KNOT Offshore Partners (KNOP) AI Stock Analysis

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KNOT Offshore Partners

(NYSE:KNOP)

70Neutral

KNOT Offshore Partners has a stable financial outlook with solid revenue growth and strong cash flow. However, high leverage and low net profit margins are concerns. Technical indicators show strong momentum but caution is advised due to overbought signals. The valuation is a mixed bag with a high P/E ratio offset by a decent dividend yield. Positive earnings call sentiment, with operational efficiency and growth outlook, contributes favorably to the score, despite refinancing challenges.

KNOT Offshore Partners (KNOP) vs. S&P 500 (SPY)

Market Cap

$228.14M

Dividend Yield1.59%

Average Volume (3M)66.46K

Price to Earnings (P/E)31.4

Beta (1Y)-0.04

Revenue Growth9.59%

EPS GrowthN/A

CountryUS

Employees1

SectorIndustrials

Sector Strength91

IndustryMarine Shipping

Share Statistics

EPS (TTM)0.68

Shares Outstanding34,045,082

10 Day Avg. Volume49,141

30 Day Avg. Volume66,457

Financial Highlights & Ratios

PEG Ratio0.09

Price to Book (P/B)0.37

Price to Sales (P/S)0.00

P/FCF Ratio1.67

Enterprise Value/Market Cap4.67

Enterprise Value/Revenue0.88

Enterprise Value/Gross Profit11.27

Enterprise Value/Ebitda1.61

Forecast

1Y Price Target

$12.35

Price Target Upside89.13% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

KNOT Offshore Partners Business Overview & Revenue Model

Company DescriptionKNOT Offshore Partners LP owns, acquires, and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company provides loading, transportation, discharge, and storage of crude oil under time charters and bareboat charters. As of March 17, 2022, it operated a fleet of seventeen shuttle tankers. The company was founded in 2013 and is headquartered in Aberdeen, the United Kingdom.

How the Company Makes MoneyKNOT Offshore Partners generates revenue primarily through long-term time-charter contracts with major oil companies, which provide stable and predictable cash flows. These contracts typically last between three to five years, with options for extension, ensuring a steady income. The company benefits from its strategic partnerships with oil majors, securing a consistent demand for its services. KNOP's revenue model is significantly supported by the specialized nature of shuttle tankers, which are essential for transporting oil from offshore fields where pipeline infrastructure is not feasible. Additionally, the company focuses on maintaining high fleet utilization rates and operational efficiency, contributing to its profitability.

KNOT Offshore Partners Financial Statement Overview

Summary

KNOT Offshore Partners shows solid revenue growth and strong cash flow, with a stable financial outlook. However, high leverage and a low net profit margin highlight potential risks. The balance sheet stability is moderate, with opportunities to enhance equity and reduce debt.

Income Statement

Positive

KNOT Offshore Partners experienced a strong revenue growth of 7.55% in 2024. Gross profit margin improved significantly due to higher gross profit, reaching approximately 64.14%. However, net profit margin remains low at 4.5%, indicating potential efficiency issues despite overall revenue growth. The EBIT and EBITDA margins are robust at 23.33% and 61.91%, respectively, showing good operational health.

Balance Sheet

Neutral

The company exhibits a high debt-to-equity ratio of 1.48, suggesting significant leverage that could pose financial risks. However, the return on equity (ROE) is relatively low at 2.3%, indicating limited returns on equity investment. The equity ratio stands at 38.88%, showing moderate capital structure stability but with room for improvement in reducing leverage.

Cash Flow

Positive

Cash flow statements reveal healthy free cash flow growth of 5.69% in 2024. The operating cash flow to net income ratio is high at 9.75, indicating strong cash generation relative to net income. The free cash flow to net income ratio is exceptionally high at 9.68, reflecting effective cash management and operational efficiency.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
312.63M	290.72M	268.58M	281.13M	279.22M
	Gross Profit
200.51M	80.93M	72.32M	109.46M	128.47M
	EBIT
72.92M	25.14M	66.22M	101.99M	123.08M
	EBITDA
190.68M	144.64M	210.19M	183.00M	187.63M
	Net Income Common Stockholders
14.06M	-34.33M	58.67M	53.88M	65.22M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
66.93M	63.92M	47.58M	62.29M	52.58M
	Total Assets
1.57B	1.60B	1.73B	1.68B	1.78B
	Total Debt
906.00M	958.91M	1.06B	969.87M	1.03B
	Net Debt
839.07M	894.99M	1.01B	907.57M	979.25M
	Total Liabilities
961.03M	989.01M	1.08B	1.00B	1.08B
	Stockholders Equity
611.13M	607.48M	566.28M	599.12M	631.08M
Cash Flow		Free Cash Flow
136.20M	128.86M	97.63M	154.88M	168.90M
	Operating Cash Flow
137.15M	131.64M	100.94M	166.41M	169.24M
	Investing Cash Flow
-338.00K	-2.78M	-35.51M	-11.54M	-21.43M
	Financing Cash Flow
-133.32M	-112.51M	-79.97M	-145.15M	-139.26M

KNOT Offshore Partners Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.53

Price Trends

50DMA

6.34

Positive

100DMA

5.98

Positive

200DMA

6.19

Positive

Market Momentum

MACD

0.08

Positive

RSI

52.08

Neutral

STOCH

46.44

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KNOP, the sentiment is Positive. The current price of 6.53 is above the 20-day moving average (MA) of 6.50, above the 50-day MA of 6.34, and above the 200-day MA of 6.19, indicating a bullish trend. The MACD of 0.08 indicates Positive momentum. The RSI at 52.08 is Neutral, neither overbought nor oversold. The STOCH value of 46.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KNOP.

