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Zim Integrated Shipping Services Ltd. (ZIM)
:ZIM
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ZIM Integrated Shipping Services
(NYSE:ZIM)
74Outperform
Positive Factors
Guidance
ZIM has raised its FY24 adj. EBITDA guidance to $2.6-3.0bn and its adj. EBIT guidance to $1.45-1.85bn based on higher freight rates expectations.
Market Share
ZIM continued to gain market share in 2Q.
Negative Factors
Market Conditions
An oversupplied ocean market could worsen if the Red Sea reopens.
ZIM Integrated Shipping Services (ZIM) vs. S&P 500 (SPY)
Market Cap
$2.44B
Dividend Yield19.25%
Average Volume (3M)5.23M
Price to Earnings (P/E)1.7
Beta (1Y)1.16
Revenue Growth21.47%
EPS GrowthN/A
CountryUS
Employees4,778
SectorIndustrials
Sector Strength72
IndustryTransportation
Share Statistics
EPS (TTM)11.94
Shares Outstanding120,354,980
10 Day Avg. Volume5,761,629
30 Day Avg. Volume5,227,898
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.20
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
$20.50Price Target Upside0.94% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering2
ZIM Integrated Shipping Services Business Overview & Revenue Model
Company DescriptionZIM Integrated Shipping Services (ZIM) is a leading global container shipping company. Founded in 1945, ZIM operates a fleet of modern vessels and provides comprehensive shipping solutions across the globe. The company offers a range of services including container shipping, logistics, and supply chain management, serving a diverse set of industries including automotive, electronics, and retail.
How the Company Makes MoneyZIM makes money primarily through its container shipping services, which involve the transportation of goods across international waters. The company charges fees for the shipment of containers, which vary based on factors such as distance, volume, and the type of goods being transported. Additionally, ZIM generates revenue from its logistics and supply chain management services, offering value-added solutions such as freight forwarding, warehousing, and customs brokerage. Strategic partnerships and alliances with other shipping companies and logistics providers also play a significant role in enhancing ZIM's market reach and operational efficiency, contributing to its earnings.
ZIM Integrated Shipping Services Financial Statement Overview
Summary
ZIM demonstrates a strong recovery in the TTM period with improved profitability and cash flow generation, indicating resilience and effective cost management. However, historical volatility in financial performance and high leverage levels introduce potential risks. Continued focus on maintaining profitability and managing debt levels will be crucial for sustaining growth.Income Statement
The company shows a strong rebound in the TTM period with a significant gross and net profit margin. Gross profit margin stands at 27.47%, and net profit margin is 19.26% for TTM, indicating effective cost management and profitability improvements. However, past volatility in revenue and profit, particularly the losses in 2023, indicates potential risks and fluctuations.72
Positive
Balance Sheet
ZIM's balance sheet displays moderate leverage with a debt-to-equity ratio of 1.49 in TTM. The equity ratio is 35.63%, suggesting a reasonable level of financial stability. However, the decline in stockholders' equity over the years is a concern. Return on equity stands at 36.61% for TTM, indicating strong shareholder value creation in the recent period.65
Positive
Cash Flow
The cash flow is robust with a Free Cash Flow growth rate of 160.20% in TTM. The operating cash flow to net income ratio is 1.76, and free cash flow to net income ratio is 1.64, underscoring strong cash generation relative to earnings. Cash flow management appears strong, although past inconsistencies in cash flow generation warrant attention.78
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.47B | 5.16B | 12.56B | 10.73B | 3.99B | 3.30B | Gross Profit |
| 2.05B | -2.21B | 6.43B | 6.07B | 865.02M | 263.04M | EBIT |
| 1.78B | -2.51B | 6.14B | 5.82B | 722.05M | 121.15M | EBITDA |
| 2.94B | -955.10M | 7.65B | 6.60B | 1.00B | 386.89M | Net Income Common Stockholders |
| 1.44B | -2.70B | 4.62B | 4.64B | 518.00M | -13.04M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 203.70M | 1.80B | 3.26B | 3.69B | 629.39M | 241.83M | Total Assets |
| 1.96B | 8.35B | 11.63B | 9.84B | 2.82B | 1.93B | Total Debt |
| 1.36B | 5.01B | 4.35B | 3.32B | 1.83B | 1.54B | Net Debt |
| 1.18B | 4.09B | 3.33B | 1.78B | 1.26B | 1.36B | Total Liabilities |
| 2.21B | 5.89B | 5.73B | 5.24B | 2.55B | 2.18B | Stockholders Equity |
| -256.77M | 2.45B | 5.89B | 4.59B | 267.27M | -257.67M |
| Cash Flow | Free Cash Flow | ||||
| 2.35B | 904.30M | 5.76B | 4.97B | 838.10M | 354.48M | Operating Cash Flow |
| 2.53B | 1.02B | 6.11B | 5.97B | 880.80M | 370.63M | Investing Cash Flow |
| 537.73M | 1.78B | -1.65B | -3.34B | -35.20M | 38.03M | Financing Cash Flow |
| -2.44B | -2.89B | -4.98B | -1.65B | -460.40M | -411.40M |
ZIM Integrated Shipping Services Technical Analysis
Positive
20.31
Price Trends
19.48
Positive
19.60
Positive
17.78
Positive
Market Momentum
0.29
Positive
52.91
Neutral
47.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZIM, the sentiment is Positive. The current price of 20.31 is below the 20-day moving average (MA) of 20.42, above the 50-day MA of 19.48, and above the 200-day MA of 17.78, indicating a neutral trend. The MACD of 0.29 indicates Positive momentum. The RSI at 52.91 is Neutral, neither overbought nor oversold. The STOCH value of 47.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZIM.
