Navigator Holdings Ltd. – Value Analysis (NYSE:NVGS) : December 21, 2017

Capitalcube gives Navigator Holdings Ltd. a score of 47.

Our analysis is based on comparing Navigator Holdings Ltd. with the following peers – Golar LNG Limited, Carnival plc Sponsored ADR, KNOT Offshore Partners LP and Global Ship Lease, Inc. Class A (GLNG-US, CUK-US, KNOP-US and GSL-US).

Investment Outlook

Navigator Holdings Ltd. has a fundamental score of 47 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • Taking peer performance into consideration, relative performance over the last month and last year is around the peer median.
  • It’s current Price/Book of 0.58 is about median in its peer group.
  • The market expects NVGS-US to grow faster than its peers and for the company to improve its current ROE.
  • NVGS-US‘s relative asset efficiency and net profit margins are both around the median level.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • NVGS-US‘s return on assets currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • The company’s relatively low gross margin and median pre-tax margin suggest operations may be constrained on pricing versus peers.
  • Compared with the peers chosen, NVGS-US has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company’s level of capital investment suggests it might be under-investing in a business with above median returns.
  • NVGS-US seems too levered to raise additional debt.

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Leverage & Liquidity

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

  • With debt at a relatively high 61.89% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 57.87%), and relatively tight interest coverage level of 1.36x, NVGS-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 4 peers for the company have an outstanding debt balance.

NVGS-US has moved to a Limited Flexibility from a relatively high leverage profile at the recent year-end.

  • NVGS-US‘s interest coverage is its lowest relative to the last five years and compares to a high of 4.58x in 2015.
  • Though its interest coverage decreased to 1.36x from 2.10x (in 2016), its peer median remained relatively stable during this period at 1.79x.
  • NVGS-US‘s debt-EV is similar to last year’s high of 61.89%, which compares to a low of 29.87% in 2012.
  • Compared to 2016, debt-EV has remained relatively stable for both the company (61.89%) and the peer median (57.87%).

Access the detailed analysis for Navigator Holdings Ltd.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Golar LNG Limited 52.83 0.41 -1.4 -1.24
Carnival plc Sponsored ADR N/A 0.18 16.17 N/A
KNOT Offshore Partners LP 53.85 0.48 3.06 11.86
Global Ship Lease, Inc. Class A 93.7 1.96 1.79 18.61
Navigator Holdings Ltd. 61.89 1 1.36 7.06
Peer Median 57.87 0.48 1.79 9.46
Best In Class 52.83 1.96 16.17 18.61

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Company Profile

Navigator Holdings Ltd. owns and operates a fleet of handysize liquefied gas carriers. It also provides international seaborne transportation and regional distribution services of liquefied petroleum gas, petrochemical gases and ammonia for energy companies, industrial users and commodity traders. The company currently operates twenty one handysize gas carriers, with three additional vessels and seven confirmed new buildings, making a total fleet of thirty owned handysize gas carriers and one chartered-in vessel. Navigator Holdings was founded in 1997 and is headquartered in London, the United Kingdom.


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