Costamare (NYSE:CMRE) Margin Compression To 14.4% Puts Long Term Bull Case Under Scrutiny

Costamare (NYSE:CMRE) has put up another solid set of shipping numbers, with third quarter FY 2025 revenue of US$225.2 million and EPS of US$0.77, while trailing twelve month revenue sits at about US$2.1 billion with EPS of US$2.50. Over the past few reported periods, revenue has ranged from US$217.9 million to US$548.4 million a quarter and EPS from US$0.25 to US$0.90. This gives investors a clearer view of how earnings power has shifted across the cycle and where current margins are settling. In that context, the latest figures keep the focus firmly on how sustainable Costamare’s margin profile is and what that may mean for shareholders from here.

See our full analysis for Costamare.

With the headline results on the table, the next step is to see how these numbers line up with the most widely held market narratives around Costamare’s profitability, risk profile, and long term earnings power.

See what the community is saying about Costamare

Margins Compress From 33.3% To 14.4%

• Trailing net profit margin sits at 14.4% for the last 12 months, compared with 33.3% a year earlier, while trailing net income is US$299.96 million on US$2.1b of revenue.
• Critics highlight that tighter margins could clash with the bullish view that long term charters and high fleet employment keep earnings steady, because:
  • Near 100% revenue days fixed for 2025 and an average charter duration of 3.2 years are meant to support stable cash flows. However, the margin compression to 14.4% shows costs or pricing still matter a lot.
  • The expectation that modern, fuel efficient ships and leasing income support margins is partly challenged by the step down from 33.3% to 14.4%. This points to pressure even with those advantages in place.

If you want to see how bullish investors connect these margin trends with charter contracts and future earnings, check out the detailed bull case for Costamare: 🐂 Costamare Bull Case

P/E Of 6.9x Versus US Market 19.4x

• Costamare trades on a trailing P/E of 6.9x, below the US market P/E of 19.4x and the North American Shipping industry average of 7.7x, while still above the shipping peer group at 5.9x.
• What is interesting for the bearish narrative is how this relatively low P/E sits against concerns about leverage and margins, because:
  • Bears point to high debt and an unstable dividend record. Those issues sit alongside a 14.4% trailing net margin that has stepped down from 33.3%, which they see as a sign that earnings quality could be tested if shipping conditions soften.
  • At the same time, a 6.9x P/E is not the very cheapest in the peer set, so investors who share the cautious view may argue that the current valuation still needs to reflect the combination of higher leverage and thinner margins.

Skeptics watching that 6.9x P/E and thinner margins may want the full cautious angle on Costamare: 🐻 Costamare Bear Case

DCF Fair Value US$9.95 Versus Price US$17.15

• The provided DCF fair value in the dataset is US$9.95 a share, which sits well below the current share price of US$17.15 and the US$17.00 analyst price target reference, creating a clear gap between model value and market price.
• Analysts' consensus view flags long term contracted revenue of US$2.5b and expected earnings of about US$285.2 million by 2028, and the tension with today’s valuation shows up in two places:
  • The stock’s 6.9x trailing P/E looks low versus the US market at 19.4x, which some investors may interpret as supportive. However, the DCF fair value of US$9.95 indicates that at least one cash flow model in the data is more cautious than the current US$17.15 price.
  • Consensus uses a 6.1x P/E on those 2028 earnings to back into its US$17.00 target and assumes use of a 12.3% discount rate, so readers need to decide whether those profit margin and revenue assumptions line up with the current 14.4% trailing margin and the earnings trend of US$299.96 million over the last 12 months.

Next Steps

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

Curious whether this mix of margin pressure, valuation gaps and contracted revenue points to opportunity or risk for you personally? Take a moment to review the data, weigh what matters most for your portfolio, and then check out 1 key reward and 3 important warning signs to see the key risks and rewards side by side before you decide where you stand.

See What Else Is Out There

Costamare’s sharp margin compression from 33.3% to 14.4%, combined with leverage concerns and a DCF value below the share price, highlights valuation and risk pressure.

If that mix of thinner margins, higher debt and model caution has you on edge, compare it with 80 resilient stocks with low risk scores to quickly focus on companies scoring better on stability and downside protection.

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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