ZIM Integrated Shipping Services Risk Analysis
ZIM Integrated Shipping Services disclosed 55 risk factors in its most recent earnings report. ZIM Integrated Shipping Services 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
ZIM Integrated Shipping Services Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
85 Outperform | $803.58M | 2.40 | 26.71% | 7.57% | 7.05% | 6.23% | |
74 Outperform | $2.44B | 1.73 | 44.28% | 19.25% | 21.47% | ― | |
74 Outperform | $1.50B | 3.07 | 15.68% | 4.13% | 6.00% | -9.89% | |
74 Outperform | $1.17B | 8.93 | 12.05% | 12.24% | 19.49% | 39.16% | |
72 Outperform | $4.31B | 9.29 | 18.86% | 1.03% | 10.57% | 68.82% | |
64 Neutral | $1.22B | 4.17 | 13.07% | 4.53% | 37.10% | -17.36% | |
62 Neutral | $8.16B | 12.85 | 0.64% | 3.04% | 3.83% | -15.83% |
* Industrials Sector Average
Performance Comparison
ZIM
ZIM Integrated Shipping Services
20.31
11.15
121.72%
CMRE
Costamare
10.16
-0.94
-8.47%
DAC
Danaos
80.37
11.31
16.38%
GSL
Global Ship Lease
23.38
4.64
24.76%
SFL
SFL Corporation
8.52
-3.84
-31.07%
MATX
Matson
131.12
22.93
21.19%
ZIM Integrated Shipping Services Earnings Call Summary
Earnings Call Date: Nov 20, 2024 | % Change Since: -9.09% | Next Earnings Date: Mar 12, 2025
Earnings Call Sentiment Positive
ZIM reported exceptionally strong financial metrics and volume growth, supported by its fleet transformation and strategic initiatives. Despite potential oversupply and geopolitical uncertainties, the company remains confident in its agile business model and future profitability. The decision to raise guidance and declare a special dividend reflects a positive outlook.Highlights
Record-Breaking Financial Performance
ZIM reported a net income of $1.1 billion and revenue of $2.8 billion in Q3 2024. Adjusted EBITDA was $1.5 billion, with a margin of 55%, and adjusted EBIT was $1.2 billion, with a margin of 45%.
Strong Volume Growth
Carried volume reached 970,000 TEU, a record high for ZIM, marking a 12% year-over-year growth, significantly outpacing the global container market growth of 5%.
Fleet Modernization and Efficiency
ZIM's fleet transformation is on track, with 42 of the 46 newbuild vessels delivered, including LNG-powered ships. By the end of 2024, 40% of the fleet's capacity will be LNG-powered, improving cost efficiency.
Increased Full-Year Guidance
ZIM raised its full-year 2024 guidance, expecting adjusted EBITDA between $3.3 billion and $3.6 billion, and adjusted EBIT between $2.15 billion and $2.45 billion.
Special Dividend Declaration
ZIM declared a special dividend of $100 million on top of a regular dividend of $340 million, with a total per share distribution of $3.65.
Strategic Collaborations
Operational collaborations with MSC and Hapag-Lloyd were established, enhancing network efficiency and customer offerings.
Lowlights
Potential Oversupply in Future Years
Concerns about supply growth outpacing demand in '25 and '26, with newbuild deliveries stretching out to 2027 and beyond.
Geopolitical and Economic Uncertainties
Potential geopolitical issues, including the Red Sea crisis and the impact of U.S. elections, could affect market conditions.
Impairment Concerns
Questions about not reversing the impairment taken in 2023, as market conditions have improved.
Company Guidance
During the ZIM Integrated Shipping Services Q3 2024 earnings call, the company provided an optimistic outlook and revised their full-year guidance upward. They now anticipate a full-year adjusted EBITDA between $3.3 billion to $3.6 billion and adjusted EBIT between $2.15 billion to $2.45 billion. The third quarter was marked by a record net income of $1.1 billion, with revenue reaching $2.8 billion, driven by a carried volume of 970,000 TEU, which represented a 12% year-over-year increase. The company also declared a special dividend of $100 million, alongside the regular dividend of $340 million, amounting to a total distribution of $3.65 per share. ZIM emphasized their strategic fleet renewal program, which includes the integration of LNG-powered vessels, enhancing operational efficiency and competitive positioning. Despite potential market volatility in the coming years, ZIM remains confident in its strong financial position and fleet transformation to navigate future challenges.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.