Ardmore Shipping (ASC) AI Stock Analysis

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Ardmore Shipping

(NYSE:ASC)

71Outperform

Ardmore Shipping demonstrates strong financial stability and attractive valuation metrics, which are key strengths. The company's profitability and strategic investments indicate potential for future growth. However, technical analysis suggests bearish trends, and market volatility poses a risk. Overall, the stock is well-positioned for value investors seeking high returns and stability, despite short-term market challenges.

Ardmore Shipping (ASC) vs. S&P 500 (SPY)

Market Cap

$375.83M

Dividend Yield10.23%

Average Volume (3M)742.70K

Price to Earnings (P/E)3.0

Beta (1Y)0.22

Revenue Growth46.10%

EPS GrowthN/A

CountryUS

Employees56

SectorIndustrials

Sector Strength70

IndustryMarine Shipping

Share Statistics

EPS (TTM)3.06

Shares Outstanding40,455,240

10 Day Avg. Volume869,796

30 Day Avg. Volume742,696

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.00

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$12.50

Price Target Upside34.55% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Ardmore Shipping Business Overview & Revenue Model

Company DescriptionArdmore Shipping Corporation (ASC) is a leading provider of seaborne transportation of petroleum products and chemicals worldwide. The company operates a fleet of modern and sophisticated vessels designed for the safe and efficient delivery of refined oil products and chemicals. Ardmore Shipping focuses on the MR product and chemical tanker segments, servicing major oil companies, oil and chemical traders, and chemical companies globally.

How the Company Makes MoneyArdmore Shipping makes money through the chartering of its tanker vessels to customers seeking transportation for petroleum products and chemicals. The company earns revenue primarily through time charters and spot market voyages, where customers pay Ardmore for the use of its vessels over a specified period or for a specific voyage, respectively. The charter rates depend on market conditions, vessel availability, and the duration of the charter. Partnerships with major oil companies and traders, along with strategic fleet management and operational efficiency, contribute significantly to Ardmore's earnings.

Ardmore Shipping Financial Statement Overview

Summary

Ardmore Shipping demonstrates strong financial health with solid profitability, effective debt management, and robust cash generation. The company has seen improvements in profitability margins, a decrease in debt, and an increase in stockholders' equity, reflecting overall financial stability. The decline in free cash flow due to higher capital expenditures is a point of concern but indicates strategic investments for future growth.

Income Statement

Positive

Ardmore Shipping has shown a strong performance in recent years, with significant improvements in profitability. The gross profit margin has improved to 38.54% in 2024 from 38.73% in 2023, and the net profit margin has also increased to 32.79% from 29.50% in the same period. Revenue growth was modest at 2.48% in 2024 compared to the previous year, indicating stable demand. The EBIT and EBITDA margins are healthy at 31.63% and 43.98%, respectively, indicating strong operational efficiency.

Balance Sheet

Very Positive

The company's balance sheet shows a solid equity base with an equity ratio of 90.16% in 2024, highlighting financial stability. The debt-to-equity ratio has significantly decreased to 0.07 from 0.16 in 2023, reflecting effective debt management. ROE improved to 20.94%, underscoring efficient use of equity to generate profits. The reduction in total debt and increase in stockholders' equity suggest a strengthening financial position.

Cash Flow

Positive

Ardmore Shipping's cash flow performance is robust, with a high operating cash flow to net income ratio of 1.20 in 2024, indicating strong cash generation capability. However, free cash flow declined by 26.08% from the previous year due to higher capital expenditures. The free cash flow to net income ratio remains healthy at 0.75, demonstrating good cash profitability despite the decrease in free cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
405.78M	395.98M	445.74M	192.48M	220.06M
	Gross Profit
156.33M	153.37M	195.53M	4.44M	99.05M
	EBIT
128.29M	155.95M	159.93M	-19.87M	18.88M
	EBITDA
178.39M	157.85M	187.83M	11.83M	50.63M
	Net Income Common Stockholders
133.01M	116.81M	138.45M	-36.52M	-6.05M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
46.99M	46.80M	50.57M	55.45M	58.37M
	Total Assets
704.80M	690.95M	723.86M	724.53M	752.01M
	Total Debt
44.24M	93.99M	184.62M	372.55M	409.71M
	Net Debt
-2.75M	47.18M	134.05M	317.10M	351.35M
	Total Liabilities
69.38M	116.51M	217.42M	395.53M	431.67M
	Stockholders Equity
635.42M	574.44M	506.44M	329.00M	320.33M
Cash Flow		Free Cash Flow
99.22M	134.22M	120.40M	-5.52M	25.19M
	Operating Cash Flow
160.25M	159.61M	124.21M	-2.89M	46.09M
	Investing Cash Flow
-32.97M	-26.84M	35.41M	1.63M	-20.99M
	Financing Cash Flow
-127.09M	-136.54M	-164.50M	-1.66M	-18.46M

