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ZIM

ZIM Integrated Shipping Services NYSE:ZIM Stock Report

Last Price

US$51.46

Market Cap

US$6.2b

7D

-3.1%

1Y

14.3%

Updated

18 Aug, 2022

Data

Company Financials +
ZIM fundamental analysis
Snowflake Score
Valuation5/6
Future Growth1/6
Past Performance5/6
Financial Health6/6
Dividends4/6

ZIM Stock Overview

ZIM Integrated Shipping Services Ltd., together with its subsidiaries, provides container shipping and related services in Israel and internationally.

ZIM Integrated Shipping Services Ltd. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for ZIM Integrated Shipping Services
Historical stock prices
Current Share PriceUS$51.46
52 Week HighUS$91.23
52 Week LowUS$40.67
Beta0
1 Month Change2.45%
3 Month Change-20.46%
1 Year Change14.31%
3 Year Changen/a
5 Year Changen/a
Change since IPO347.48%

Recent News & Updates

Aug 16

ZIM Integrated Shipping: This Will Change Everything

ZIM Integrated Shipping is about to release its Q2 earnings report. Most of ZIM Integrated's competitors reported stellar results thanks to higher shipping rates, which are still significantly above the pre-pandemic levels. Considering that ZIM trades at extremely cheap multiples, a possible positive report has all the chances to lift its share price higher. ZIM Integrated Shipping Services Ltd. (ZIM) is about to report its Q2 earnings results that should help its stock to gain more traction after weeks of declines. Due to the ongoing supply chain disruptions, we continue to witness major port congestions that continue to keep the shipping rates above the pre-pandemic levels. Thanks to this, a large part of container shipping companies reported stellar Q2 earnings results in recent weeks, and ZIM is expected to do the same thing on Wednesday when its own report comes out. Considering that the company already trades at a significant bargain with a price-to-sales ratio of less than 1x, a possible successful earnings report could push the shares significantly higher, especially if the management once again increases its full-year guidance, as it has already done so earlier this year. As we all await the Q2 numbers to come out, this article will highlight all the major developments that happened to the shipping industry in recent months in order to build a bullish thesis in regards to ZIM. ZIM Integrated: A Tech-Savvy Shipping Enterprise Worth Looking At Initially founded prior to the end of WW2, ZIM specializes in container shipping services around the globe. The company relies on a chartered-in capacity strategy, which gives it flexibility in planning its operations as it can adjust its available capacity to meet the demand without capital-heavy investments. While the company operates a total of 137 vessels, it owns only a significant minority of those vessels, as the majority of them are chartered from charter owners and later used for container shipping services. After years of struggling to recover from the Great Recession, only in the last few years did the company begin a successful turnaround that lasts to this day. As of now, ~45% of its volume goes through the Trans-Pacific route, while the rest is going through Intra-Asia, Atlantic, and other sea corridors. Overall, ZIM has around 475 000 TEUs of operating capacity, out of which around 415 000 TEUs are already on the order book. One of the biggest advantages of ZIM is that it heavily relies on big data and business intelligence to increase its overall efficiency. Just recently, the company has increased its investment into the developer of a disruptive scanning technology Sodoyo and at the same time made a $5.5 million investment in another startup Hoopo to improve the optimization of its container fleet. By being a tech-savvy enterprise, ZIM has been able to make its operations more efficient, which helped it to greatly increase its average revenue per TEU in the last couple of years and start earning more per TEU than its competitors in the last few quarters. The Average Revenue Per TEU By Quarter 2020-2021 (ZIM) In Q1, the company didn’t disappoint shareholders as well and reported stellar earnings results. Its revenue during the period increased by 113.8% Y/Y to $3.72 billion, while its adjusted EBITDA was up 209% Y/Y to $2.53 billion. Its net income during the period has also increased by 190% Y/Y and stood at $1.7 billion. What’s also important to note is that the carried volume increased only by 5% Y/Y to 859k TEU, but ZIM was able to report a significant improvement in financials thanks to the rise in shipping rates that helped it to have an average freight rate per TEU of $3848, up 100% Y/Y. Q2 Numbers Should Lift ZIM Stock Higher There are several reasons to be optimistic about ZIM’s upcoming Q2 earnings report. First of all, the rapid revival of trade after the initial months of the pandemic lead to the supply chain disruptions, which last to this day and have been behind the recent growth of the shipping industry due to high demand and tight supply on the market. Even now, port congestion is still an issue, as in late July there were reports of a record backlog of vessels waiting to enter American ports. What’s also important to mention is that in its Q1 presentation, ZIM noted that these issues may extend into 2023, making it possible for the company to continue to benefit from the current situation. On top of that, even as China reopens, we’re unlikely to see the overcapacity of vessels in the market due to new tough environmental shipping regulations that will come into effect on January 1 and create additional hurdles for the owners of relatively old vessels. To hedge itself against the downside of new rules, ZIM has been actively chartering more LNG-fueled container ships and in the next two years, it expects 1/3 of its operated fleet to be LNG-fueled. Thanks to this, ZIM should be able to minimize the possible impacts of those regulations. We should also remember that even though freight rates have been on a decline since the beginning of the year, they’re still significantly high today when compared to previous historical periods. The composite index shows that a spot rate for the 40ft container is around $6430, while in 2019 before the pandemic it was below $2000. This shows that the shipping companies are able to continue to generate exceptionally great returns even after the latest decline when compared to the pre-pandemic periods. Spot Freight Rates By Major Route (Drewry) In addition to those tailwinds, another reason why there’s a high chance that ZIM will report great numbers tomorrow is the fact that most of its competitors already reported exceptional Q2 results. Earlier this month, Matson (MATX) reported strong earnings by showing a double-digit revenue growth rate and noting that there was a strong demand from China after the reopening. In addition, Maersk also didn’t disappoint its investors, as it increased its FY22 EBITDA forecast for the year by an additional $7 billion to $37 billion after reporting record earnings for Q2. On top of that, the South Korean HMM recently revealed that its net profit in the first half of the year increased by 1560% Y/Y, while German’s Hapag-Lloyd is now on track to become more profitable than Volkswagen (VWAGY) after reporting its own results. Those results clearly show that the shipping industry continues to benefit from the current supply chain disruptions and that’s why ZIM shouldn’t disappoint its investors tomorrow as well. What’s also important to note is that even if we experience a further decline in spot rates in the following quarters, shipping companies are still more than likely to continue to generate record profits in comparison to the pre-pandemic times beyond 2022. Forecast Carrier Industry EBIT Profit/Loss And EBIT Margins (Drewry) Back in May, ZIM has already increased its full-year guidance and now expects its adjusted EBITDA to be between $7.8 billion and $8.2 billion, while its adjusted EBIT is expected to be between $6.3 billion and $6.7 billion. Considering the successful results of its peers, ZIM has all the chances not only to meet those full-year targets but also to increase them as well. What’s also important to note is that ZIM trades at a forward P/E of 1x, while its price-to-sales ratio is less than 1x. Considering those multiples, we could conclude that the company’s stock is a bargain at the current levels. On top of that, ZIM also pays a hefty dividend, as its TTM dividend yield is ~44%, which makes its stock an even more attractive investment. In addition, the current consensus price target for ZIM’s stock is $71.04 per share, which represents a nearly 40% upside from the current levels and signals that the stock has more room for growth going forward. ZIM's Consensus Price Target (Seeking Alpha) Risks One of the biggest downsides of ZIM is that it operates in a cyclical industry, which already reached its peak a few months ago and is currently on a downward slope. The good thing is that as we’ve seen the company is likely to continue to generate great returns in comparison to the pre-pandemic levels beyond 2022, but there’s a risk that several headwinds could disrupt the current forecasts and negatively affect the share price in the following quarters. First of all, despite the better CPI numbers, we could still see the Fed acting more aggressively when it comes to increasing interest rates to tackle inflation, which could lead to a worse than expected decline in economic activity. This will undoubtedly have a negative effect on the whole shipping industry.

