KNOT Offshore Partners LP Common Units representing Limited Partner Interests (KNOP)

FairStock Score: 40/100 — MIXED

Key Financials

Strengths

• Generates $156 million in annual free cash flow (43.5% yield on market cap)

Concerns

• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Altman Z-Score of 0.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

KNOT Offshore Partners LP Common Units representing Limited Partner Interests is a micro-cap energy company valued at $359 million. Revenue stands at $364 million, though the company is currently unprofitable. From a quality standpoint, KNOT shows distressed Altman Z-Score of 0.1 warrants caution and modest 4% ROE. On valuation, the stock is reasonably priced at 21.7x earnings, with a modest 20% margin of safety vs Graham Number. Growth dynamics show revenue growing at 5.7% and profit growth of -126.9%. The 2.0% dividend yield adds an income component for patient holders. Our composite FairStock Score of 40/100 reflects below-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $156 million in annual free cash flow (43.5% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Without a clear path to profitability, continued cash burn forces either dilutive equity raises or debt accumulation that destroys shareholder value. 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