CTRM's Variable Earnings make Forecasting their Stock Price Difficult

Today we are looking at Castor Maritime Inc. (NASDAQ: CTRM), to determine if the CTRM stock is a good buy. We will look at CTRM financial ratios, analyst ratings, and valuation to determine a CTRM stock forecast and price. What does CTRM Do? Castor Maritime Inc. provides shipping services worldwide. The company operates through three segments: Dry Bulk, Aframax/LR2 Tanker, and Handysize Tanker. It offers seaborne transportation services for dry bulk cargo; commodities, such as iron ore, coal, soybeans, etc.; and crude oil and refined petroleum products. Laying out Informations for a CTRM Stock Forecast Who are Castor Maritime Inc.'s Competitors? In order to undergo a comparable analysis (to determine CTRM stocks value), we need to first outline who CTRM's competitors are. These competitors need to be publicly listed, have valid financial metrics/multiples, operate in a similar manner to CTRM, and have a market cap similar to CTRM (if possible). By keeping this in mind, I found the following list of companies to be some of CTRM stocks closest competitors: CVLG, MESA, EAGL, AMSC, HUNT, HAYN, POWL, YELL, TRNS, CBAT CTRM Stock News and Information Castor Maritime Inc.'s Earnings are Highly Variable CTRM Earnings (Yearly): CTRM Revenues: In FY 2021, CTRM experienced a yearly increase in revenues of $119.56M (or 957.44%) resulting in a total revenue figure of $132.05M. CTRM Cost of Revenues: In FY 2021, CTRM experienced a yearly increase in their cost of revenues of $56.58M (569.38%), resulting in a total revenue figure of $66.52M. Since the increase (of 569.38%), in CTRM's cost of revenue was lesser (by -388.06%) than the increase (of 957.44%) in CTRM's revenues, we should expect that CTRM experienced an increase (roughly 388.06%) in their FY gross profits. CTRM Gross Profit: In FY 2021, CTRM experienced a yearly increase in their gross profit of $62.98M (or 2,469%) resulting in a total gross profit of $65.53M. This decrease is consistent with our conclusion from the comparison of revenues and cost of revenues between FY and FY. CTRM EBITDA: In FY 2021, CTRM experienced a yearly increase in their EBITDA of $68.71M (or 5,707%) resulting in a total EBITDA of $69.91M. This increase (of 5,707%) stems from the fact that CTRM experienced a increase in their gross profits of 2,469% (as we saw in the previous bullet point). CTRM Net Income: In FY 2021, CTRM experienced a yearly increase in their net income of $54,024,020  resulting in a total net income of $52.27M. CTRM EPS: As a result of CTRM's increase in net income of $54M, CTRM's EPS also increased (by $0.78) from $-0.3 in FY 2020 to $0.48 in FY 2021 Overall, CTRM experienced exponential growth in 2021 due to favourable eceonomic impacts/events that covid had on the shipping industry. I is hard to gauge the significance and sustainability of this ffinancial report as the figures grew so much. As a resukt of this we can look to their Q1 2022 earnings report for a better indication of this. CTRM Earnings (Quarterly): CTRM Revenues: In Q1 2022, CTRM experienced a quarterly decrease in revenues of $-5.37M (or -8.95%) resulting in a total revenue figure of $54.64M. CTRM Cost of Revenues: In Q1 2022, CTRM experienced a quarterly increase in their cost of revenues of $3.56M (13.65%), resulting in a total revenue figure of $29.68M. Since the increase (of 13.65%), in CTRM's cost of revenue was greater (by 22.59%) than the decrease (of -8.95%) in CTRM's revenues, we should expect that CTRM experienced an decrease (roughly -22.59%) in their Q1 gross profits. CTRM Gross Profit: In Q1 2022, CTRM experienced a quarterly decrease in their gross profit of $-8.93M (or -26.35%) resulting in a total gross profit of $24.96M. This decrease is consistent with our conclusion from the comparison of revenues and cost of revenues between Q1 and Q4. CTRM EBITDA: In Q1 2022, CTRM experienced a quarterly decrease in their EBITDA of $-8.5M (or -23.52%) resulting in a total EBITDA of $27.63M. This decrease (of -23.52%) stems from the fact that CTRM experienced a decrease in their gross profits of -26.35% (as we saw in the previous bullet point). CTRM Net Income: In Q1 2022, CTRM experienced a quarterly decrease in their net income of $-9.23M (or -31.61%) resulting in a total net income of $19.98M. CTRM EPS: As a result of CTRM's decrease in net income of $-9.23M, CTRM's EPS also increased (by $0.03) from $0.18 in Q4 2021 to $0.21 in Q1 2022 Overall, it seems as though CTRM had a poor financial performanceas many of their financial metrics shrunk, most notably their net income (by $-9.23M), revenues (by 9%), gross profit (by 26%), and EBITDA (by 23%). However, despite most of their metrics shrinking, CTRM was able to grow their EPS by $0.03 (over 16%) which is rather impressive.  The earnings from 2021 have proven to be unsustainable as we have seen a broad decrease in CTRMs financials. However, it will be interesting to see how much farther down CTRM's fianancials might plunge before they start to level off, and potentially start to increase again. No Share Dilution for CTRM Holders As part of their Q1 2022 earnings release, CTRM stated that they currently have 94.61M Shares Outstanding (weighted average), which is up 0 shares (from 94.61M shares outstanding in Q4 2021). Furthermore, CTRM stock has up to 0 of shares that they can issue (thereby diluting CTRM's stock). Thiis is great news for investrors as they can expect no/minimal dilution for the CTRM stock moving forward. Shipping Container Industry Outlook: The global shipping container market reached a value of US$ 9.5 Billion in 2021. Looking forward, IMARC Group expects the market to reach US$ 15.3 Billion by 2027, exhibiting a CAGR of 8.12% during 2022-2027. CTRM Stock Forecast Using a Comparable Analysis to Determine a CTRM Stock Forecast Price to Book (P/B): CTRM's current P/B ratio is 0.38, compared to the average P/B ratio of CTRM's peers being 0.87. This implies that CTRM is undervalued and their share price should change by a factor of 126.3% to be at fair value (based on CTRM's P/B compared to the P/B of their peers). Price to Equity (P/E): CTRM stock P/E ratio is currently 2.33, compared to the average P/E ratio of CTRM's peers being 10.75. This implies that CTRM is undervalued and their share price should change by a factor of 360.61% to be at fair value (based on CTRM's P/E compared to the P/E of their peers). Overall, CTRM stock is undervalued and needs to experience a change in stock price of (an average of) 243.45% to be considered “at fair value”. Do I think that CTRM has the potential to increase in price by 240%? Well, no I don't... But do I think that CTRM is undervalued? Absolutely. Is CTRM a good stock to buy right now? Due to the fact our CTRM stock forecast implies that CTRM is undervalued and needs to experience a price change of 243.45% in order to be at their fair value, CTRM has exxperienced no dilution in recent time, and the global shipping industry outlook is good, I have concluded the following: CTRM is undervalued, however, due to their surge over the past couple of years it is had to tell by how much. Thi is a resutl of thei highl variable earnings. I think that it would be safe to take a position into CTRM and look for a 20%+ return before exiting.

back

CTRM's Variable Earnings make Forecasting their Stock Price Difficult

Jun 22, 2022

bullish

general Analysis

[5 min Read]

blog post cover photo

Photo by: Venti Views

Today we are looking at Castor Maritime Inc. (NASDAQ: CTRM), to determine if the CTRM stock is a good buy. We will look at CTRM financial ratios, analyst ratings, and valuation to determine a CTRM stock forecast and price.

What does CTRM Do?

Castor Maritime Inc. provides shipping services worldwide. The company operates through three segments: Dry Bulk, Aframax/LR2 Tanker, and Handysize Tanker. It offers seaborne transportation services for dry bulk cargo; commodities, such as iron ore, coal, soybeans, etc.; and crude oil and refined petroleum products.

Laying out Informations for a CTRM Stock Forecast

Who are Castor Maritime Inc.'s Competitors?

In order to undergo a comparable analysis (to determine CTRM stocks value), we need to first outline who CTRM's competitors are.

These competitors need to be publicly listed, have valid financial metrics/multiples, operate in a similar manner to CTRM, and have a market cap similar to CTRM (if possible).

By keeping this in mind, I found the following list of companies to be some of CTRM stocks closest competitors:

CVLG, MESA, EAGL, AMSC, HUNT, HAYN, POWL, YELL, TRNS, CBAT

CTRM Stock News and Information

Castor Maritime Inc.'s Earnings are Highly Variable

CTRM Earnings (Yearly):

  • CTRM Revenues: In FY 2021, CTRM experienced a yearly increase in revenues of $119.56M (or 957.44%) resulting in a total revenue figure of $132.05M.
  • CTRM Cost of Revenues: In FY 2021, CTRM experienced a yearly increase in their cost of revenues of $56.58M (569.38%), resulting in a total revenue figure of $66.52M. Since the increase (of 569.38%), in CTRM's cost of revenue was lesser (by -388.06%) than the increase (of 957.44%) in CTRM's revenues, we should expect that CTRM experienced an increase (roughly 388.06%) in their FY gross profits.
  • CTRM Gross Profit: In FY 2021, CTRM experienced a yearly increase in their gross profit of $62.98M (or 2,469%) resulting in a total gross profit of $65.53M. This decrease is consistent with our conclusion from the comparison of revenues and cost of revenues between FY and FY.
  • CTRM EBITDA: In FY 2021, CTRM experienced a yearly increase in their EBITDA of $68.71M (or 5,707%) resulting in a total EBITDA of $69.91M. This increase (of 5,707%) stems from the fact that CTRM experienced a increase in their gross profits of 2,469% (as we saw in the previous bullet point).
  • CTRM Net Income: In FY 2021, CTRM experienced a yearly increase in their net income of $54,024,020 resulting in a total net income of $52.27M.
  • CTRM EPS: As a result of CTRM's increase in net income of $54M, CTRM's EPS also increased (by $0.78) from $-0.3 in FY 2020 to $0.48 in FY 2021

Overall, CTRM experienced exponential growth in 2021 due to favourable eceonomic impacts/events that covid had on the shipping industry. I is hard to gauge the significance and sustainability of this ffinancial report as the figures grew so much. As a resukt of this we can look to their Q1 2022 earnings report for a better indication of this.

CTRM Earnings (Quarterly):

  • CTRM Revenues: In Q1 2022, CTRM experienced a quarterly decrease in revenues of $-5.37M (or -8.95%) resulting in a total revenue figure of $54.64M.
  • CTRM Cost of Revenues: In Q1 2022, CTRM experienced a quarterly increase in their cost of revenues of $3.56M (13.65%), resulting in a total revenue figure of $29.68M. Since the increase (of 13.65%), in CTRM's cost of revenue was greater (by 22.59%) than the decrease (of -8.95%) in CTRM's revenues, we should expect that CTRM experienced an decrease (roughly -22.59%) in their Q1 gross profits.
  • CTRM Gross Profit: In Q1 2022, CTRM experienced a quarterly decrease in their gross profit of $-8.93M (or -26.35%) resulting in a total gross profit of $24.96M. This decrease is consistent with our conclusion from the comparison of revenues and cost of revenues between Q1 and Q4.
  • CTRM EBITDA: In Q1 2022, CTRM experienced a quarterly decrease in their EBITDA of $-8.5M (or -23.52%) resulting in a total EBITDA of $27.63M. This decrease (of -23.52%) stems from the fact that CTRM experienced a decrease in their gross profits of -26.35% (as we saw in the previous bullet point).
  • CTRM Net Income: In Q1 2022, CTRM experienced a quarterly decrease in their net income of $-9.23M (or -31.61%) resulting in a total net income of $19.98M.
  • CTRM EPS: As a result of CTRM's decrease in net income of $-9.23M, CTRM's EPS also increased (by $0.03) from $0.18 in Q4 2021 to $0.21 in Q1 2022

Overall, it seems as though CTRM had a poor financial performanceas many of their financial metrics shrunk, most notably their net income (by $-9.23M), revenues (by 9%), gross profit (by 26%), and EBITDA (by 23%). However, despite most of their metrics shrinking, CTRM was able to grow their EPS by $0.03 (over 16%) which is rather impressive.

The earnings from 2021 have proven to be unsustainable as we have seen a broad decrease in CTRMs financials. However, it will be interesting to see how much farther down CTRM's fianancials might plunge before they start to level off, and potentially start to increase again.

No Share Dilution for CTRM Holders

As part of their Q1 2022 earnings release, CTRM stated that they currently have 94.61M Shares Outstanding (weighted average), which is up 0 shares (from 94.61M shares outstanding in Q4 2021). Furthermore, CTRM stock has up to 0 of shares that they can issue (thereby diluting CTRM's stock). Thiis is great news for investrors as they can expect no/minimal dilution for the CTRM stock moving forward.

Shipping Container Industry Outlook:

The global shipping container market reached a value of US$ 9.5 Billion in 2021. Looking forward, IMARC Group expects the market to reach US$ 15.3 Billion by 2027, exhibiting a CAGR of 8.12% during 2022-2027.

CTRM Stock Forecast

Using a Comparable Analysis to Determine a CTRM Stock Forecast

  1. Price to Book (P/B): CTRM's current P/B ratio is 0.38, compared to the average P/B ratio of CTRM's peers being 0.87. This implies that CTRM is undervalued and their share price should change by a factor of 126.3% to be at fair value (based on CTRM's P/B compared to the P/B of their peers).
  2. Price to Equity (P/E): CTRM stock P/E ratio is currently 2.33, compared to the average P/E ratio of CTRM's peers being 10.75. This implies that CTRM is undervalued and their share price should change by a factor of 360.61% to be at fair value (based on CTRM's P/E compared to the P/E of their peers).

Overall, CTRM stock is undervalued and needs to experience a change in stock price of (an average of) 243.45% to be considered “at fair value”. Do I think that CTRM has the potential to increase in price by 240%? Well, no I don't... But do I think that CTRM is undervalued? Absolutely.

Is CTRM a good stock to buy right now?

Due to the fact our CTRM stock forecast implies that CTRM is undervalued and needs to experience a price change of 243.45% in order to be at their fair value, CTRM has exxperienced no dilution in recent time, and the global shipping industry outlook is good, I have concluded the following:

CTRM is undervalued, however, due to their surge over the past couple of years it is had to tell by how much. Thi is a resutl of thei highl variable earnings. I think that it would be safe to take a position into CTRM and look for a 20%+ return before exiting.

page loading card

CTRM

Castor Maritime Inc.

1.62

-0.03
-1.82%

Return

-
Position Return %
0.00
Position Return
1.50
Price When Posted

Metrics

1.65
Target Price
8/ 10
Confidence
1-2 Months
Timeframe
catalyst icon
Earnings Release
catalyst icon
News
catalyst icon
SEC
Filing
catalyst icon
Sentiment
catalyst icon
Other Catalyst

Access the latest tools and discussion channels with an account

reddit-sentiment

Reddit Sentiment
Analysis

portfolio-balancer

Portfolio Balancer
with brokerages

sec-dashboard

SEC Dashboard
with NLP

aiodd-ad
next