DORIAN LPG LTD. (LPG): what the price assumes

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/LPG

Headline

Field	Value
Ticker	LPG
Company	DORIAN LPG LTD.
Current price	$45.63/sh

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Operating margin (value-band context)	12.2%
Operating margin today	43.6%
Margin compression (value-band)	-31.4pp
Multiple paid	11x operating income

The operating-margin figure is value-band context at year 9: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 7.6% cost of capital with 4% terminal growth over a 5-year stage.

Reconcile: at the x-ray's 9.3% required return this reads ~-1.6%/yr; the models below use their own rates.

How unusual the bet is: within-range

Reference	Value
vs own history	-0.08σ
cohort percentile (of 222 peers)	8
implied end-window share	0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	0.87x	5	justifies
Earnings	1.09x	5	expensive
Relative	0.61x	5	justifies
Growth	0.46x	4	justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.7%); the inversion above states its own rate.

Per-Model Detail (n=19)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$305.27	0.15x	yes	FCF base $0.2B, growth 25% (input: historical growth), terminal g 4.0%, WACC 7.7%, 7yr projection
DCF Exit Multiple	Growth	$98.84	0.46x	yes	Exit EV/EBITDA: 5.6x / 8.6x / 11.6x (bear / base = today's held flat / bull), 7yr
Relative Valuation	Relative	$91.96	0.50x	yes	P/E 20x (static sector reference · 2026-04), scenarios: 16.0x / 20.0x / 24.0x (bear / base = reference held flat / bull), EV/EBITDA 13x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	$99.09	0.46x	yes	Stage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess Return	Asset	$49.15	0.93x	yes	BV/sh $26.74, ROE (TTM) 17.0%, ke 9.3%
Two-Stage Excess Return	Asset	$65.77	0.69x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$69.37	0.66x	yes	Rev $0.5B, growth 30% (input: historical growth; tapered), Terminal P/S: 3.2x / 4.0x / 4.8x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair Value	Relative	$54.60	0.84x	yes	EPS $4.55, growth 2% (input: historical EPS growth), PEG=5.02 (Overvalued)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$35.76	1.28x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $0.19B × (1−21%) / WACC 7.7% → EPV (no growth)
Residual Income	Asset	$66.15	0.69x	yes	BV $26.74 + 5yr PV of (ROE (TTM) 17.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham Number	Asset	$52.32	0.87x	yes	√(22.5 × EPS $4.55 × BVPS $26.74) — Graham's conservative floor
EV/EBITDA Relative	Relative	$74.72	0.61x	yes	EBITDA $0.28B × sector EV/EBITDA 13.0x
FCF Yield	Earnings	$42.02	1.09x	yes	FCF $210.1M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	$39.22	1.16x	yes	SBC-adj FCF $0.20B (FCF $0.21B − SBC $0.01B) capitalized at Kₑ
Ben Graham Formula	Earnings	$146.81	0.31x	yes	EPS $4.55 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$14.22	3.21x	yes	BV $26.74 × (ROIC 4.1% / WACC 7.7%)
P/Sales Sector	Relative	$22.61	2.02x	yes	Revenue $0.48B × sector P/S 2.0x
PEG Fair Value	Relative	$170.63	0.27x	yes	EPS $4.55 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings Yield	Earnings	$49.19	0.93x	yes	EPS $4.55 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net debt	$223.0m
Net debt / NOPAT (after-tax)	1.34x
Net debt / operating income (pre-tax)	1.06x
Share count CAGR (dilution)	1.6%
Burning cash	no

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Dorian is a modern-fleet VLGC owner earning extraordinary spot rates, with a March 2026 time-charter equivalent near $65,600 per day and a trailing operating margin above 40%, backed by light leverage of roughly one year's operating income.
• The biggest risk is the cycle turning: a heavy 2026 to 2027 newbuild order book could add tonnage that compresses charter rates, and the company is a price-taker with no control over competitor fleet additions.
• Watch the spot rate and the dividend cadence: the four irregular dividends totaling $104.7 million in fiscal 2026 track the rate environment and are designed to be cut when it normalizes.

Bull Case

Dorian sits at the mature, cash-rich phase of a deeply cyclical business, and right now the cycle is paying. The company moves liquefied petroleum gas across oceans in very large gas carriers, and when Middle Eastern supply disruptions tightened the market this year, daily rates spiked. The Helios pool earned a time-charter equivalent of about $65,600 per day on spot voyages in March 2026, and the operating margin on the trailing business ran above 40%. Fiscal 2026 brought roughly $481.5 million of revenue and about $193.7 million of net income. For a shipping company, that is the part of the cycle where the fleet earns multiples of its operating cost, and management has been routing the surplus straight to shareholders.

