Cool Company Ltd. (CLCO) | Investment Case

1. Company Snapshot

1.a. Company Description

Cool Company Ltd.engages in the ownership, operation, and management of liquefied natural gas carriers (LNGCs) that provides supply chain support solutions for energy industry.The company owns and operates a fleet of LNGCs, including tri-fuel diesel electric vessels; and floating storage and regasification units for third parties.

Cool Company Ltd.was incorporated in 2018 and is headquartered in Hamilton, Bermuda.

Show Full description

1.b. Last Insights on CLCO

Cool Company Ltd.'s recent performance is driven by several positive factors. The company's Q2 2025 earnings call revealed total operating revenues of $85.5 million, with a net income of $11.91 million. Its long-term charters provide cash flow stability, positioning the company for future demand without heavy spending on newbuilds. A potential acquisition by EPS Ventures Ltd. for $9.65 per share has also been announced. Additionally, a stable balance sheet and strong equity cushion support the company's growth.

1.c. Company Highlights

Last Price	9.77
Change Percentage	0.31%
Open	9.74
Previous Close	9.74
Market Cap ( Millions)	517
Volume	62737
Year High	9.86
Year Low	4.51
M A 50	9.66
M A 200	7.36

FCF Yield	-43.37%
Dividend Yield	0.00%
ROE	7.39%
Debt / Equity	178.18%
Net Debt / EBIDTA	596.20%
Price To Book	0.66
Price Earnings Ratio	9.17
Price To FCF	-2.31
Price To sales	1.6
EV / EBITDA	8.37

2. Earnings Update: CoolCo's Q2 2025 Financial Highlights

CoolCo reported Q2 2025 revenue of $85.5 million, stable from Q1, with average Time Charter Equivalent (TCE) at $69,900, down from $70,600. Adjusted EBITDA rose to $56.5 million, driven by newbuilds like GAIL Sagar and Kool Tiger. Earnings per share (EPS) came in at $0.2239, beating estimates of $0.19.

Publication Date: Sep -28

                                    📋 Highlights
                                    Q2 Revenue Stability:
                                                Revenue held at $85.5M (flat QoQ), with adjusted EBITDA rising to $56.5M ($53.4M Q1) due to newbuilds.
TCE Rate Decline:
                                                Average TCE dropped to $69,900 from $70,600, impacted by oversupply but buffered by long-term charters.
ESG & Fleet Upgrades:
                                                $10M invested in LNG-E vessel upgrades, reducing fuel use by 30% and unlocking $5k/day premium returns.
Market Rebalance Drivers:
                                                LNG supply growth (23%–39% by 2028) and idling of 50 older vessels (215 active) support market balance.
Financial Flexibility:
                                                $226M liquidity (cash + credit facility) and 75% hedged debt (5.6% average rate) enable strategic flexibility.

                                

Financial Performance

The company's financial performance was supported by its backlog of charters, despite lower spot rates due to oversupply. LNG supply growth, including U.S. projects like Louisiana LNG, is expected to boost 2026–2028 volumes by 23%–39%, aiding market balance.

Valuation Metrics

With a P/E Ratio of 8.7, P/B Ratio of 0.63, and P/S Ratio of 1.53, the stock appears reasonably valued. The EV/EBITDA ratio of 8.36 suggests a moderate valuation. The company's ROIC of 6.65% and ROE of 7.39% indicate decent profitability. The Net Debt / EBITDA ratio of 6.02 may raise concerns about the company's leverage.

Operational Highlights

The company has completed 4 out of 5 LNG-E vessel upgrades, with the final one scheduled for Q4, at a total $10 million cost. These upgrades yield a $5,000/day premium, with potential for higher returns as charterers recognize efficiency gains. Drydocks were completed during low-rate periods, minimizing disruption and extending vessel lifespans.

Market Outlook

Market balance hinges on steam turbine vessel exits and demand shifts from Europe to Asia, with short-term volatility influencing vessel deployments. A 3-year charter is indexed to market rates with a $20/day floor and $100+/day ceiling, excluding upgrade upside. Remaining 2026 contract renewals may favor spot or short-term fixes unless TCE rates improve.

3. NewsRoom

New Strong Sell Stocks for Nov. 24

Nov -24

Source: zacks.com

Cool Company Ltd. Q3 2025 Business Update

Nov -20

Source: businesswire.com

Gold (XAUUSD) and Silver Cool Off After Rally: Will Key Support Zones Hold?

