Himalaya Shipping Ltd. Common Shares (HSHP)

FairStock Score: 62/100 — STEADY

Key Financials

Strengths

• Generates $44 million in annual free cash flow (7.0% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 11.2% above cost of capital
• Healthy net profit margin of 10.2% showing consistent profitability
• Revenue growth of 42.2% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($5) with negative 148% margin of safety—limited downside protection
• High leverage at 4.26x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.8 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Himalaya Shipping Ltd. Common Shares is a micro-cap industrials company valued at $634 million. The business generates $132 million in annual revenue with a 10.2% net margin and $44 million in free cash flow. From a quality standpoint, Himalaya shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and distressed Altman Z-Score of 0.8 warrants caution. On valuation, the stock is trading at a premium 35.2x earnings, with trades far above its Graham Number ($5) with no margin of safety. Growth dynamics show revenue growing at 42.2% and profit growth of 1223.5%. The 5.3% dividend yield adds an income component for patient holders. Our composite FairStock Score of 62/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Himalaya's 42% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. With $44 million in annual free cash flow (7.0% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 35x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer