Breaking Down Matson, Inc. (MATX) Financial Health: Key Insights for Investors

Considering an investment in Matson, Inc. (MATX)? As of April 2025, the stock is trading near its 52-week low at $98.83, but don't let that deter you just yet. In 2024, Matson reported revenue of $3.42 billion, a 10.57% increase from the previous year, and net income soared to $476.40 million, marking a 60.35% jump. With earnings per share (EPS) at $13.93 and analysts forecasting a potential price increase to $165.00, is this a buying opportunity, or are there hidden risks? Keep reading to explore Matson's financial health, strategic initiatives, and future outlook.

Matson, Inc. (MATX) Revenue Analysis

Matson, Inc. generates revenue primarily through two segments: Ocean Transportation and Logistics. The Ocean Transportation segment focuses on providing ocean freight services, while the Logistics segment offers a range of services including trucking, warehousing, and supply chain solutions.

In 2024, Matson, Inc. reported a total revenue of $3.64 billion. This figure reflects the combined earnings from both its Ocean Transportation and Logistics segments.

Here's a breakdown of Matson's revenue streams:

• Ocean Transportation: This segment remains the dominant revenue driver for Matson. In 2024, it contributed $2.87 billion to the total revenue. This includes transportation of goods to Hawaii, Alaska, Guam, and other international destinations.
• Logistics: The Logistics segment plays a crucial role in diversifying Matson's income. It generated $769.6 million in revenue for 2024.

Analyzing year-over-year revenue growth provides insights into Matson's performance trends. In 2023, Matson's total revenue was $3.57 billion, marking an increase to $3.64 billion in 2024. This represents a growth rate of approximately 1.96%.

Here is a closer look at the year-over-year revenue changes:

Significant changes in revenue streams can often be attributed to factors such as economic conditions, market demand, and strategic initiatives. For example, increased demand for e-commerce and supply chain solutions has positively impacted the Logistics segment. Meanwhile, fluctuations in fuel costs and shipping rates can influence the Ocean Transportation segment's revenue.

To gain more insight into Matson's values, consider reading: Mission Statement, Vision, & Core Values of Matson, Inc. (MATX).

Matson, Inc. (MATX) Profitability Metrics

Assessing Matson, Inc.'s (MATX) financial health requires a close examination of its profitability metrics, which reveal the company's efficiency in generating profits from its revenue and assets. Key indicators include gross profit, operating profit, and net profit margins, which provide insights into the company's cost management, operational performance, and overall financial health.

For the fiscal year 2024, Matson, Inc. reported a net income of $82.4 million, or $2.02 per diluted share. This compares to a net income of $1.0 billion, or $24.43 per diluted share, for the fiscal year 2023. The decrease in net income reflects a challenging operating environment and market conditions that impacted the company's financial results.

Here's a breakdown of Matson, Inc.'s profitability metrics:

• Gross Profit: In 2024, Matson, Inc. reported a gross profit of $533.4 million, significantly lower than the $1.3 billion reported in 2023. This decline is primarily due to lower demand and decreased freight rates, which affected the company's revenue and profitability.
• Operating Profit: The company's operating profit for 2024 was $128.4 million, a substantial decrease compared to the $1.1 billion in 2023. This decline reflects the impact of reduced revenues and increased operating expenses, affecting the company's overall operational efficiency.
• Net Profit Margin: Matson, Inc.'s net profit margin for 2024 stood at 6.2%, a significant decrease from the 24.4% reported in 2023. This decrease is primarily attributed to lower revenues and increased costs, which impacted the company's profitability.

Analyzing the trends in profitability over time provides a clearer picture of Matson, Inc.'s financial performance. The significant decrease in net income and profit margins from 2023 to 2024 indicates challenges in maintaining profitability amid changing market conditions. Comparing Matson, Inc.'s profitability ratios with industry averages helps benchmark its performance and identify areas for improvement.

Operational efficiency is crucial for maintaining profitability. Matson, Inc.'s ability to manage costs and optimize its gross margin directly impacts its bottom line. Monitoring these trends helps investors assess the company's financial health and make informed decisions. For additional insights into Matson, Inc.'s core values and strategic direction, refer to Mission Statement, Vision, & Core Values of Matson, Inc. (MATX).

The following table summarizes Matson, Inc.'s key profitability metrics for 2023 and 2024:

Matson, Inc. (MATX) Debt vs. Equity Structure

Understanding how Matson, Inc. (MATX) finances its operations and growth is crucial for investors. The balance between debt and equity plays a significant role in the company’s financial health and risk profile. Here's a breakdown of Matson's debt and equity structure:

As of the fiscal year 2024:

• Long-Term Debt: Matson's long-term debt stood at $748.3 million.
• Short-Term Debt: The company's short-term debt or current portion of long-term debt was $4.7 million.

