Breaking Down StealthGas Inc. (GASS) Financial Health: Key Insights for Investors

You're looking at StealthGas Inc. (GASS) and seeing a deep-value conundrum: a company with a trailing Price-to-Earnings (P/E) ratio sitting around 4.12, which screams cheap, but you need to know what's holding the multiple down. Honestly, the financial health is strong, but the market is nervous; the company posted a record second-quarter 2025 revenue of $47.2 million, plus they've been defintely disciplined, using strong cash flow to pay off all debt on their fully owned fleet. Here's the quick math: with first-half 2025 adjusted net income at $37.9 million, the core business is performing, but what this estimate hides is the market's concern about forward earnings, especially as the consensus revenue forecast for the upcoming Q3 2025 drops to around $39.2 million. We need to figure out if their secured 70% period coverage for 2025, which locks in over $165 million in contracted revenues, provides a solid enough floor to justify a buy. The fleet is debt-free; that's a huge advantage.

Revenue Analysis

You need to know where StealthGas Inc. (GASS) is actually making its money, and the 2025 data shows a clear picture: the vast majority of revenue is generated from its core business of international seaborne transportation for liquefied petroleum gas (LPG) producers and users. This is a pure marine shipping play, and the revenue stream is highly dependent on chartering rates and fleet utilization.

The company's primary revenue source is Time Charter Equivalent (TCE) revenue, which is a standard metric in shipping that translates the income from both fixed-rate period charters and variable spot market voyages into a daily rate. For the first six months of 2025 (H1 2025), StealthGas Inc. reported total revenues of $89.3 million, up from $83.4 million in the first half of 2024. That's a solid year-over-year (YoY) revenue growth of about 7.07% for the first half of the year, driven by both a larger average fleet and better market rates.

Here's the quick math on the near-term revenue mix:

• Period Charters (Fixed-Rate): This segment provides high earnings visibility, securing approximately 70% of the company's fleet days for the full 2025 fiscal year. This fixed coverage is expected to generate approximately $155 million in total contracted revenues for all future periods, giving you a strong baseline for future cash flow.
• Spot Market Activity: This is the variable component, which saw an increase in Q2 2025, leading to voyage expenses jumping to $4.4 million from $2.7 million in Q2 2024. While this increases costs, it also shows the company is actively taking advantage of the improving, though sometimes 'muted,' market conditions for better rates on shorter-term contracts.

Honestly, getting 70% of your fleet days locked in for the year is defintely a good risk management move in a volatile sector like marine shipping. You want that predictable revenue.

A look at the quarterly trend shows the momentum: Q2 2025 revenue hit a record high of $47.2 million, marking a 13% increase over Q2 2024. This growth is attributed to improved Time Charter Equivalent rates across various vessel sizes. This is a key indicator that the market is favoring their small liquefied petroleum gas (LPG) carriers-the main segment-which transport products like propane, butane, and propylene. The company also operates medium-range product carriers and an Aframax tanker, but the small LPG fleet is the engine of this revenue. For a deeper dive into the strategic direction of this engine, you should review the Mission Statement, Vision, & Core Values of StealthGas Inc. (GASS).

What this estimate hides, however, is the impact of a significant near-term risk. An incident involving the Eco Wizard vessel means it will be off-hire for repairs, and that vessel alone contributed roughly 8% of the H1 2025 revenue. This is a direct hit to the revenue stream that you must factor into your Q3 and Q4 projections, even with the strong contracted coverage.

Profitability Metrics

StealthGas Inc. (GASS) is demonstrating strong, though moderating, profitability in the 2025 fiscal year. The company's strategy of securing long-term charters and eliminating debt has kept margins high, but rising operational and voyage expenses are causing a noticeable contraction in net profit margin.

You need to look past the headline revenue growth; the real story is in the margin compression. StealthGas reported record-high quarterly revenues of $47.2 million in Q2 2025, a 13% year-over-year increase, but net income fell to $20.4 million from $25.8 million in the prior year period, which was boosted by a vessel sale. The quick math shows the net profit margin is still excellent, but the trend is a headwind.

Margin Trends and Operational Efficiency

The company's operational efficiency is best seen in its ability to translate revenue into operating and net income, despite external pressures. For Q2 2025, the Net Profit Margin landed at 43%, a significant drop from the 62% recorded in Q2 2024. This decrease was directly attributed to higher expenses, a key factor in the LPG shipping sector right now.

The Income from Operations (Operating Profit) for Q2 2025 reached a record $19.7 million. This translates to an Operating Margin of approximately 41.7% ($19.7M / $47.2M), which is a defintely strong performance for the industry. The Gross Profit margin remains high, though it is pressured by specific cost increases:

• Voyage expenses jumped to $4.4 million in Q2 2025, up from $2.7 million, due to increased spot market activity.
• Vessels' operating expenses increased 1.6% year-over-year to $12.7 million.
• Interest expenses plummeted by 78% to just $0.6 million due to the successful debt elimination strategy.

The massive reduction in interest expense is a huge tailwind, helping to cushion the impact of higher voyage and operating costs on the final net income number.

Industry Comparison and Near-Term Risk

StealthGas's Q2 2025 Net Margin of 43% is robust, especially when compared to peers in the broader shipping industry, which is facing structural overcapacity and geopolitical risks. For example, a major competitor, BW LPG, reported a Q2 2025 net profit of $35 million, but the overall LPG shipping sector is entering a period of recalibration and volatility.

The near-term risk is clear: market volatility is increasing. The company has secured 70% of its fleet days for 2025 under period charters, which generates approximately $155 million in contracted revenues, providing a solid floor for the year's earnings. However, the incident involving the Eco Wizard vessel, which was damaged in a Russian port and will be off-hire for repairs, temporarily impacts revenue, as it contributed roughly 8% of H1 2025 revenue.

Here is a snapshot of the Q2 2025 profitability metrics:

For a deeper dive into the balance sheet health, check out the full post: Breaking Down StealthGas Inc. (GASS) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

You're looking at StealthGas Inc. (GASS) to understand how they fund their operations, and the answer is simple: they've nearly eliminated debt, shifting their financial risk profile dramatically. The company's strategic, multi-year deleveraging effort culminated in a net debt-free position in the third quarter of 2025, which is a massive change for a capital-intensive shipping company.

This aggressive debt repayment means StealthGas Inc. (GASS) is now funding its growth and fleet maintenance almost entirely through retained earnings and equity, not borrowed money. This is a huge competitive advantage in a volatile market because it cuts interest expense and frees up cash flow. Honestly, it's a textbook example of financial de-risking.

Overview of Debt Levels (2025)

StealthGas Inc. (GASS) has systematically dismantled its debt load over the past few years. For the first half of 2025 alone, the company repaid $53.6 million in debt, with total repayments reaching $86 million for the year as of the third quarter. The remaining debt was minimal before the final repayment.

Here's the quick math on their debt structure right before they became net debt-free in July 2025, based on Q2 2025 figures:

• Total Debt (MRQ, June 30, 2025): $32.00 million
• Current Portion of Debt (Short-term): $2.1 million
• Long-Term Portion of Debt: $29.7 million

By July 2025, the last remaining facility was fully repaid, meaning the company's fully-owned fleet is now unencumbered, or debt-free. This is a rare and powerful position in the LPG shipping industry.

Debt-to-Equity Ratio and Industry Comparison

The debt-to-equity ratio (D/E) measures how much of a company's financing comes from debt versus shareholders' equity. For StealthGas Inc. (GASS), this ratio has plummeted, reflecting their debt elimination strategy. As of the most recent quarter, the Total Debt/Equity ratio stood at a remarkably low 4.83% (or 0.05 to 0.08 depending on the specific calculation).

To be fair, the industry average for the broader Energy sector is a median of 8.0% for the long-term debt/equity ratio. StealthGas Inc. (GASS)'s long-term debt/equity ratio of approximately 4.5% (MRQ) is already significantly below this median, and with the final debt repayment, the ratio effectively approaches zero. This is an extremely conservative balance sheet.

