risk to trade demand has led to a lower price objective for ZIM shares.
ZIM (ZIM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.91B
Dividend Yield53.56%
Average Volume (3M)4.78M
Price to Earnings (P/E)0.8
Beta (1Y)1.51
Revenue Growth65.83%
EPS GrowthN/A
CountryUS
Employees4,850
SectorIndustrials
Sector Strength86
IndustryMarine Shipping
Share Statistics
EPS (TTM)2.45
Shares Outstanding120,457,510
10 Day Avg. Volume3,592,797
30 Day Avg. Volume4,775,093
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)0.48
Price to Sales (P/S)0.00
P/FCF Ratio0.49
Enterprise Value/Market Cap3.25
Enterprise Value/Revenue0.20
Enterprise Value/Gross Profit2.01
Enterprise Value/Ebitda0.59
Forecast
1Y Price Target
$17.12Price Target Upside8.01% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering5
ZIM Business Overview & Revenue Model
Company DescriptionZIM Integrated Shipping Services Ltd., together with its subsidiaries, provides container shipping and related services in Israel and internationally. It provides door-to-door and port-to-port transportation services for various types of customers, including end-users, consolidators, and freight forwarders. The company also offers ZIMonitor, a premium reefer cargo tracking service. As of December 31, 2021, it operated a fleet of 118 vessels, which included 110 container vessels and 8 vehicle transport vessels, of which four vessels were owned by it and 114 vessels are chartered-in; and network of 70 weekly lines. The company was incorporated in 1945 and is headquartered in Haifa, Israel.
How the Company Makes MoneyZIM generates revenue primarily through its container shipping services, where it charges customers for the transportation of goods across international waters. The company's revenue streams include freight charges, surcharges, and fees for additional services such as container handling and storage. ZIM's earnings are also influenced by strategic partnerships and alliances with other shipping companies, allowing for expanded service offerings and network optimization. Additionally, ZIM benefits from economies of scale due to its extensive fleet and global operational presence, enhancing its competitive edge in the shipping industry.
ZIM Earnings Call Summary
Earnings Call Date:May 19, 2025
(Q1-2025)
| % Change Since: -9.69%|
Next Earnings Date:Aug 20, 2025
Earnings Call Sentiment Positive
ZIM's earnings call presented a strong financial and operational performance in Q1 2025, with significant volume growth and profitability. However, challenges remain due to geopolitical uncertainties impacting the Transpacific trade and potential costs associated with new US port fees. The company has demonstrated agility in its operations and strategic fleet management.Q1-2025 Updates
Positive Updates
Strong Financial Performance
ZIM reported a revenue of $2 billion and net income of $296 million in Q1 2025, marking a year-over-year increase of 28% and 222%, respectively. The adjusted EBITDA was $779 million with a margin of 39%.
Volume Growth
ZIM achieved a 12% year-over-year increase in carried volumes, well ahead of the market growth of 4.5%.
Dividend Announcement
The Board of Directors declared a dividend of $0.74 per share, totaling $89 million, based on Q1 results.
Fleet Transformation
ZIM completed its fleet transformation with 46 newbuilds, enhancing their cost structure and flexibility. The company operates 126 container ships with a total capacity of approximately 774,000 TEUs.
ESG Achievements
ZIM reduced its carbon intensity by 16% in 2024 compared to 2023, surpassing its 2025 target of a 30% reduction versus the 2021 baseline, reaching a 35% decrease.
Negative Updates
Transpacific Trade Uncertainty
Despite a temporary 90-day suspension on mutual tariffs between the US and China, there remains significant uncertainty impacting the Transpacific trade.
Potential US Port Fee Impact
The updated USTR rule introducing short port fees on Chinese-built and owned vessels adds uncertainty, with nearly half of ZIM’s fleet being Chinese-built.
Suez Canal Route Issues
ZIM and the industry are avoiding the Suez Canal due to safety concerns, impacting logistics and routing decisions.
