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Zim Integrated Shipping Services Ltd. (ZIM)
:ZIM
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ZIM Integrated Shipping Services
(NYSE:ZIM)
Rating:78Outperform
Price Target:
$22.00
▲(25.28%Upside)
Positive Factors
Cash Position
ZIM's robust cash position provides significant flexibility to withstand potential market pressures.
Cost Structure
ZIM's cost structure has improved materially and is expected to continue improving in the coming quarters.
Dividend
ZIM announced a higher-than-expected quarterly dividend of $3.17, bringing the annual dividend to $7.14, which is above consensus.
Negative Factors
Freight Rates
Freight rates and earnings for ZIM are expected to decline significantly in 2025, with an EBITDA decline of -54%.
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 Integrated Shipping Services (ZIM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.12B
Dividend Yield40.66%
Average Volume (3M)6.47M
Price to Earnings (P/E)0.9
Beta (1Y)1.53
Revenue Growth65.83%
EPS GrowthN/A
CountryUS
Employees4,850
SectorIndustrials
Sector Strength91
IndustryMarine Shipping
Share Statistics
EPS (TTM)2.45
Shares Outstanding120,457,510
10 Day Avg. Volume5,435,412
30 Day Avg. Volume6,467,076
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.46
Price to Sales (P/S)0.00
P/FCF Ratio0.56
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.60Price Target Upside-5.47% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering5
ZIM Integrated Shipping Services Business Overview & Revenue Model
Company DescriptionZIM Integrated Shipping Services (ZIM) is a leading global container shipping company, providing comprehensive and efficient sea transportation solutions. Headquartered in Israel, ZIM operates a modern fleet of vessels and offers a wide range of shipping services across major international trade routes. The company specializes in containerized cargo shipping, serving various industries with reliable and timely delivery solutions. ZIM is known for its customer-centric approach, advanced digital services, and commitment to sustainability, making it a preferred choice for businesses worldwide in need of maritime logistics services.
How the Company Makes MoneyZIM Integrated Shipping Services generates revenue primarily through its container shipping operations. The company earns money by transporting goods for customers across international waters, charging freight rates based on factors like cargo volume, distance, and service type. ZIM's revenue streams include long-term contracts with major corporations, spot market transactions, and additional services such as logistics, terminal operations, and container leasing. Partnerships with global ports and shipping alliances enhance ZIM's network and operational efficiency, allowing it to optimize shipping routes and reduce costs. The company's focus on digital innovation and personalized customer solutions also contributes to its competitive edge and financial performance.
ZIM Integrated Shipping Services Earnings Call Summary
Earnings Call Date:May 19, 2025
(Q1-2025)
| % Change Since: 0.06%|
Next Earnings Date:Aug 13, 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 Integrated Shipping Services Financial Statement Overview
Summary
ZIM demonstrates robust financial health with significant improvements in income statement metrics, strong cash generation, and a stable yet leveraged balance sheet. The company shows impressive revenue growth and operational efficiency, although the increased debt level needs monitoring.Income Statement
ZIM has demonstrated substantial improvement in its income statement metrics. The gross profit margin significantly increased from a negative value in 2023 to a positive 33.0% in 2024, indicating a robust recovery. Net profit margin also improved to 25.5% in 2024 from a negative margin in the previous year. The revenue growth rate of 63.3% from 2023 to 2024 highlights a strong growth trajectory. EBIT and EBITDA margins are impressive at 30.0% and 45.3%, respectively, showcasing operational efficiency.85
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.49, indicating moderate leverage. The return on equity (ROE) is high at 53.2%, reflecting strong profitability relative to equity. The equity ratio of 35.4% suggests a balanced approach between debt and equity financing. However, the increase in total debt from the previous year poses a potential risk.75
Positive
Cash Flow
The cash flow statement shows a healthy position with a free cash flow growth rate of 291.2% from 2023 to 2024. The operating cash flow to net income ratio is 1.75, indicating strong cash generation relative to net earnings. The free cash flow to net income ratio is robust at 1.65, underscoring the company’s ability to generate cash above its net earnings.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 | EBIT |
| 2.53B | -2.51B | 6.14B | 5.82B | 722.05M | EBITDA |
| 3.82B | -955.10M | 7.65B | 6.60B | 1.00B | Net Income Common Stockholders |
| 2.15B | -2.70B | 4.62B | 4.64B | 518.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 2.12B | 1.80B | 3.26B | 3.69B | 629.39M | Total Assets |
| 11.39B | 8.35B | 11.63B | 9.84B | 2.82B | Total Debt |
| 6.02B | 5.01B | 4.35B | 3.32B | 1.83B | Net Debt |
| 4.70B | 4.09B | 3.33B | 1.78B | 1.26B | 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 Integrated Shipping Services Technical Analysis
Positive
17.56
Price Trends
14.90
Positive
14.89
Positive
14.79
Positive
Market Momentum
0.61
Positive
59.47
Neutral
64.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZIM, the sentiment is Positive. The current price of 17.56 is above the 20-day moving average (MA) of 17.08, above the 50-day MA of 14.90, and above the 200-day MA of 14.79, indicating a bullish trend. The MACD of 0.61 indicates Positive momentum. The RSI at 59.47 is Neutral, neither overbought nor oversold. The STOCH value of 64.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZIM.
ZIM Integrated Shipping Services Risk Analysis
ZIM Integrated Shipping Services disclosed 55 risk factors in its most recent earnings report. ZIM Integrated Shipping Services 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 Integrated Shipping Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.61B | 3.56 | 14.14% | 3.86% | 4.93% | -17.08% | |
78 Outperform | $2.12B | 0.90 | 72.40% | 40.66% | 65.83% | ― | |
76 Outperform | $1.95B | 8.44 | 11.09% | 12.82% | 25.60% | -9.32% | |
75 Outperform | $1.10B | 3.76 | 12.57% | 5.02% | 17.77% | -5.90% | |
66 Neutral | $1.26B | 20.99 | 5.09% | 12.41% | 6.68% | -57.55% | |
66 Neutral | $1.54B | 13.55 | 6.06% | 13.64% | -7.73% | -39.13% | |
66 Neutral | $4.51B | 12.29 | 5.40% | 248.53% | 4.14% | -12.41% |
* Industrials Sector Average
Performance Comparison
ZIM
ZIM Integrated Shipping Services
17.38
4.54
35.36%
CMRE
Costamare
8.90
-2.29
-20.46%
DAC
Danaos
86.00
-4.86
-5.35%
SFL
SFL Corporation
8.70
-3.94
-31.17%
SBLK
Star Bulk Carriers
16.45
-6.85
-29.40%
GOGL
Golden Ocean Group
7.69
-4.63
-37.58%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.