Balancing Debt Financing with Equity Funding

The company's strategy has clearly swung away from debt financing. With $87.3 million in cash as of June 30, 2025, and no significant debt, the focus has shifted entirely to returning value to shareholders and organic growth. This is a powerful signal to the market.

Instead of debt issuances, StealthGas Inc. (GASS) is using its strong cash flow to fund a share repurchase program. Since June 2023, the company has spent over $21.2 million on buying back its own shares, including $1.8 million in 2025. This action directly increases shareholder value by reducing the number of outstanding shares. This is how they are balancing their capital structure: less leverage, more equity returns.

If you want to dig deeper into who is benefiting from this strategy, you should check out Exploring StealthGas Inc. (GASS) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if StealthGas Inc. (GASS) has the cash to cover its near-term bills and whether its financial structure is sound. The short answer is yes, absolutely: the company's liquidity position is exceptionally strong, driven by a successful, aggressive debt paydown strategy in 2025 that has nearly eliminated debt on its core fleet.

Current and Quick Ratios Signal Strong Health

Forget the textbook definitions for a second. The Current Ratio and Quick Ratio (or Acid-Test Ratio) simply tell you how many dollars of easily accessible assets the company has for every dollar of short-term liabilities. StealthGas Inc. is in a fantastic position, especially for a shipping company.

• Current Ratio (TTM): A formidable 3.87. This means for every $1 in current obligations, the company has $3.87 in current assets to cover it. A ratio over 2.0 is generally considered healthy; 3.87 is defintely a fortress.
• Quick Ratio (TTM): This is nearly as high at 3.69. Since the Quick Ratio excludes inventory (which, for a shipping company, is minimal and mostly fuel/stores), this tells you the quality of their current assets is high-mostly cash and receivables.

A Quick Ratio this close to the Current Ratio shows StealthGas Inc. isn't relying on selling off inventory to pay its bills. That's a sign of high-quality, immediate liquidity.

Working Capital Trends and Deleveraging

Working capital is just current assets minus current liabilities; it's the cash buffer for daily operations. As of the most recent quarter (MRQ), StealthGas Inc.'s Working Capital stood at a healthy $71.84 million. Here's the quick math on why this trend is so powerful:

• Massive Debt Paydown: The company executed a strategic deleveraging, paying down a total of over $85.8 million in debt during the first nine months of 2025.
• Debt-Free Fleet: This action made the entire fully owned fleet unencumbered (debt-free). This is a game-changer, dramatically reducing interest expense and future principal payments, which frees up cash flow to be classified as working capital or used for shareholder returns.

The trend is clear: they've converted long-term liabilities into a strong, flexible cash position. The company now has ample cash and equivalents of approximately $87.3 million as of June 30, 2025.

Cash Flow Statements Overview

Cash flow tells the story of where the money is actually coming from and going. For the Trailing Twelve Months (TTM), the picture is one of self-funding strength.

The high OCF is more than enough to cover the modest capital expenditures, leaving a huge surplus. This surplus was used to aggressively pay down debt, which is the most significant financing activity in 2025.

Liquidity Strengths and Actionable Insight

StealthGas Inc.'s liquidity is a definitive strength, not a concern. The company is essentially a cash-generating machine with a clean balance sheet. The key risk is not liquidity, but rather capital allocation-what they do now that the deleveraging strategy is complete.

• Strengths: Zero debt on the fully owned fleet, a Current Ratio of 3.87, and TTM Operating Cash Flow of nearly $90 million.
• Actionable Insight: With debt obligations largely extinguished, management has maximum financial flexibility. Investors should focus on how the company will deploy its cash and the $79.42 million in TTM Free Cash Flow-will it be through dividends, more share buybacks (they spent $1.8 million on repurchases in 2025), or strategic fleet expansion?

For a deeper dive into the company's valuation models, check out the full post: Breaking Down StealthGas Inc. (GASS) Financial Health: Key Insights for Investors.

Next Step: Portfolio Manager: Model GASS's Free Cash Flow to determine the sustainable dividend capacity based on this new debt-free structure.

