ZIM Integrated Shipping (NYSE:ZIM) reported better-than-expected results for the fourth quarter of 2023. However, ZIM’s top-line performance fell year-over-year as higher interest rates continued to impact cargo volumes. Despite the Q4 beat, ZIM stock fell about 14% on Wednesday, reflecting investors’ concern about the company’s future prospects.
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ZIM is a global container shipping company, providing logistics and transportation services worldwide.
Q4 Earnings Snapshot
The company reported a net loss of $1.23 per share, lower than the consensus loss of $1.53 per share. In the year-ago period, ZIM had reported earnings of $3.44 per share. Meanwhile, ZIM’s quarterly sales declined about 45% year-over-year to $1.21 billion but surpassed the Street’s estimates of $1.2 billion. The decline in revenues is primarily due to lower freight rates.
In other key metrics, the Q4 average freight rate per TEU (twenty-foot equivalent) came in at $1,102, down 48% from the year-ago quarter. Also, ZIM reported a total carried volume in the fourth quarter of 786 thousand TEUs, reflecting a year-over-year fall of 4.6%.
2024 Outlook
For 2024, the company expects to report adjusted EBITDA (adjusted earnings before interest, taxes, depreciation, and amortization) between $850 million and $1.45 billion. Currently, the analysts are predicting an adjusted EBITDA of $1.21 billion. Additionally, ZIM projects that adjusted EBIT will come between a loss of $300 million and earnings of $300 million.
Is ZIM a Good Stock to Buy?
Wall Street remains cautiously optimistic about ZIM. On TipRanks, it has a Hold consensus rating based on one Buy, one Hold, and one Sell rating. Also, the analysts’ average price target on ZIM stock of $13.43 implies a 33.4% upside potential. Shares of the company have gained over 23% in the past three months.
