We came across a bullish thesis on Danaos Corporation on the substitution of the skeptical optimist by Dheeraj Namburu. In this article, we will summarize the thesis of the Bulls on the DAC. The action of Danaos Corporation was negotiated at $ 94.30 to August 7th. The DAC P / E was 3.87 according to Yahoo Finance.
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Danaos Corporation (DAC) entered an exceptionally strong financial form in 2025. The company has aggressively deleted, reducing gross debt to $ 745 million (over 1.5 billion dollars) with a net debt of only ~ 292 million dollars, which only revealed a remarkably weak net / ebitda of ~ 0.4 ×. Liquidity amounts to ~ $ 825 million, exceeding net debt. The costs of interest remain modest at $ 46 million despite the increase in rates, thanks to a largely fixed fixed rate debt profile.
The profitability is robust, with a margin of EBITDA 2024 at 71% and a net margin at 52%. Roe was ~ 16%, while the multiple EV / EBITDA is only 2.6 × – deep value in light. Danaos operates in two segments: its basic container load generated $ 519.8 million in adjusted net profit, while the dry volume has slightly contributed to $ 2.3 million. The use has remained high and cost control remains a force, daily operating costs of 9% below the industry average.
For the future, visibility is strong: ~ 3.7 billion dollars of contracts of contractual orders guarantee income until 2026, supporting BPA from 2025 in the range from $ 22 to $ 25. Although the profits can weaken as high rate charters expire, staggered expirations and new actions with attached charters help to smooth the transition. The proactive management charter strategy and the probably takeoff of the older ships will also alleviate the drawbacks.
Capital yields remain disciplined. Danaos pays an annual dividend of $ 3.40 (yield ~ 4%) with a payment ratio of 12%, and withdrew 14%of shares via buyouts. In the absence of dilution in expected shares, a strong FCF ($ 594 million in 2024) and new entirely funded players, the company retains the flexibility of the opportunistic expansion of the fleet. The evaluation remains convincing: the actions are negotiated at ~ 3 × profits and at ~ 0.5 × tangible book, with a basic case up at $ 110 and a bull case potential at $ 150.
Previously, we have covered a Haussier thesis On Danaos Corporation by Inflexio Research in May 2025, which highlighted its undervaluation, its great backlog and its aggressive buyouts. The company’s shares appreciated ~ 9.8% since the thesis took place. The thesis is always based on the strength of profits continues. Dheeraj Namburu shares a similar point of view but emphasizes the solid assessment and discipline of Danaos’ costs.
Danaos Corporation does not appear on our list of 30 most popular stocks among hedge funds. According to our database, 16 hedge fund portfolios held DAC at the end of the first quarter which was 13 in the previous quarter. Although we recognize the potential of the DAC as an investment, we believe that certain AI actions offer greater upward potential and have a less unknown risk. If you are looking for an extremely undervalued AI stock that should also benefit considerably from the Trump era tariffs and the excessive trend, see our free report on the Best short -term AI stock.
