SBLK

We rate Star Bulk Carriers Corp. (SBLK) as a Buy with a composite score of 68.9/100 at a current price of $25.29. The stock scores above average across the majority of our six quantitative factors and ranks #129 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in momentum (78th percentile) and quality (76th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (26th percentile) and stability (57th percentile) tempers our overall conviction. We assign a Wide Moat rating (75/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Star Bulk Carriers Corp. holds a mid-tier position (#27 of 50) within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 68.9/100 places it at rank #129 in our full 7,333-stock universe. At $1.2B in market capitalization, Star Bulk Carriers Corp. is a small-cap player in the Transportation, Communications, Electric, Gas, And Sanitary Services space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 33% and momentum in the 78th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 26th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 95% (+39.9pp vs sector) narrow to operating margins of 30% (+12.7pp vs sector) and net margins of 24.1%, yielding a gross-to-net conversion rate of 25%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $25.29, Star Bulk Carriers Corp. appears undervalued relative to its fundamentals. Our value factor score of 73/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 8.9x (a 48% discount to the sector median of 16.9x), EV/EBITDA of 1.7x (discounted to peers), P/B of 1.2x, P/S of 0.6x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Low uncertainty rating to Star Bulk Carriers Corp.. The company exhibits strong financial stability with a beta of 0.79, and a stability factor in the 57th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 57th percentile with quality at the 76th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 95% provide a buffer against cost pressures; a 16.82% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate Star Bulk Carriers Corp.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 49.1%, a 16.82% dividend yield, best-in-class net margins of 24.1%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Star Bulk Carriers Corp. meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 16.82% dividend yield, and the combination of 29.8% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, Star Bulk Carriers Corp. receives a Buy rating with a composite score of 68.9/100 (rank #129 of 7,333). Our quantitative framework assigns a Wide Moat (75/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 62/100.

Our analysis supports a constructive view on Star Bulk Carriers Corp.. The combination of a wide competitive moat, low uncertainty, and exemplary capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.