Eagle Bulk Shipping, Inc. – Value Analysis (NASDAQ:EGLE) : December 14, 2017

Capitalcube gives Eagle Bulk Shipping, Inc. a score of 28.

Our analysis is based on comparing Eagle Bulk Shipping, Inc. with the following peers – Navios Maritime Holdings Inc., Freeseas Inc., Seanergy Maritime Holdings Corp., Diana Shipping Inc. and Paragon Shipping Inc. Class A (NM-US, FREEF-US, SHIP-US, DSX-US and PRGNF-US).

Investment Outlook

Eagle Bulk Shipping, Inc. has a fundamental score of 28 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
  • It currently trades at a Price/Book ratio of (0.70).
  • EGLE-US‘s EBITDA-based price implies better than peer median growth.The market seems to expect a turnaround in the company’s current EBITDA-based return on equity.
  • EGLE-US has relatively low net profit margins while its asset efficiency is relatively high.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • EGLE-US‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • Company appears to give away relatively high gross margins to relatively high operating costs suggesting a differentiated product portfolio with low pre-tax margins relative to peers.
  • While EGLE-US‘s revenues growth has been around the peer median in recent years, the market seems to see faster growth ahead and gives its shares a higher than peer median Price/EBITDA ratio.
  • The company’s relatively low level of capital investment and below peer median returns on capital suggest that the company is in maintenance mode.
  • EGLE-US seems too levered to raise additional debt.

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Leverage & Liquidity

EGLE-US would seem to have a hard time raising additional debt.

  • With debt at a relatively high 55.54% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 87.74%), and relatively tight interest coverage level of -0.78x, EGLE-US would have a hard time raising much additional debt. The company has a Constrained profile in terms of its ability to take on further debt.
  • All 5 peers for the company have an outstanding debt balance.

EGLE-US has maintained its Limited Flexibility profile from the recent year-end.

  • EGLE-US‘s interest coverage is upward trending and is above (but within one standard deviation of) its five-year average interest coverage of -2.19x.
  • The increase in its interest coverage to -0.78x from -3.04x (in 2016) was also accompanied by an increase in its peer median during this period to -1.09x from -1.68x.
  • Interest coverage rose 1.66 points relative to peers (and is now higher than its peer median).
  • EGLE-US‘s debt-EV is less than (but within one standard deviation of) its five-year average debt-EV of 78.01%.
  • Though its debt-EV has remained relatively stable at 55.54% compared to 2016, its peer median has decreased to 87.74% from 90.66% during this period.
  • Relative to peers, debt-EV rose 2.92 percentage points.

Access the detailed analysis for Eagle Bulk Shipping, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Navios Maritime Holdings Inc. 88.87 1.02 -0.27 0.05
Freeseas Inc. 100.27 0.02 -1.87 -63.67
Seanergy Maritime Holdings Corp. 86.61 0.54 -0.38 -6.96
Diana Shipping Inc. 64.12 1.47 -2.57 -2.8
Paragon Shipping Inc. Class A 95.89 0.03 -1.39 -4.6
Eagle Bulk Shipping Inc 55.54 4.25 -0.78 1.74
Peer Median 87.74 0.78 -1.09 -3.7
Best In Class 55.54 4.25 -0.27 1.74

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Company Profile

Eagle Bulk Shipping, Inc. is a holding company, which engages in the ocean transportation of a broad range of dry bulk cargoes worldwide through the ownership, charter, and operation of dry bulk vessels. It operates Supramax and Handymax vessels that transport minor and major bulk cargoes, including iron ore, coal, grain, cement, and fertilizer. The company was founded by Sophocles N. Zoullas on March 23, 2005 and is headquartered in Stamford, CT.

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