Toro Corp. acquires, owns, charters, and operates oceangoing tanker vessels and provides seaborne transportation services for crude oil and refined petroleum products worldwide. The company operates through Aframax/LR2 tanker and Handysize tanker segments. It operates a fleet of eight tanker vessels with an aggregate cargo carrying capacity of 0.7 million dwt. The company was incorporated in 2022 and is headquartered in Limassol, Cyprus.

Cyprus

Toro Corp.

Industrials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 30ppts over six months and grown 9ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported very strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 129.8% in the last 12 months, up from 49.9% in FY22. 

Historically, TORO has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 171.5%, a growth from 44.6% in FY22. 

Another important profitability metric, return on assets (RoA), amounted to 21.7% in the last 12 months, a decrease from 35.5% in FY22. 

In the last 12 months, the return on capital employed (RoCE) declined to 22.3%, above the peers. 

Toro Corp. reported a return on equity (RoE) of 22.8% in the last 12 months, down from 40.8% in FY22. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.9 in the past several years. This ratio implies a good shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

TORO has very poor trading liquidity. It will take several trading days for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and remains mildly favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is low. We note resilient historical revenue growth, robust profitability, solid return on capital, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to excessive margin volatility, poor working capital management.

In highly turbulent market conditions, TORO is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, TORO is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

From both historical and forecast perspectives, the stock is considerably underpriced compared to similar stocks. Specifically, the stock is 'cheap' on P/E, underpriced on P/FC. 

Toro Corp.

$ 1.91

4

Toro Corp.

$ 1.91

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 1.91

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