The balance sheet is what separates this from a leveraged charter play. Net debt is about $223 million against trailing operating income of roughly $210 million, a little over one year of operating profit, which is conservative for an asset-heavy shipper. Book value per share is around $26.74 and trailing return on equity near 17%. That combination, a hard-asset base plus genuine returns on it, is why the value methods anchor the stock: book value plus profitability and the conservative Graham floor both land above the current price, not below it. The cyclicality is real, but it is a cyclicality backed by steel hulls that hold residual value rather than by a narrative that could evaporate.

Capital return is the explicit strategy, not an afterthought. Across fiscal 2026 the company paid four irregular dividends totaling $104.7 million, including a $1.00-per-share declaration in May 2026 worth $42.8 million. It also sold an older VLGC for about $256 million, refreshing the fleet while pulling forward cash at strong asset values. The competitive position is concentrated by nature: the 10-K notes that of roughly 115 owners in the worldwide VLGC fleet, "the top ten owners possessing 41%" of capacity, and Dorian operates among that top tier alongside BW LPG, NYK Line, and Petredec. In a market where supply is the swing variable, owning modern tonnage in a concentrated fleet is the position you want when rates run.

Bear Case

The variable that has the most leverage over Dorian's thesis is one the company does not control: the daily charter rate, and that rate is set by the global balance of VLGC supply against LPG export volume. The current price embeds the present rate environment, and present rates are extraordinary, lifted by Middle Eastern supply disruptions that are geopolitical rather than structural. When those disruptions ease, the spot market normalizes, and the same operating leverage that produced a 40%-plus margin on the way up works just as hard on the way down. The 10-K is explicit that demand can be undercut by "an increase in available tonnage due to Very Large Ethane Carriers transporting LPG" and by "greater than anticipated levels of LPG" inventory dynamics. This is a price-taker in a commodity freight market, and the buyer at today's level is implicitly betting the up-cycle persists.

The supply side is where the cycle usually turns against owners. A heavy newbuild order book for 2026 and 2027 is the standard mechanism: high rates pull forward vessel orders, the new capacity arrives a year or two later, and the added tonnage compresses rates exactly when demand has not kept pace. One analyst cited that order book directly in moving the stock to Hold despite the strong recent run. Dorian cannot influence how many ships its competitors build, and a fleet delivered into a softer LPG export market would push time-charter equivalents well below the levels that support the current dividend pace.

The shareholder returns themselves carry the cyclical signature. The dividends are described as irregular for a reason: they track the rate environment, which means they are designed to be cut when the cycle turns, not defended. The four payouts in fiscal 2026 totaled $104.7 million, but that flow is a function of the rate spike, not a contractual obligation. The asset-based methods provide a floor, since the hulls retain value and net debt is modest, but the gap between the spot-driven earnings power priced in today and the through-cycle average is the bear's real point. The recent VLGC sale at $256 million is itself a tell that management views current asset values as a good moment to take chips off the table.

Valuation

The unusual feature of Dorian is that nearly every method says the stock is cheap, which is the inverse of the typical premium-growth setup. At the current price the market is paying only about 10x company-wide operating income, a multiple so low that the price sits below what even a modest annual decline in operating profit would warrant. The asset-based, earnings-power, relative-multiple, and growth-based families all read the price as supported or low. This is a value and asset-supported name, not a growth bet, and the inversion frames the bet plainly: the buyer is not paying for acceleration, only for the business to avoid a steep, sustained collapse in profitability.

The range across methods is wide, which is itself the cyclical story. Book value plus profitability lands near $49 to $66 depending on how much excess return one credits, the conservative Graham floor sits around $52, and the relative-multiple lens reaches the high $70s. The cash-flow methods spread enormously, from a zero-growth capitalization of free cash flow near $42 to projection-based figures far higher, and that spread is the warning label: discounting today's spot-rate cash flow forward assumes a rate environment that history says mean-reverts. The honest read is that the conservative, asset-anchored methods are the trustworthy ones here. They cluster around and above the price, which is why the price is supported, while the growth-projected outputs should be discounted as the products of an exceptional rate year.

Solvency keeps the downside contained. Net debt of about $223 million against trailing operating income near $210 million is roughly one year of operating profit, light leverage for an owner of expensive vessels. The company is not burning cash, the fleet sale pulled forward $256 million, and the modern tonnage retains resale value. The result is a stock where the floor is hard, set by steel and a clean balance sheet, and the uncertainty is entirely about how far above that floor the spot market keeps the earnings power. The decisive question for this name is not solvency or asset value, both of which are sound, but how long the current rate cycle runs.

Catalysts

Fiscal 2026, capped by the fourth quarter reported in May, was a record run driven by geopolitics. Middle Eastern supply disruptions sent VLGC rates surging, and Dorian reported quarterly revenue of $153.3 million against a $130.6 million consensus, with adjusted earnings of $1.89 per diluted share beating the $1.48 analyst estimate. Full-year revenue reached about $481.5 million and net income roughly $193.7 million, and the board declared a $1.00-per-share irregular dividend worth $42.8 million payable in late May.