KNOT Offshore Partners Risk Analysis

KNOT Offshore Partners disclosed 68 risk factors in its most recent earnings report. KNOT Offshore Partners reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

KNOT Offshore Partners Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GASS	79 Outperform	$203.75M	2.79	11.88%	―	16.54%	42.56%
SHIP	71 Outperform	$128.34M	2.91	16.96%	10.34%	51.91%	2984.06%
PANL	71 Outperform	$287.42M	12.83	4.05%	9.13%	13.10%	-54.75%
KNOP	70 Neutral	$228.14M	31.41	2.31%	1.59%	9.59%	―
SB	68 Neutral	$394.76M	4.51	11.99%	5.33%	8.17%	35.92%
Sector *	64 Neutral	$4.43B	12.01	5.16%	249.23%	4.03%	-11.73%
DSX	55 Neutral	$175.97M	25.85	2.56%	11.18%	-12.93%	-86.34%

* Industrials Sector Average

Performance Comparison

KNOP

KNOT Offshore Partners

6.53

1.16

21.60%

DSX

Diana Shipping

1.52

-1.46

-48.99%

Safe Bulkers

3.75

-1.66

-30.68%

SHIP

Seanergy Maritime

6.14

-5.87

-48.88%

GASS

StealthGas

5.51

-1.86

-25.24%

PANL

Pangaea Logistics Solutions

4.38

-3.08

-41.29%

KNOT Offshore Partners Earnings Call Summary

Earnings Call Date:Mar 19, 2025

(Q4-2024)

% Change Since: 16.40%|

Next Earnings Date:May 21, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive sentiment overall, with strong financial performance, high operational efficiency, and a positive market outlook. However, there are challenges in refinancing debt and securing future charter coverage.

Q4-2024 Updates

Positive Updates

Strong Financial Performance in Q4 2024

Revenues were $91.3 million, operating income $34.7 million, net income $23.3 million, and adjusted EBITDA was $63.1 million. The partnership closed Q4 with $90 million in available liquidity.

High Utilization and Operational Efficiency

The company operated at 98.3% utilization with no impact from planned drydocking, indicating high operational efficiency.

Positive Market Outlook and Upcoming Projects

Significant growth is anticipated in production in fields serviced by shuttle tankers, especially in Brazil and the North Sea, with new FPSOs starting production.

Strong Contracted Revenue Position

The partnership has a strong contracted revenue position of $870 million at the end of Q4, with average contract durations of 2.4 years and additional charterers' options averaging 4.8 years.

Successful Vessel Swap

The swap of the Dan Sabia for Live Knutsen brought nearly 5 years of fixed or guaranteed future charter revenue, enhancing fleet growth without new funding.

Insurance Claim Settlement

Closeout of the insurance claim for Torill Knutsen totaling $6 million was completed, providing financial closure on this matter.

Negative Updates

Debt Facilities Moving to Current Liabilities

Four debt facilities moved from long-term to current liabilities due to upcoming maturities, requiring attention to refinancing.

Future Charter Coverage Concerns

While 94% of 2025 is covered by fixed charters, coverage drops to 75% for 2026, indicating the need for ongoing commercial efforts to secure future contracts.

Market Volatility Concerns

Acknowledgment of a more volatile market environment, which could impact debt renegotiations and future operations.

Company Guidance

In the KNOT Offshore Partners Fourth Quarter 2024 earnings call, CEO and CFO Derek Lowe provided comprehensive guidance, highlighting financial metrics and operational achievements. The company reported revenues of $91.3 million, operating income of $34.7 million, and a net income of $23.3 million for Q4, with an adjusted EBITDA of $63.1 million. KNOT Offshore concluded the quarter with $90 million in available liquidity, comprising $67 million in cash and cash equivalents and $23 million in undrawn credit facilities. The company achieved a 98.3% utilization rate, with no planned drydocking affecting vessel availability. A cash distribution of USD 0.026 per common unit was declared, paid in February. The partnership's contracted revenue stood at $870 million, with fixed contracts averaging 2.4 years in duration and charterers' options averaging an additional 4.8 years. Financial resilience was emphasized, with a debt paydown rate of $90 million annually and strategic asset swaps enhancing fleet growth without new funding. The outlook remains positive, with expected growth in shuttle tanker demand, driven by new FPSO deployments in Brazil and the North Sea.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.