Ardmore Shipping Technical Analysis

Technical Analysis Sentiment

Negative

Last Price9.29

Price Trends

50DMA

10.08

Negative

100DMA

10.89

Negative

200DMA

14.19

Negative

Market Momentum

MACD

-0.10

Negative

RSI

42.48

Neutral

STOCH

23.90

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASC, the sentiment is Negative. The current price of 9.29 is below the 20-day moving average (MA) of 9.68, below the 50-day MA of 10.08, and below the 200-day MA of 14.19, indicating a bearish trend. The MACD of -0.10 indicates Negative momentum. The RSI at 42.48 is Neutral, neither overbought nor oversold. The STOCH value of 23.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ASC.

Ardmore Shipping Risk Analysis

Ardmore Shipping disclosed 67 risk factors in its most recent earnings report. Ardmore Shipping reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ardmore Shipping Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PANL	73 Outperform	$282.20M	6.85	7.69%	9.30%	7.46%	8.41%
ASC	71 Outperform	$375.83M	3.04	21.87%	10.23%	46.10%	―
SB	70 Outperform	$366.34M	4.19	11.99%	5.75%	8.17%	35.92%
KNOP	70 Neutral	$219.06M	30.16	2.31%	1.66%	9.59%	―
GNK	69 Neutral	$566.64M	7.54	8.30%	11.07%	10.21%	―
NAT	68 Neutral	$535.73M	11.35	8.91%	13.44%	-2.37%	-52.77%
Sector *	62 Neutral	$7.62B	13.01	3.19%	3.32%	3.77%	-14.28%

* Industrials Sector Average

Performance Comparison

ASC

Ardmore Shipping

9.29

-5.60

-37.61%

GNK

Genco Shipping

13.19

-5.83

-30.65%

NAT

Nordic American Tanker

2.53

-0.93

-26.88%

Safe Bulkers

3.48

-1.04

-23.01%

KNOP

KNOT Offshore Partners

6.27

1.29

25.90%

PANL

Pangaea Logistics Solutions

4.30

-1.94

-31.09%

Ardmore Shipping Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: -18.79% | Next Earnings Date: May 13, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Ardmore Shipping Corporation's strong financial performance, operational efficiencies, and strategic initiatives, despite facing market volatility and geopolitical challenges. The company's advancements in technology and strategic fleet management were notable positives.

Highlights

Strong Financial Performance

Ardmore Shipping Corporation reported adjusted earnings of $120 million or $2.84 per share for the full year, and $10.3 million or $0.25 per share for the fourth quarter.

Share Repurchase and Dividend

Repurchased 4% of shares during the fourth quarter at an average price of $11.49 and declared a quarterly cash dividend of $0.08 per share.

Operational Efficiency

Achieved low cash breakeven levels of $11,500 per day, positioning the company to benefit from various market scenarios.

Technological Advancements

Implemented AI and digitalization tools to enhance performance, achieving annual savings in excess of $5 million with returns over 100%.

Strategic Fleet Management

Executed a successful ship swap, selling an older vessel and acquiring a more efficient and versatile newer ship.

Lowlights

Market Volatility

Experienced downward volatility in rates during the fourth quarter, although they remain strong overall.

Geopolitical and Regulatory Challenges

Faced challenges due to geopolitical disruptions, sanctions, and the complex regulatory landscape.

Potential Impact of Tariffs

Consideration of potential shifts in trade patterns due to tariffs, which could impact demand and freight rates.

Company Guidance

During the call, Ardmore Shipping Corporation provided detailed guidance on several key financial metrics and market dynamics for 2024. The company reported adjusted earnings of $120 million, or $2.84 per share, for the full year, with a fourth-quarter contribution of $10.3 million, translating to $0.25 per share. Ardmore emphasized its efficient capital allocation strategy, highlighting the repurchase of 4% of its shares at an average price of $11.49 and the declaration of a quarterly cash dividend of $0.08 per share. The company's TCE performance remained robust, with MRs earning $22,700 per day in Q4 and $23,400 per day in Q1 2025 so far, while chemical tankers earned $21,400 per day in Q4 and $14,000 per day in Q1 2025. Ardmore also noted a significant reduction in cash breakeven levels to $11,500 per day, positioning it well for future market conditions. The company remains focused on leveraging market volatility, regulatory shifts, and geopolitical disruptions to drive earnings and shareholder value.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.