Valuation Analysis

You're looking at StealthGas Inc. (GASS) and trying to figure out if the market has it right. Honestly, when you stack GASS against its own earnings and book value using 2025 fiscal year data, the stock looks defintely undervalued. The market is giving you a clear signal: the company is generating substantial profit relative to its share price.

Here's the quick math on why a seasoned analyst sees a disconnect between the price and the underlying business. The key is in the multiples-the Price-to-Earnings (P/E) ratio, Price-to-Book (P/B) ratio, and Enterprise Value-to-EBITDA (EV/EBITDA). These tell you how much you're paying for a dollar of the company's earnings, assets, and operational cash flow, respectively.

• Price-to-Earnings (P/E): The Trailing Twelve Months (TTM) P/E ratio sits at about 4.12. For context, a P/E under 10 often flags a value stock, suggesting the market is not pricing in much future growth.
• Price-to-Book (P/B): The TTM P/B ratio is a remarkably low 0.36. This means you are essentially buying $1.00 of the company's net tangible assets for only 36 cents. That's a massive discount.
• Enterprise Value-to-EBITDA (EV/EBITDA): The TTM EV/EBITDA ratio is 2.28. This is a very low figure, indicating the company's total value (equity plus debt, minus cash) is cheap compared to its core operating profit (Earnings Before Interest, Taxes, Depreciation, and Amortization).

The stock price has been on a positive trajectory over the last year, still. As of mid-November 2025, the stock trades around $6.75, having climbed by about 15.29% over the last 12 months. The 52-week trading range of $4.82 to $8.18 shows that current price is sitting closer to the high end, but the valuation multiples suggest there's still room to run.

The Dividend and Analyst View: Near-Term Action

If you're looking for income, StealthGas Inc. isn't your play right now. The company currently has a TTM dividend payout of $0.00, which translates to a 0.00% dividend yield. They haven't paid a dividend in years, prioritizing debt reduction and fleet modernization instead. This is crucial: they are reinvesting profits, not distributing them, which is a growth-oriented, not income-oriented, strategy.

What this estimate hides is the powerful signal from the sell-side. The consensus among the analysts covering StealthGas Inc. is a clear Buy rating. The average 12-month price target is set at $10.00, which implies a potential upside of approximately +48.17% from the current trading price. This high target, paired with the low valuation multiples, strongly supports the argument that the stock is undervalued.

Here is a snapshot of the key valuation metrics for your reference:

The low multiples coupled with a strong analyst target suggest a compelling value proposition. Your next step should be to dig deeper into the company's capital allocation strategy to confirm the long-term sustainability of these earnings. You can start by Exploring StealthGas Inc. (GASS) Investor Profile: Who's Buying and Why? to see who else is betting on this value play.

Risk Factors

You're looking for the downside, and the picture for StealthGas Inc. (GASS) is one of high external market risk buffered by a strong, deliberate internal deleveraging strategy. The key risks aren't on their balance sheet right now, but in the choppy waters of global trade and commodity prices.

Honestly, the biggest concerns for GASS in the 2025 fiscal year stem from the volatile liquefied petroleum gas (LPG) shipping market, not their own financial structure. The industry faces a complex geopolitical backdrop, fragile petrochemical demand, and an expected decline in freight rates. Drewry projects that real Time Charter (T/C) rates will decline by about 19% in 2025, which is a major headwind for all operators in this space.

External Market and Geopolitical Risks

The global trade landscape is a defintely a mess. For GASS, two external factors stand out. First, the US-China tariff war is still reshaping trade patterns, impacting about 14% of global LPG seaborne trade. That uncertainty alone can cause a sharp drop in rates, like the 20% decline seen in Very Large Gas Carrier (VLGC) rates on the US-Japan route earlier this year.

Second, demand fundamentals are weak. Petrochemical margins in Asia are struggling, making competing feedstocks like naphtha more profitable to burn than LPG. That means less demand for GASS's carriers. Also, while US export capacity is expanding, full operations take time, and this capacity constraint kept terminal fees high in the first half of 2025, restraining overall LPG supply and trade growth.

• Fragile petrochemical demand hurts cargo volume.
• Geopolitical tensions increase operating costs.
• New vessel deliveries from 2026 could create a fleet surplus.