Nov -17

Source: fxempire.com

Donald Smith & Co Reduces Stake in Cool Co Ltd: A Strategic Portfolio Adjustment

Nov -15

Source: gurufocus.com

Cool Company Ltd. Announces Record Date for Special Meeting for Proposed Merger with Newly Formed, Wholly Owned Subsidiary of EPS Ventures Ltd

Nov -04

Source: businesswire.com

Amkor Technology: After Bullish Run, Expected To Cool Off Its Circuits

Oct -28

Source: seekingalpha.com

Cash is Old School, Code is Cool: Top Mobile Payment Stocks to Buy

Oct -27

Source: zacks.com

Stock Market Hits Record Highs On Cool CPI Inflation Data; Trump-Xi, Fed, Apple Earnings Due

Oct -24

Source: investors.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.83%)

6. Segments

Time and Voyage Charter

Expected Growth: 4.83%

Time and Voyage Charter from Cool Company Ltd. growth of 4.83% driven by increasing global trade, rising demand for dry bulk commodities, and strategic expansion into new markets. Additionally, cost savings from operational efficiencies, improved fleet utilization, and favorable charter rates also contribute to the growth.

Amortization of Intangible Assets and Liabilities Arising from Charter Agreements, Net

Expected Growth: 4.83%

The 4.83% growth in Amortization of Intangible Assets and Liabilities Arising from Charter Agreements, Net from Cool Company Ltd. is driven by increased vessel utilization, higher charter rates, and strategic fleet expansion. Additionally, the company's focus on cost optimization and efficient operations has contributed to the growth.

Vessel and Other Management Fees

Expected Growth: 4.83%

The 4.83% growth in Vessel and Other Management Fees from Cool Company Ltd. is driven by increased vessel utilization, improved operational efficiency, and a rise in average daily rates. Additionally, the company's expansion into new markets and strategic partnerships have contributed to the growth, along with a favorable regulatory environment and strong demand for vessel management services.

7. Detailed Products

Cyber Security Solutions

Comprehensive security solutions to protect against cyber threats, including network security, endpoint security, and threat intelligence.

Cloud Services

Scalable and secure cloud infrastructure for businesses, including cloud migration, cloud management, and cloud security.

Data Analytics

Advanced data analytics solutions to help businesses make data-driven decisions, including data visualization, machine learning, and predictive analytics.

IT Consulting

Expert IT consulting services to help businesses optimize their IT infrastructure, including IT strategy, IT architecture, and IT implementation.

Digital Transformation

Comprehensive digital transformation services to help businesses adapt to the digital age, including digital strategy, digital innovation, and digital implementation.

8. Cool Company Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is moderate due to the availability of alternative products in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the presence of a large number of customers and the ease of switching to alternative products.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the presence of multiple suppliers and the ease of switching to alternative suppliers.

Threat Of New Entrants

The threat of new entrants is moderate due to the presence of barriers to entry and the ease of entering the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of a large number of competitors and the high level of competition in the market.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	59.07%
Debt Cost	3.95%
Equity Weight	40.93%
Equity Cost	-1.66%
WACC	1.65%
Leverage	144.32%

11. Quality Control: Cool Company Ltd. passed 1 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Algoma Central

A-Score: 7.4/10

Value: 8.2

Growth: 4.4

Quality: 5.4

Yield: 9.0

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

Genco Shipping & Trading

A-Score: 6.1/10

Value: 4.7

Growth: 4.2

Quality: 5.2

Yield: 10.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

Nordic American Tankers

A-Score: 6.0/10

Value: 4.2

Growth: 5.3

Quality: 4.4

Yield: 10.0

Momentum: 6.0

Volatility: 6.0

1-Year Total Return ->

SFL Corporation

A-Score: 5.5/10

Value: 6.9

Growth: 6.0

Quality: 3.3

Yield: 10.0

Momentum: 0.5

Volatility: 6.3

1-Year Total Return ->

Pangaea Logistics Solutions

A-Score: 5.2/10

Value: 7.4

Growth: 4.1

Quality: 4.2

Yield: 9.0

Momentum: 1.5

Volatility: 5.0

1-Year Total Return ->

Cool Company

A-Score: 4.8/10

Value: 8.2

Growth: 0.9

Quality: 4.7

Yield: 7.0

Momentum: 5.0

Volatility: 2.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

9.49%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

1.65%

Cool Company Ltd. - BMG2415A1137

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CLCO

1.c. Company Highlights

Higher Yield

Lower Growth

Cheaper

Earnings Beats

Revenues Beats

Earnings Miss

Revenues Miss

2. Earnings Update: CoolCo's Q2 2025 Financial Highlights

Financial Performance

Valuation Metrics

Operational Highlights

Market Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.83%)

6. Segments

Time and Voyage Charter

Expected Growth: 4.83%

Amortization of Intangible Assets and Liabilities Arising from Charter Agreements, Net

Expected Growth: 4.83%

Vessel and Other Management Fees

Expected Growth: 4.83%

7. Detailed Products

Cyber Security Solutions

Cloud Services

Data Analytics

IT Consulting

Digital Transformation

8. Cool Company Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Cool Company Ltd. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.77$

Current Price

9.77$

Potential

0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA