Company Overview
Cool Company Ltd. operates as a specialized operator within the Energy sector, specifically focusing on the Oil & Gas Midstream industry by acquiring, owning, and chartering liquefied natural gas carriers. As of December 31, 2024, the company's fleet consisted of twelve LNGCs, a diverse portfolio that includes seven modern tri-fuel diesel electric vessels, two modern 2-stroke and two TFDE vessels, one 2-stroke MEGA LNG carrier, and managed assets. The enterprise currently supports a workforce of 94 employees while maintaining a market capitalization of $511.23M and generating annual revenue of $327.76M. These financial metrics position the company as a mid-sized entity within the global LNG shipping landscape, where a market cap of this magnitude suggests a significant operational footprint relative to its specific niche in the midstream infrastructure.
Financial Health
The company reported a trailing twelve-month revenue of $327.76M, with a corresponding net income of $59.13M and an EBITDA of $217.87M, highlighting a substantial gap between operational earnings and net profit that reflects significant tax, interest, and other non-operating costs. Free cash flow stands at -$244,986,256, indicating that despite strong EBITDA, capital expenditures and working capital requirements are currently exceeding cash generated from operations, which limits immediate financial flexibility for internal reinvestment or aggressive expansion. Profitability is characterized by a gross margin of 73.1%, an operating margin of 39.4%, and a profit margin of 18.0%, where the high gross margin suggests efficient vessel utilization while the drop to a net profit margin of 18.0% underscores the heavy burden of fixed costs and debt servicing. The balance sheet presents a leveraged profile with $1.37B in total debt against $117.65M in cash, resulting in a debt-to-equity ratio of 173.79 that signals a capital structure heavily reliant on borrowed funds. Short-term liquidity appears constrained by a current ratio of 0.85, meaning current assets are insufficient to cover current liabilities without relying on external financing or asset sales. Return on equity is calculated at 7.6% while return on assets sits at 4.1%, revealing that the high leverage is necessary to generate shareholder returns but also exposes the firm to significant risk if asset values decline.
Valuation Assessment
Valuation metrics indicate a trailing P/E ratio of 9.21 compared to a forward P/E of 10.07, suggesting that the market expects earnings to grow slightly in the future to justify the marginally higher multiple. The price-to-book ratio is recorded at 0.65, which implies that the market values the company's equity at a discount relative to its book value, a common characteristic for capital-intensive industries like midstream energy. Alternative valuation measures include a price-to-sales ratio of 1.56 and an EV/EBITDA of 8.11, providing context that the firm trades at a premium to its sales figure while maintaining a multiple on earnings before interest, taxes, and depreciation that is moderate for the sector. The stock has traded within a 52-week range bounded by a high of $10.00 and a low of $4.51, establishing a volatility envelope within which the current share price must be evaluated against historical extremes. The beta value of -0.69 indicates a unique inverse correlation with the broader market, suggesting that the stock price moves in the opposite direction of general market trends, offering a distinct risk profile for portfolio diversification.
Growth & Income
Growth dynamics are defined by a revenue growth rate of 5.2% year-over-year contrasted with a significantly higher earnings growth rate of 35.2%, indicating that profitability is expanding at a pace much faster than top-line sales due to operational leverage or margin expansion. As a dividend payer, the company offers a dividend yield of 6.2% supported by a payout ratio of 53.3%, which suggests the dividend is funded by a portion of earnings but requires careful monitoring given the negative free cash flow and high debt levels. The elevated earnings growth rate of 35.2% relative to the 5.2% revenue growth implies that the company is successfully converting incremental sales into profit, likely through fixed cost absorption in its shipping operations. The overall profile combines moderate revenue expansion with aggressive earnings growth and a high-yield dividend, presenting a complex income and growth scenario where capital efficiency must be balanced against debt obligations.