Value
9.9/10data confidence 67%| Component | Sub-score |
|---|---|
| P/E | 10.0 |
| EV/EBITDA | 9.6 |
| Fwd P/E | 9.9 |
| PEG | 10.0 |
- ▸Forward P/E: 5.7x
- ▸PEG: 0.34
- ▸Attractively valued
DAC · Why this verdict
Why Danaos (DAC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Danaos offers one of the deepest value profiles in marine shipping — a forward P/E of 5.4x, a PEG of 0.21, best-in-class margins of 50%, and a 69% margin of safety — with a favorable risk/reward of 1.58-to-1; the main friction is that the stock is already just below its near-term target with about 1.6% headroom remaining, suggesting patience for a pullback toward the entry level.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A forward P/E of 5.4x and a PEG of 0.21 place the stock among the cheapest in its industry on earnings-adjusted terms, with the data noting a 69% margin of safety — a discount this wide typically requires either a structural earnings impairment or a significant market dislocation to be justified. Valuation breakdown | The forward P/E re-rates toward 8x over 12 months as earnings delivery continues, closing at least half the gap to a normal shipping sector multiple. | ↑Improving |
| CounterShipping companies often trade at permanently low multiples due to capital intensity and cycle sensitivity; the low PEG may reflect the market's expectation that current earnings are near a cyclical peak rather than a genuine discount to intrinsic value. | ||
Operating margins of approximately 50% and a perfect Piotroski score of 9 out of 9 position the company as best-in-class among shipping peers, reflecting a lean, high-quality operating structure that is difficult to replicate quickly. Quality breakdown | Operating margins remain above 45% for the next four quarters, sustaining the quality premium over peers. | →Stable |
| CounterFree cash flow converts at only 26% of net income — below the accounting earnings level — suggesting significant capital consumption that tempers the quality picture; a sustained divergence between earnings and cash could signal upcoming capital requirements that pressure the dividend. | ||
Sell-side estimates have risen 7.7% in the last 30 days, indicating that analysts are revising their forward earnings expectations upward — a near-term signal that the fundamental backdrop is improving ahead of the next report. Catalyst breakdown | The 30-day estimate revision trend remains positive above 3% for the next two months, with the next reported quarter delivering a positive earnings surprise. | ↓Deteriorating |
| CounterLight analyst coverage (two covering analysts) means each individual revision creates a disproportionately large percentage move in the consensus figure, potentially overstating the breadth of conviction behind the revision trend. | ||
After two consecutive misses in mid-to-late 2025, the company returned to beating expectations in the two most recent quarters, suggesting that the operational factors behind the prior misses have been resolved. Earnings | The company delivers a positive EPS surprise for at least 3 of the next 4 quarters, confirming that the return to consistent delivery is durable. | ↓Deteriorating |
| CounterThe two most recent beats were modest (1.8% and 5.5%), suggesting the guidance bar was set conservatively after the prior misses; any return to operational headwinds could re-break the still-fragile beat streak. | ||
A forward P/E of 5.4x and a PEG of 0.21 place the stock among the cheapest in its industry on earnings-adjusted terms, with the data noting a 69% margin of safety — a discount this wide typically requires either a structural earnings impairment or a significant market dislocation to be justified.
↑ImprovingValuation breakdown
- Expectation
- The forward P/E re-rates toward 8x over 12 months as earnings delivery continues, closing at least half the gap to a normal shipping sector multiple.
CounterShipping companies often trade at permanently low multiples due to capital intensity and cycle sensitivity; the low PEG may reflect the market's expectation that current earnings are near a cyclical peak rather than a genuine discount to intrinsic value.
Operating margins of approximately 50% and a perfect Piotroski score of 9 out of 9 position the company as best-in-class among shipping peers, reflecting a lean, high-quality operating structure that is difficult to replicate quickly.
→StableQuality breakdown
- Expectation
- Operating margins remain above 45% for the next four quarters, sustaining the quality premium over peers.
CounterFree cash flow converts at only 26% of net income — below the accounting earnings level — suggesting significant capital consumption that tempers the quality picture; a sustained divergence between earnings and cash could signal upcoming capital requirements that pressure the dividend.
Sell-side estimates have risen 7.7% in the last 30 days, indicating that analysts are revising their forward earnings expectations upward — a near-term signal that the fundamental backdrop is improving ahead of the next report.
↓DeterioratingCatalyst breakdown
- Expectation
- The 30-day estimate revision trend remains positive above 3% for the next two months, with the next reported quarter delivering a positive earnings surprise.
CounterLight analyst coverage (two covering analysts) means each individual revision creates a disproportionately large percentage move in the consensus figure, potentially overstating the breadth of conviction behind the revision trend.
After two consecutive misses in mid-to-late 2025, the company returned to beating expectations in the two most recent quarters, suggesting that the operational factors behind the prior misses have been resolved.
↓DeterioratingEarnings
- Expectation
- The company delivers a positive EPS surprise for at least 3 of the next 4 quarters, confirming that the return to consistent delivery is durable.
CounterThe two most recent beats were modest (1.8% and 5.5%), suggesting the guidance bar was set conservatively after the prior misses; any return to operational headwinds could re-break the still-fragile beat streak.
Per-dimension breakdown
Quality
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.7 |
| ROA | 4.3 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.0 |
| FCF quality | 0.1 |
| Moat | 7.2 |
| Rule of 40 | 3.0 |
| Piotroski F | 10.0 |
- ▸Strong margins: 51%
- ▸Earnings quality RED FLAG: 1% FCF/NI
- ▸Rule of 40: 5 (fail)
- ▸Strong Piotroski F-Score: 9/9
Growth
4.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
| EPS growth | 5.4 |
Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 7.1 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.4 |
| Price target | 7.4 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (2.0) — signal dampened
Insider
5.0/10data confidence 50%Peer rank
6.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.4 |
| quality rank | 7.3 |
| growth rank | 3.2 |
- ▸Attractive P/E vs peers
- ▸Best-in-class margins
Technical
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.6 |
| support resistance | 2.3 |
| 52w position | 9.3 |
Risk (lower is worse)
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.3 |
| days to cover | 4.4 |
| volatility | 4.5 |
| put call | 9.7 |
| implied vol | 5.2 |
| beta | 7.9 |
| debt equity | 8.8 |
Catalyst
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.3 |
| dividend safety | 4.0 |
- ▸Earnings concerns: 2B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (7)
- MOMENTUM:6.3>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:95d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.0=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.03
Upside
-0.4%
Downside
11.9%
Sizing output
AVOID
SetupRange Bound — RSI 50 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.5B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.3>=5.5. Top dim: Value at 9.9; weakest: Catalyst at 4.1. No conviction either direction.
The strongest dimensions are Value at 9.9, Peer rank at 6.7, and Risk (lower is worse) at 6.7; the weakest are Catalyst at 4.1, Growth at 4.6, and Insider at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.03 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Extreme Valuation Discount
Trip ifForward P/E expands above 10x for 2 consecutive quarters, indicating the valuation discount has closed.
- P2Best In Class Operating Margins
Trip ifOperating margins fall below 40% for 2 consecutive quarters.
- P3Estimate Revision Momentum
Trip if30-day estimate revision trend turns negative below -5% for 2 consecutive months.
- P4Recent Earnings Beat Recovery
Trip ifEPS surprise turns negative (below 0%) for 2 consecutive quarters.