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1. Company Snapshot

1.a. Company Description

Danaos Corporation, together with its subsidiaries, owns and operates containerships in Australia, Asia, Europe, and the United States.The company offers seaborne transportation services, such as chartering its vessels to liner companies.As of February 28, 2022, it had a fleet of 71 containerships aggregating 436,589 twenty-foot equivalent units in capacity.


The company was formerly known as Danaos Holdings Limited and changed its name to Danaos Corporation in October 2005.Danaos Corporation was founded in 1963 and is based in Piraeus, Greece.

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1.b. Last Insights on DAC

Danaos Corporation's recent performance was negatively impacted by the broader industry challenges, as evidenced by the company trading at a 2.8x forward PE ratio. Despite having a contracted revenue business model that shields it from short-term maritime industry volatility, the company's operating revenues decreased by 1.4% year-over-year in Q4 2024, to $237.5 million. Additionally, voyage expenses, excluding commissions, increased by 13.6% year-over-year, further pressuring the company's bottom line.

1.c. Company Highlights

2. Danaos Corporation: Robust Charter Market Drives Q3 2025 Results

Danaos Corporation reported adjusted EPS of $6.75 per share for Q3 2025, slightly below estimates of $6.81, with adjusted net income of $124.1 million. The company's adjusted EBITDA increased 1.5% to $181.6 million, driven by a $4.5 million increase in operating revenues. However, this was partially offset by a $6.1 million increase in total operating costs and a $2.5 million decrease in dividend income. Revenue growth was supported by a robust charter market, with demand for midsized and larger vessels remaining unabated despite the ongoing war in Ukraine and suspended transit through the Red Sea.

Publication Date: Nov -25

📋 Highlights
  • Robust Charter Market:: Strong demand for midsized/larger vessels; new charters secured until 2028, adding $236M to revenue backlog.
  • Vessel Expansion:: Six 1,800 TEU vessels ordered (2027–2029), with four already under 10-year charters.
  • Financial Performance:: Adjusted EPS of $6.75 ($124.1M) vs $6.50 ($126.8M) in Q3 2024, driven by +1.5% EBITDA growth ($181.6M).
  • Debt Management:: $500M bond issued at 6.85% to prepay $300M 2028 bond and reduce secured debt, lowering net debt to $165M.
  • Dividend & Buybacks:: 6% dividend increase to $0.90/share and $86.4M remaining in $300M stock buyback program.

Contracted Revenue Backlog and New Charters

Danaos has secured new charters for vessels opening as far out as 2028, and recently added six 1,800 TEU vessels to its order book, with deliveries scheduled between 2027 and 2029. Four of these vessels have secured 10-year charters, contributing approximately $236 million to the company's contracted revenue backlog. As a result, the company's contracted revenue backlog has improved, standing at $4.1 billion with a 4.3-year average charter duration.

Balance Sheet and Dividend

The company has maintained a healthy balance sheet, with net debt as of September 30, 2025, standing at $165 million, and a net debt to adjusted EBITDA ratio of 0.23x. Danaos has declared a dividend of $0.90 per share, a 6% increase. The company also completed a $500 million unsecured 7-year bond offering with a 6.85% coupon, which will be used to redeem its 2028 $300 million bond and prepay some secured bank credit facilities.

Valuation and Outlook

With a P/E Ratio of 3.79 and an EV/EBITDA ratio of 2.79, Danaos appears to be undervalued. Analysts estimate revenue growth of 4.3% for next year, which could support further upside. The company's ROE of 13.14% and ROIC of 11.2% also indicate strong profitability. As Dr. John Koustas, CEO, noted, the company is "opportununistically investing in the dry bulk Capesize market, where it expects outsized returns due to supply constraints and ton-mile demand increase." The ongoing share repurchase program, with $86.4 million remaining authority, is also expected to support the stock.

