Danaos Corporation (DAC)
Valuation Overview•Is Danaos Corporation Overvalued or Undervalued?
Trading at a discount across both intrinsic cash flow and relative peer multiples, indicating a strong margin of safety.
High-quality fundamentals with a strong composite quality score of 81/100, backed by robust profitability and solvency.
Analysts remain cautious, with consensus price targets indicating limited room for upside expansion.
Verdict: High-quality compounder, with growth as the only relative weakness.
Wall Street is cautious, forecasting potential downside. This outlook is strongly supported by highly attractive capital returns, driven by a balanced mix of reliable dividends and share buybacks.
DAC exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins. This is paired with a moderately leveraged but stable balance sheet.
The company exhibits steady, low-single-digit revenue growth however, earnings have severely contracted over the same period. This growth is supported by elite operational efficiency, sustaining an impressive 48.3% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $253.7M | +2.8% | +1.6% | +17.7% | +6.3% | |
| EBITDA | $178.4M | — | -1.1% | — | — | |
| Net Income | $140.4M | -2.1% | -4.0% | — | +15.5% | |
| EPS (Diluted) | $7.70 | +2.7% | -0.6% | +46.9% | +6.0% | |
| Free Cash Flow | $6.6M | +957.3% | -24.0% | +27.7% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 67.7% | 68.9% | 66.7% | 58.6% |
| Operating Margin | 48.3% | 53.6% | 55.7% | 36.3% |
| Net Margin | 49.9% | 52.1% | 73.1% | 34.9% |
| FCF Margin | 28.7% | 19.6% | 28.7% | 33.3% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $5.86 | $6.72 | +14.7% | ||
| Q1'26 | $6.77 | $7.14 | +5.5% | ||
| Q4'25 | $7.10 | $6.75 | -4.9% | ||
| Q3'25 | $6.52 | $6.36 | -2.5% | ||
| Q2'25 | $6.33 | $6.04 | -4.6% | ||
| Q1'25 | $6.52 | $6.93 | +6.3% | ||
| Q4'24 | $6.77 | $6.50 | -4.0% | ||
| Q3'24 | $7.28 | $6.78 | -6.9% |
Total return is +47.6% (1Y), outperforming the benchmark by +22.6%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +34.1% | +24.8% | — |
| 1Y | +47.6% | +22.6% | +4.0% |
| 3YCAGR | +27.0% | +7.7% | +15.1% |
| 5YCAGR | +14.4% | +2.2% | +21.6% |
| 10YCAGR | +12.2% | -1.2% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Danaos Corporation (DAC) valuation, health, and returns.
Danaos Corporation is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. undervalued (implying +254.1% upside to DCF intrinsic value of $445.97)
Danaos Corporation has multiple valuation anchors: DCF Intrinsic Value: $445.97 | Peer Relative Fair Value: $165.98 | Wall Street Analyst Target: $105.00 (implying -16.6% upside). A convergence of these signals offers higher conviction.
Danaos Corporation displays excellent financial health with a composite quality score of 81/100, supported by a Altman Z-Score of 2.5 (grey zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 9.8%.
Danaos Corporation pays a 2.7% dividend yield, covered by a 13% payout ratio with 4 years of growth, supplemented by a 3.3% buyback yield.
Danaos Corporation's current growth trajectory is Stable. The company achieved +2.8% 1Y revenue growth and +2.7% 1Y EPS growth, compared to its 3Y revenue CAGR of +1.6%.
Wall Street consensus is Hold based on 5 analysts, beating EPS expectations in 33% of recent quarters with a 2-quarter streak. The consensus price target represents a -16.6% change from current levels.
Investment risks for Danaos Corporation include: -12.6% 1-year max drawdown. Volatility risk is characterized by a beta of 0.65x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.