Operational and Financial Headwinds

Even with their strong financial position, GASS is not immune to operational pressures. In the first quarter of 2025, Time Charter equivalent revenues decreased by 4.6% to $36.9 million due to a muted market-that's a direct hit from soft rates. Plus, costs are rising. Operating expenses, including crew and maintenance, climbed in Q1 2025. We also saw voyage expenses jump by $2.2 million in Q1, a direct result of being more exposed to the volatile spot market.

Another area to watch is their joint venture (JV) performance. Equity earnings from JVs saw a significant drop to only $0.7 million in the second quarter of 2025, down sharply from $11.5 million in the same period a year prior. This is a big swing in non-core income. Furthermore, the company recognized a non-cash impairment loss of $0.5 million in Q1 2025 related to the sale of the vessel Gas Cerberus, showing the impact of fleet renewal decisions.

Mitigation and Strategic Buffer

The good news is that GASS has proactively built a substantial buffer against these risks. Their primary mitigation strategy is high period coverage (time charters), which locks in revenue and insulates them from spot market swings. They have secured circa 70% of their 2025 fleet days under these contracts, translating to total contracted revenues of over $165 million for all future periods.

Here's the quick math: that 70% coverage for the remainder of 2025 alone secures about $48 million in revenue, providing exceptional cash flow visibility. Also, their deleveraging effort is nearly complete. GASS repaid $54 million of debt year-to-date in 2025, making their fully owned fleet debt-free and the company effectively net debt free, which drastically lowers their financial risk in a downturn. Only one small facility remains, totaling $32 million. This is a huge competitive advantage. For a deeper dive into who is betting on this strategy, you should check out Exploring StealthGas Inc. (GASS) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking at StealthGas Inc. (GASS) and seeing a company that just hit a massive financial milestone, and you want to know what they do with that newfound power. The direct takeaway is this: StealthGas has traded financial risk for operational flexibility, positioning itself to capitalize on niche market demand and structural supply tightness in the small LPG carrier segment.

The biggest driver for the company's future is the successful execution of its deleveraging strategy. By July 2025, StealthGas had repaid $86 million in debt for the year, achieving a debt-free status for its entire fully owned fleet. This move slashes interest expenses-which plummeted 78% in Q2 2025-and creates a significant competitive advantage over leveraged peers. They now have immense capital allocation flexibility. That's a game-changer.

Strategic Initiatives and Fleet Optimization

StealthGas is defintely not sitting still; they are actively optimizing their fleet and trade routes. A key initiative is the geographic realignment of their operations, with over 70% of the fleet now trading in the premium-rate regions of Europe and the Mediterranean (West of Suez). This strategic shift allows them to command better day rates and compete on quality with high-standard European operators.

Furthermore, the company consolidated its ownership by acquiring the remaining 49.9% stake in two joint venture vessels, Eco Lucidity and Gas Haralambos, bringing their fully owned fleet up to 29 vessels. This simplifies their structure and ensures 100% of the cash flow from these assets flows directly to the company. They are also committed to shareholder value, having spent $1.8 million on share repurchases in 2025 alone, part of a larger program totaling over $21.2 million since June 2023.

• Slashed interest costs with zero fleet debt.
• Consolidated two vessels into the fully owned fleet.
• Shifted 70% of operations to premium European markets.

Revenue Projections and Market Advantage

The company maintains strong revenue visibility. For the 2025 fiscal year, StealthGas has already secured 70% of its fleet days under period charters, which are longer-term contracts that provide stable cash flow and insulate them from spot market volatility. This coverage has secured approximately $155 million in contracted revenues for the remainder of 2025, with total contracted revenues for all subsequent periods exceeding $165 million.

Consensus analyst estimates project their full fiscal year 2025 revenue to be around $168.00 million, with an Earnings Per Share (EPS) of $1.64. This stability is rooted in their competitive advantages:

The small LPG carrier market is aging, and new orders are scarce, so StealthGas's modern fleet is well-positioned to benefit from a tight tonnage situation. You can read more about their core business focus here: Mission Statement, Vision, & Core Values of StealthGas Inc. (GASS).