3. NewsRoom

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Danaos: Severely Undervalued Despite Industry Shifts

Dec -04

Source: seekingalpha.com

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Market Today: Deal Talks, Retail Wins, AI Chips, and Crypto Volatility

Dec -02

Source: gurufocus.com

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First Look: Versace deal, crypto slump, WBD bids and Airbus woes

Dec -02

Source: gurufocus.com

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Aristides Capital LLC Invests $246,000 in Danaos Corporation $DAC

Nov -27

Source: defenseworld.net

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Danaos Q3: Drybulk Isn't Growing, But The Reasons Seem Valid

Nov -21

Source: seekingalpha.com

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Danaos Corporation (DAC) Q3 2025 Earnings Call Transcript

Nov -18

Source: seekingalpha.com

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Danaos Corporation Reports Third Quarter and Nine Months Results for the Period Ended September 30, 2025

Nov -17

Source: prnewswire.com

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AM Best Upgrades Financial Strength Rating of Greenlight Reinsurance, Ltd. and Greenlight Reinsurance Ireland, DAC to “A” (Excellent)

Nov -13

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

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

6. Segments

Container Vessels

Expected Growth: 4.83%

Danaos Corporation's 4.83% growth in Container Vessels is driven by increasing global trade, rising demand for containerized cargo, and a growing need for efficient transportation solutions. Additionally, the company's modern fleet, strategic partnerships, and cost-effective operations contribute to its growth momentum.

Drybulk Vessels

Expected Growth: 4.83%

Danaos Corporation's 4.83% growth in Drybulk Vessels is driven by increasing global trade, rising commodity demand, and a low orderbook-to-fleet ratio. Additionally, the company's modern fleet and operational efficiency contribute to its growth. Furthermore, the ongoing recovery in the dry bulk market, driven by China's infrastructure development and rising iron ore demand, also supports the company's growth.

7. Detailed Products

Container Shipping

Danaos Corporation provides container shipping services, offering a range of container vessels and logistics solutions to meet the needs of global trade.

Vessel Management

Danaos offers vessel management services, including technical management, crew management, and commercial management, to ensure optimal vessel performance.

Marine Consulting

Danaos provides marine consulting services, offering expertise in ship operations, safety, and environmental management to improve operational efficiency.

Ship Brokerage

Danaos offers ship brokerage services, connecting buyers and sellers of vessels, and providing market insights and analysis.

8. Danaos Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Danaos Corporation is medium due to the availability of alternative shipping services and the ability of customers to switch to other providers.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of major shipping lines and the ability of customers to negotiate rates and terms.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers and the ability of Danaos Corporation to negotiate prices and terms.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the shipping industry, including the need for significant capital investment and regulatory compliance.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the shipping industry, with multiple players competing for market share and customers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 11.82%
Debt Cost 6.16%
Equity Weight 88.18%
Equity Cost 10.45%
WACC 9.94%
Leverage 13.40%

11. Quality Control: Danaos Corporation passed 8 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

Stock-Card
Danaos

A-Score: 7.1/10

Value: 8.5

Growth: 6.4

Quality: 7.6

Yield: 6.9

Momentum: 5.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Euroseas

A-Score: 7.0/10

Value: 7.6

Growth: 8.2

Quality: 7.8

Yield: 8.1

Momentum: 8.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
MPC Container Ships

A-Score: 6.2/10

Value: 8.6

Growth: 6.9

Quality: 7.8

Yield: 10.0

Momentum: 1.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
d'Amico Shipping

A-Score: 5.8/10

Value: 7.8

Growth: 7.9

Quality: 6.7

Yield: 9.4

Momentum: 0.5

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Höegh Autoliners

A-Score: 5.1/10

Value: 8.4

Growth: 2.0

Quality: 7.3

Yield: 10.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Pyxis Tankers

A-Score: 5.1/10

Value: 9.1

Growth: 6.1

Quality: 4.3

Yield: 3.8

Momentum: 4.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

98.07$

Current Price

98.07$

Potential

-0.00%

Expected Cash-Flows