One-glance verdict
Within fair range
$18.07 our estimate vs market $48.29
Wall Street consensus: $45.33 (150.8% higher than our fair-value estimate)
167% above our estimate
Fundamentals snapshot
EuroDry Ltd.
EDRY · NCM · Industrials · Marine Shipping
Current price
$48.29
52-week range
$11.95 - $73.07
Market cap
$153.54M
Balance sheet
Distressed
0.03x Concerning
Net debt $71.77M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Returns 10.2% on equity, ahead of 33% of its peers.
- Reward Free cash flow was positive in 1/10 years.
- Risk Stock trades 879.7% above its 5-year average P/E.
- Risk Net debt grew 75.0% over 3 years.
What this company does
EuroDry Ltd.
EuroDry operates a fleet of large cargo ships that transport raw materials like iron ore, coal, and grains across the globe. The company makes money by charging customers to use its ships, so its revenue is tied to global demand for these materials and the daily rates for shipping. This business is a key part of the global supply chain (the network of companies involved in creating and distributing a product), as it moves the basic ingredients for manufacturing and energy.
How the company got here
EuroDry Ltd. was formed in early 2018 when an existing shipping company, Euroseas Ltd., decided to separate its dry bulk shipping business. This move created a new, publicly traded company focused solely on owning and operating vessels that carry dry cargo. The new company, EuroDry, started with a fleet of seven ships that were transferred from its former parent. It is incorporated in the Republic of the Marshall Islands and has its headquarters in Marousi, Greece.
What it actually does
EuroDry is in the business of moving large quantities of raw materials and unpacked goods across the world's oceans. Think of them as a global trucking company, but with huge ships instead of trucks. They don't transport finished products you'd find in a store, but rather the essential ingredients for many industries. Their fleet of ships is hired by other companies to transport items like iron ore for making steel, coal for power plants, and grains for food production.
Dry Bulk Shipping
This is the company's single line of business, which involves owning and operating a fleet of large vessels called drybulk carriers. Customers hire these ships to transport major bulk cargoes, which are large, unpackaged quantities of raw materials like iron ore, coal, and grains. They also carry minor bulks such as bauxite (used to make aluminum), phosphate, and fertilizers. The company makes money by charging fees, known as charter rates, for the use of its ships, which can be for a single voyage or for a set period of time.
What management is betting on now
The company's leadership is focused on growing and modernizing its fleet of ships to meet global demand for raw materials. They plan to do this by selectively buying new or well-maintained secondhand vessels when they see good opportunities in the market. A key part of their strategy is to maintain a flexible approach to hiring out their ships, using a mix of short-term and long-term contracts. This allows them to secure steady income while also being able to take advantage of rising shipping prices.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
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Net income
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Diluted EPS
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Operating cash flow
$12.76M
Free cash flow
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Sources
Revenue
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Net income
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Diluted EPS
-4.62
Operating cash flow
$4.81M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $18.07 vs current price $48.29
Wall Street consensus is the average analyst price target: $45.33 (150.8% higher than our fair-value estimate).
Our most-likely fair value is $18.07 a share — about 62.6% away from today's price of $48.29, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $71.8M. Interest coverage 0.0x.
Net debt
$71.77M
Interest coverage
0.03x
EuroDry Ltd.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
EDRY
BASELINE
EuroDry Ltd.
Total debt $97.39M Interest coverage 0.03x This is the baseline the peer rows are being compared against.
Total debt $106.34M Interest coverage 0.30x +1,080% vs EDRY Carries about 11.8x more debt cushion than EDRY.
Total debt $295.03M Interest coverage 2.09x +8,058% vs EDRY Carries about 81.6x more debt cushion than EDRY.
Total debt $606.16M Interest coverage 0.95x +3,600% vs EDRY Carries about 37.0x more debt cushion than EDRY.
Total debt $349.49M Interest coverage 1.58x +6,066% vs EDRY Carries about 61.7x more debt cushion than EDRY.
Total debt $325.20M Interest coverage 0.66x +2,484% vs EDRY Carries about 25.8x more debt cushion than EDRY.
What you should know
The case for and against EDRY
2 Rewards
2 Risks
Rewards
-
Returns 10.2% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 1/10 years.
Risks
-
Stock trades 879.7% above its 5-year average P/E.
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Net debt grew 75.0% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
14.50x
Forward P/E
7.88x
P/B
1.38x
P/S
2.47x
EV/EBITDA
8.00x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
55.5%
Operating margin
49.8%
Net margin
15.0%
ROE
10.2%
ROA
5.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.89x
Current ratio
1.28x
Quick ratio
1.12x
Total debt
$97.39M
Total cash
$25.62M
Growth
How the business has been compounding
Revenue TTM
$62.27M
Revenue 5Y CAGR
-9.4%
EPS TTM
3.33
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$62.36M
Free CF TTM
$5.40M
FCF margin
8.7%
Dividend
Shareholder payout
Yield
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Payout ratio
0.0%
Last ex-div date
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