About Danaos Corp
Danaos Corporation, together with its subsidiaries, owns and operates containerships in Australia, Asia, Europe, and the United States. The company offers seaborne transportation services, such as chartering its vessels to liner companies. As of February 28, 2022, it had a fleet of 71 containerships aggregating 436,589 twenty-foot equivalent units in capacity.
The company was formerly known as Danaos Holdings Limited and changed its name to Danaos Corporation in October 2005. Danaos Corporation was founded in 1963 and is based in Piraeus, Greece.
DAC operates in the Transportation, Communications, Electric, Gas, And Sanitary Services | Transportation | approximately 1,720 employees | led by CEO John Coustas.
The $1.5B question: What happens when a company this good becomes this expensive?
In the constellation of American capitalism, certain companies shine brighter than others — not because they are inherently more valuable, but because they have positioned themselves at the nexus of forces that shape the economy. Danaos Corp is one such company.
At $1.5B in market capitalization, Danaos Corp (DAC) currently ranks #28 in our quantitative model, with a composite score of 79.4/100. That places it firmly in "Strong Buy" territory — our highest conviction rating.
But here's the thing about stocks priced for perfection: They leave no room for error.
The Numbers That Matter
Let's start with what's undeniably true. Our 6-factor model gives DAC the following scores:
| Factor | Score | Weight | Assessment |
|---|---|---|---|
| Quality | 88/100 | 30% | Exceptional |
| Value | 83/100 | 15% | Attractive |
| Momentum | 73/100 | 25% | Accelerating |
| Investment | 61/100 | 10% | Growing |
| Stability | 67/100 | 10% | Solid |
| Short Interest | 21/100 | 10% | High shorts |
The quality score of 88/100 is the headline here. It reflects profitability metrics that would make most CFOs weep with envy:
- ROE: 15.7%
- Net Margin: 49.8%
- Gross Margin: 1.0%
These aren't just good numbers. They're the kind of numbers that make DAC a "must-own" stock for institutional portfolios.
The Bull Case
"If you could design a business in a laboratory, it would look something like DAC."
The bull case writes itself:
- Quality is persistent. Academic research shows high-quality stocks outperform by 4-6% annually over long periods. DAC is quality defined.
- Momentum is real. With a momentum score of 73/100, the stock has been recognized by the market — and momentum tends to persist.
- The moat is deep. Companies with these margins don't lose them easily. The competitive position is entrenched.
The Bear Case
But here's what keeps value investors up at night:
- Valuation compression risk. At current levels, the stock is priced for continued perfection. Any stumble — a missed quarter, a competitive threat, a macro slowdown — could compress the multiple from 3.0x to the low 20s. That's a 20-30% decline without anything fundamentally "wrong."
- The crowded trade problem. When everyone owns a stock, who's left to buy? Momentum works until it doesn't.
- Mean reversion. Trees don't grow to the sky. At some point, growth decelerates.
The Valuation Framework
| Scenario | Assumption | Fair Value | Upside/Downside |
|---|---|---|---|
| Bear | Multiple compression to 20x | -20% | Downside |
| Base | Current trajectory continues | +10-15% | Modest upside |
| Bull | Momentum accelerates | +30-40% | Significant upside |
The risk-reward is ... fine. Not exceptional. Not terrible. Just fine.
The Bottom Line
Danaos Corp is exactly what it appears to be: a high-quality business with strong momentum trading at a premium price. Whether that's attractive depends entirely on what kind of investor you are.
For long-term, buy-and-hold investors, DAC is a core holding. For value investors or short-term traders, look elsewhere.
The company is priced for perfection — and in markets, as in life, perfection is a fragile thing.
⭐⭐⭐⭐⭐ Rating: 5-Star Strong Buy
Score: 79.4/100 | Rank: #28 of 3,571 stocks
Sector: Industrials
This analysis reflects the views of Blank Capital Research as of February 16, 2026. It is not investment advice. Past performance does not guarantee future results.