Latest news with #Danaos
Yahoo
05-08-2025
- Business
- Yahoo
Danaos (DAC) Q2 Earnings and Revenues Miss Estimates
Danaos (DAC) came out with quarterly earnings of $6.36 per share, missing the Zacks Consensus Estimate of $6.52 per share. This compares to earnings of $6.78 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -2.45%. A quarter ago, it was expected that this shipping company would post earnings of $6.33 per share when it actually produced earnings of $6.04, delivering a surprise of -4.58%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Danaos, which belongs to the Zacks Transportation - Shipping industry, posted revenues of $239 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 3.05%. This compares to year-ago revenues of $246.31 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Danaos shares have added about 13.9% since the beginning of the year versus the S&P 500's gain of 6.1%. What's Next for Danaos? While Danaos has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Danaos was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $7.21 on $260.14 million in revenues for the coming quarter and $27.00 on $1 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Transportation - Shipping is currently in the bottom 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Seanergy Maritime Holdings Corp (SHIP), is yet to report results for the quarter ended June 2025. The results are expected to be released on August 5. This company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of -92.2%. The consensus EPS estimate for the quarter has been revised 24.4% lower over the last 30 days to the current level. Seanergy Maritime Holdings Corp's revenues are expected to be $35.42 million, down 17.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Danaos Corporation (DAC) : Free Stock Analysis Report Seanergy Maritime Holdings Corp (SHIP) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
13-05-2025
- Business
- Yahoo
Estimating The Fair Value Of Danaos Corporation (NYSE:DAC)
Danaos' estimated fair value is US$106 based on 2 Stage Free Cash Flow to Equity Current share price of US$87.16 suggests Danaos is potentially trading close to its fair value Today we will run through one way of estimating the intrinsic value of Danaos Corporation (NYSE:DAC) by taking the expected future cash flows and discounting them to their present value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Don't get put off by the jargon, the math behind it is actually quite straightforward. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$532.0m US$318.0m US$217.4m US$171.1m US$147.0m US$133.7m US$126.4m US$122.5m US$120.9m US$120.8m Growth Rate Estimate Source Analyst x1 Analyst x1 Est @ -31.62% Est @ -21.31% Est @ -14.09% Est @ -9.04% Est @ -5.50% Est @ -3.03% Est @ -1.29% Est @ -0.08% Present Value ($, Millions) Discounted @ 10% US$482 US$261 US$161 US$115 US$89.4 US$73.6 US$62.9 US$55.2 US$49.4 US$44.7 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$1.4b After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.8%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 10%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$121m× (1 + 2.8%) ÷ (10%– 2.8%) = US$1.6b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$1.6b÷ ( 1 + 10%)10= US$594m The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$2.0b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of US$87.2, the company appears about fair value at a 18% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Danaos as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 10%, which is based on a levered beta of 1.006. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for Danaos Strength Debt is not viewed as a risk. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Shipping market. Opportunity Good value based on P/E ratio and estimated fair value. Threat Paying a dividend but company has no free cash flows. Valuation is only one side of the coin in terms of building your investment thesis, and it ideally won't be the sole piece of analysis you scrutinize for a company. It's not possible to obtain a foolproof valuation with a DCF model. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Danaos, we've put together three relevant factors you should assess: Risks: Be aware that Danaos is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious... Future Earnings: How does DAC's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