Aug 09
If EPS Growth Is Important To You, ZIM Integrated Shipping Services (NYSE:ZIM) Presents An Opportunity

If EPS Growth Is Important To You, ZIM Integrated Shipping Services (NYSE:ZIM) Presents An Opportunity

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Aug 01

ZIM invests ~$5M in scanning technology developer Sodyo

ZIM Integrated Shipping Services (NYSE:ZIM) has made a ~$5M additional investment in scanning technology developer, Sodyo. The fresh funding came as part of a Series B financing round, proceeds from which will help further develop Sodyo's technology and expand its implementation. The capital will also support ZIMARK's, a Sodyo-ZIM joint venture that is dedicated to applying the firm's scanning technology to the logistics sector and supply chain processes. Speaking of the investment, Eli Glickman, President and CEO of ZIM, said: "We are excited to continue supporting Sodyo and ZIMARK and believe they hold potentially significant value for ZIM. Furthermore, we will continue to leverage our position within the startup ecosystem in Israel to identify other attractive innovative technologies and companies, complementary to ZIM's core business, that can serve as growth engines for ZIM." ZIM is scheduled to report its FQ2 results on Aug. 19, 2022. Analysts project EPS of $13.22 and revenue of $3.70B for the quarter.

Shareholder Returns

ZIMUS ShippingUS Market
7D-3.1%-2.7%1.4%
1Y14.3%12.4%-8.4%

Return vs Industry: ZIM exceeded the US Shipping industry which returned 3.7% over the past year.

Return vs Market: ZIM exceeded the US Market which returned -9% over the past year.

Price Volatility

Is ZIM's price volatile compared to industry and market?
ZIM volatility
ZIM Average Weekly Movement9.4%
Shipping Industry Average Movement8.2%
Market Average Movement7.6%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.1%

Stable Share Price: ZIM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: ZIM's weekly volatility (9%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19454,427Eli Glickmanhttps://www.zim.com

ZIM Integrated Shipping Services Ltd., together with its subsidiaries, provides container shipping and related services in Israel and internationally. It provides door-to-door and port-to-port transportation services for various types of customers, including end-users, consolidators, and freight forwarders. The company also offers ZIMonitor, a premium reefer cargo tracking service.

ZIM Integrated Shipping Services Ltd. Fundamentals Summary

How do ZIM Integrated Shipping Services's earnings and revenue compare to its market cap?
ZIM fundamental statistics
Market CapUS$6.18b
Earnings (TTM)US$6.21b
Revenue (TTM)US$13.75b

1.0x

P/E Ratio

0.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ZIM income statement (TTM)
RevenueUS$13.75b
Cost of RevenueUS$4.42b
Gross ProfitUS$9.33b
Other ExpensesUS$3.12b
EarningsUS$6.21b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)51.71
Gross Margin67.87%
Net Profit Margin45.16%
Debt/Equity Ratio4.7%

How did ZIM perform over the long term?

See historical performance and comparison

Dividends

37.9%

Current Dividend Yield

52%

Payout Ratio