Company Guidance
During ZIM Integrated Shipping Services' first quarter 2025 financial results conference call, the company provided guidance for the year, maintaining its full-year expectations despite market uncertainties. ZIM anticipates adjusted EBITDA between $1.6 billion and $2.2 billion and adjusted EBIT ranging from $350 million to $950 million, with stronger performance expected in the first half of the year. The company reported Q1 revenue of $2 billion, a 28% increase year-over-year, and net income of $296 million, up 222% from the previous year. Adjusted EBITDA was $779 million with a 39% margin, and adjusted EBIT was $463 million with a 23% margin. The call highlighted ZIM's strategic fleet management and commercial agility, with plans to continue adapting to dynamic market conditions and leveraging its updated fleet for enhanced cost efficiency and competitive positioning.ZIM Financial Statement Overview
Summary
ZIM Integrated Shipping Services demonstrates strong revenue growth and profitability with solid margins and cash flows. However, the financials show some volatility and moderate leverage, necessitating careful monitoring.Income Statement
ZIM Integrated Shipping Services has demonstrated strong revenue growth over recent years, particularly visible in the TTM data with a revenue increase and improved margins. The gross profit margin for TTM is approximately 34.8%, while the net profit margin stands at a robust 26.5%. The EBIT and EBITDA margins are also strong, indicating efficient operations. However, the significant fluctuations in revenue and margins from 2022 to 2023 indicate potential volatility in financial performance.75
Positive
Balance Sheet
The company's balance sheet shows a stable equity base with a debt-to-equity ratio of 1.49 in TTM, suggesting moderate leverage. The return on equity (ROE) is impressive at approximately 59.4% for TTM, showcasing high profitability relative to equity. However, the equity ratio of 34.4% indicates a reliance on debt, which could pose risks in a high-interest-rate environment.68
Positive
Cash Flow
ZIM's cash flow statements reflect strong cash generation capabilities, with a high operating cash flow to net income ratio of 1.77 in TTM. The free cash flow to net income ratio is 1.65, indicating efficient cash utilization. The company has shown a remarkable free cash flow growth rate from 2023 to 2024, contributing to a strong cash position.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 8.43B | 5.16B | 12.56B | 10.73B | 3.99B |
| Gross Profit | 2.78B | -2.21B | 6.43B | 6.07B | 865.02M |
| EBITDA | 3.82B | -955.10M | 7.65B | 6.60B | 1.00B |
| Net Income | 2.15B | -2.70B | 4.62B | 4.64B | 518.00M |
Balance Sheet | |||||
| Total Assets | 11.39B | 8.35B | 11.63B | 9.84B | 2.82B |
| Cash, Cash Equivalents and Short-Term Investments | 2.12B | 1.80B | 3.26B | 3.69B | 629.39M |
| Total Debt | 6.02B | 5.01B | 4.35B | 3.32B | 1.83B |
| Total Liabilities | 7.35B | 5.89B | 5.73B | 5.24B | 2.55B |
| Stockholders Equity | 4.04B | 2.45B | 5.89B | 4.59B | 267.27M |
Cash Flow | |||||
| Free Cash Flow | 3.54B | 904.30M | 5.76B | 4.97B | 838.10M |
| Operating Cash Flow | 3.75B | 1.02B | 6.11B | 5.97B | 880.80M |
| Investing Cash Flow | -223.20M | 1.78B | -1.65B | -3.34B | -35.20M |
| Financing Cash Flow | -3.13B | -2.89B | -4.98B | -1.65B | -460.40M |
ZIM Technical Analysis
Negative
15.85
Price Trends
16.42
Negative
15.36
Positive
15.39
Positive
Market Momentum
-0.07
Positive
41.67
Neutral
32.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZIM, the sentiment is Negative. The current price of 15.85 is below the 20-day moving average (MA) of 15.95, below the 50-day MA of 16.42, and above the 200-day MA of 15.39, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 41.67 is Neutral, neither overbought nor oversold. The STOCH value of 32.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ZIM.
ZIM Risk Analysis
ZIM disclosed 55 risk factors in its most recent earnings report. ZIM 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
ZIM Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $1.21B | 4.27 | 14.61% | 4.56% | -7.24% | -16.39% | |
79 Outperform | $1.91B | 0.81 | 72.40% | 53.56% | 65.83% | ― | |
74 Outperform | $2.14B | 9.24 | 11.09% | 7.82% | 25.60% | -9.32% | |
71 Outperform | $1.68B | 3.77 | 14.14% | 3.65% | 4.93% | -17.08% | |
69 Neutral | $1.33B | 22.15 | 5.09% | 11.76% | 6.68% | -57.55% | |
67 Neutral | £2.85B | 10.49 | 4.46% | 3.55% | 2.44% | -20.00% | |
66 Neutral | $1.63B | 14.36 | 6.06% | 9.80% | -7.73% | -39.13% |
* Industrials Sector Average
Performance Comparison
ZIM
ZIM
15.42
3.55
29.91%
CMRE
Costamare
10.28
0.59
6.09%
DAC
Danaos
91.81
12.87
16.30%
SFL
SFL Corporation
8.98
-1.14
-11.26%
SBLK
Star Bulk Carriers
18.42
-1.37
-6.92%
GOGL
Golden Ocean Group
8.37
-2.22
-20.96%
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.