Danaos (DAC) Margins Stay Near 47% Trailing Level Testing Bullish Profitability Narratives

Setting the scene with Danaos's latest numbers

Danaos (DAC) has just wrapped up FY 2025 with fourth quarter revenue of US$266.3 million and basic EPS of US$6.43, capping a year in which trailing twelve month revenue sat at about US$1.0 billion and EPS at US$26.83. The company has seen revenue move from US$258.2 million and EPS of US$4.72 in Q4 2024 to the latest Q4 2025 figures. Over the same period, trailing twelve month revenue slipped from US$1.01 billion and EPS from US$26.15 a year earlier, giving you a clear view of how the top line and EPS have tracked over time. With a trailing net margin of 47.4% versus 49.8% a year ago, investors are likely to focus on how these still wide margins interact with the share price reaction to this result.

See our full analysis for Danaos.

With the latest print on the table, the next step is to see how these numbers line up against the prevailing narratives around Danaos's growth, risk and long term earnings power, and where those stories might need a rethink.

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Margins stay high as profit trends ease

• On a trailing basis, Danaos earned US$494.6 million of net income on US$1.0b of revenue, for a 47.4% net margin compared with 49.8% a year earlier, alongside five year earnings that declined about 7% per year.
• Analysts' consensus view highlights strong contract coverage and financial resilience as support for margins, yet the figures here test that view:
  • Consensus points to current profit margins of 44.6% with an expectation of 41.7% in about three years. The latest trailing 47.4% margin and prior 49.8% level show that margin compression is already part of the story.
  • At the same time, trailing net income of about US$494.6 million versus the consensus expectation for US$381.3 million in a few years illustrates how the earnings base analysts are working from is higher than where they expect it to settle.

Over the past year, these margin and earnings trends give you a clear benchmark for judging how much room the consensus view has if conditions do not move exactly as expected. 📊 Read the full Danaos Consensus Narrative.

Revenue and EPS show a flattening pattern

• Across FY 2025, quarterly revenue stayed in a tight range around the US$253 million to US$266 million mark and EPS ranged between US$6.14 and US$7.14, while trailing twelve month EPS moved from US$29.14 in Q3 2024 to US$26.83 by Q4 2025.
• Consensus narrative leans on persistent demand for container shipping and strong backlog, and these steady figures put that into context:
  • Analysts in the provided data expect revenue to decline about 8.7% per year over the next three years, which contrasts with the recent pattern of revenue holding just above US$1.0b on a trailing basis.
  • The same view calls for earnings to decline roughly 19.3% per year from about US$459.5 million today to US$381.3 million, and the shift from trailing EPS of 29.14 to 26.83 already shows the direction of travel that this forecast is built around.

Cheap P/E meets falling earnings outlook

• At a share price of US$104.96, Danaos trades on a P/E of 3.9x compared with a peer average of 15x and a North American Shipping industry average of 7.5x. The stock also sits below a DCF fair value of about US$172.49.
• Consensus narrative that emphasizes financial strength and backlog support meets some clear pushback from the earnings trend in the numbers:
  • Trailing earnings declining about 7% per year over the last five years and forecasts for about a 19.3% annual earnings decline suggest the low 3.9x P/E and gap to the DCF fair value are being weighed against expectations of smaller profit pools ahead.
  • With analysts' price target guidance limited here to US$98.00 versus the current US$104.96 share price, the wide DCF fair value gap and low P/E are paired with a more muted target. This shows how valuation signals can differ depending on the method used.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Danaos on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

See the numbers your own way, then put that view to the test by turning it into a full narrative in just a few minutes, Do it your way

A great starting point for your Danaos research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

Danaos couples a low 3.9x P/E with trailing earnings that declined about 7% per year and analyst forecasts for roughly 19.3% annual earnings declines.

If you are wary of that shrinking earnings base and want ideas with stronger earnings support instead, check out our 51 high quality undervalued stocks that still look attractively priced today.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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