Two capital actions frame the year ahead. The company sold an older VLGC for about $256 million, refreshing the fleet and monetizing strong asset values, a move that shifted the investment narrative toward fleet quality and capital return. Analyst sentiment is split and has cooled even as rates stayed high: of six covering analysts, three rate the stock Buy and one Sell, with a median target of $38.50, and at least one downgrade to Hold cited the heavy 2026 to 2027 order book as the reason to fade the strength. The next catalyst is the trajectory of spot rates as the supply disruptions resolve, since that single variable drives both the earnings and the dividend that the market is watching.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• NVGS (NAVIGATOR HOLDINGS LTD.)
• FY2025 20-F: …the vessels, and lead to the termination of any related charters that may be entered into prior to their delivery; • Our growth depends on our ability to expand relationships with existing customers and obtain new customers, for which we will face substantial competition; • The marine transportation industry is…
• FY2025 20-F: …purchase contracts. As a result, if delivery of a vessel is materially delayed, it could adversely affect our business, financial condition and operating results. Our growth depends on our ability to expand relationships with existing customers and obtain new customers, for which we will face substantial competition.…
• FLNG (FLEX LNG Ltd.)
• FY2025 20-F: …and depressed freight rates, may severely affect the financial condition of charterers, and their ability to make charter payments, which could result in a material increase in the credit and counterparty risks to which we are exposed to and our ability to re-charter our vessels at competitive rates. If any of our…
• FY2025 20-F: …segment: vessel operations. The vessel operations segment relates to revenue generated from chartering of vessels to customers. Although separate vessel financial information is available, the CODM internally evaluates the performance of the Company as a whole and not on the basis of each vessel or charters. In…
• GLNG (Golar LNG Limited)
• FY2025 20-F: …rises in colder weather and declines in warmer weather. Seasonal demand during the summer months has increased in certain markets due to energy requirements for air conditioning and, in some regions, reduced availability of hydropower generation. Certain of our tolling arrangements include both fixed capacity…
• FY2025 20-F: …condition. ◦ Risks related to our industry ■ Our results of operations and financial condition depend on demand for natural gas, LNG and FLNGs; ■ Our operations face several industry risks and events which could cause damage or loss of a vessel, loss of life or environmental consequences that could harm our…
• INSW (International Seaways, Inc.)
• FY2025 10-K: …and dynamics that have an impact on the Company's financial position and results of operations. ​ ● Results from Vessel Operations. This section provides an analysis of our results of operations presented on a business segment basis. In addition, a brief description of significant transactions and other items that…
• FY2025 10-K: "Business and Segment Reporting," to the Company's consolidated financial statements as set forth in Item 8, "Financial Statements and Supplementary Data," for additional information on the Company's segments, including reconciliations of (i) time charter equivalent revenues to shipping revenues and (ii) adjusted…
• FRO (Frontline plc)
• FY2025 20-F: …between the larger refinery centers around the world, being the Gulf of Mexico, Middle East, Rotterdam and Singapore. We are committed to providing quality transportation services to all of our customers and to developing and maintaining long-term relationships with the major charterers of tankers. Increasing global…
• FY2025 20-F: …we wish to acquire additional vessels, the cost of acquisition may increase and this could adversely affect our business, results of operations, cash flow and financial condition. We may be unable to successfully compete with other vessel operators for charters, which could adversely affect our results of operations…
• GSL (Global Ship Lease, Inc.)
• FY2025 20-F: …presented for each category of participating common shares under the two-class method. (w) Risks Associated with Concentration The Company is exposed to certain concentration risks that may adversely affect the Company's financial position in the near term: (i) The Company derives its revenue from liner companies…
• FY2025 20-F: 4 Table of Contents We will face substantial competition in expanding our business from a number of companies. Many of these competitors may have greater financial resources and a lower cost of capital than us, may operate larger fleets, may have been established for longer, and may be able to offer better charter…
• TDW (TIDEWATER INC)
• FY2025 10-K: …a material adverse effect on our current and future business, financial position, results of operations, and cash flows. Our customer base has undergone consolidation and additional consolidation is possible. Consolidation is common in the oil and gas industry and likely to continue in the future. Consolidation…
• FY2025 10-K: …by global and/or regional conflicts, such as the current conflicts in Europe and the Middle East, competition to find and retain qualified offshore employees becomes more challenging, particularly with respect to certain technical and engineering positions, including marine officers, which in turn increases our costs…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Dorian LPG FY2026 results, May 2026 · Dorian LPG fleet-sale disclosure, 2026 · analyst note, 2026 · Dorian LPG Q4 FY2026 results, May 2026 · analyst notes, 2026