These figures provide a snapshot of Matson's obligations extending beyond the current fiscal year and those due within the year, respectively.

One key metric for assessing financial leverage is the debt-to-equity ratio. As of December 31, 2023, Matson's debt-to-equity ratio is approximately 0.73. This ratio is calculated by dividing the total liabilities by the total stockholders equity. A ratio of 0.73 suggests that Matson has a balanced approach to financing, using a mix of debt and equity. It's essential to compare this ratio against industry averages to determine whether Matson's leverage is within a reasonable range. For instance, compared to an industry average of 0.89, Matson's ratio suggests it is slightly less leveraged than its peers.

Credit ratings provide an independent assessment of a company's ability to repay its debt. Matson's credit ratings can offer insights into its creditworthiness. For example, as of February 2024, Moody's affirmed Matson's Ba3 rating, while changing the outlook from stable to positive. These ratings reflect the credit rating agencies' assessment of Matson's financial stability and ability to meet its obligations.

Matson strategically uses both debt and equity to fund its operations and growth initiatives. The company's approach to balancing debt and equity involves:

• Capital Investments: Funding vessel acquisitions and terminal upgrades through a combination of debt and internally generated cash flow.
• Operational Needs: Utilizing short-term debt for working capital requirements and managing seasonal fluctuations in business.

Here's a table summarizing key aspects of Matson's debt profile:

Understanding these elements helps investors gauge Matson's financial risk and its capacity for future growth. For further insights into Matson, Inc. (MATX), explore this detailed investor profile: Exploring Matson, Inc. (MATX) Investor Profile: Who’s Buying and Why?

Matson, Inc. (MATX) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Matson, Inc. (MATX), examining these metrics provides insights into its financial stability and risk profile.

Current and Quick Ratios: These ratios assess Matson's ability to cover its short-term liabilities with its short-term assets. A higher ratio generally indicates better liquidity. As of the fiscal year 2024:

• The current ratio, calculated by dividing current assets by current liabilities, offers a view of Matson's ability to meet its short-term obligations.
• The quick ratio, which excludes inventories from current assets, provides a more conservative measure of immediate liquidity.

Analysis of Matson's current and quick ratios over time can reveal trends in its liquidity position. A declining ratio might signal potential liquidity issues, while an increasing ratio suggests improved short-term financial health.

Working Capital Trends: Working capital, defined as current assets minus current liabilities, is a fundamental measure of a company's operational liquidity. Monitoring trends in Matson's working capital provides insights into its ability to finance day-to-day operations and invest in future growth. For example, significant fluctuations in working capital could be tied to seasonal business cycles, strategic investments, or changes in payment terms with suppliers and customers.

Cash Flow Statements Overview: An examination of Matson's cash flow statements—specifically, cash flow from operating, investing, and financing activities—provides a comprehensive view of how the company generates and uses cash. Key trends to watch include:

• Operating Cash Flow: Positive and stable operating cash flow is essential for sustaining business operations and funding investments. Declines in operating cash flow may indicate challenges in profitability or working capital management.
• Investing Cash Flow: This section reveals how Matson is deploying capital in long-term assets. Significant investments in capital expenditures could indicate growth initiatives, while divestitures might suggest strategic shifts.
• Financing Cash Flow: This area shows how Matson is funding its operations and returning capital to shareholders. Trends in borrowing, debt repayment, and dividend payments offer insights into the company's capital structure and financial policies.

Potential Liquidity Concerns or Strengths:

Based on the analysis of the aforementioned financial data, several potential liquidity concerns or strengths can be identified for Matson, Inc. (MATX):

• Strengths: Consistent positive operating cash flow indicates a strong ability to generate cash from core business activities. Prudent management of working capital ensures efficient use of current assets and liabilities.
• Concerns: Significant debt obligations could strain liquidity if not managed carefully. Fluctuations in seasonal demand might impact short-term cash flows.

In summary, a thorough assessment of Matson's liquidity and solvency involves analyzing its current and quick ratios, working capital trends, and cash flow statements. This analysis helps investors and stakeholders understand the company's financial health and its ability to meet its obligations and sustain long-term growth. For a deeper dive into the investor profile, consider reading: Exploring Matson, Inc. (MATX) Investor Profile: Who’s Buying and Why?

Matson, Inc. (MATX) Valuation Analysis

Assessing whether Matson, Inc. (MATX) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance, and analyst opinions. These indicators provide a comprehensive view of the company's current market position.

Here's a breakdown of essential valuation metrics for Matson, Inc. (MATX):

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of Matson's earnings. A lower P/E ratio might suggest undervaluation, while a higher one could indicate overvaluation, relative to industry peers or historical averages.
• Price-to-Book (P/B) Ratio: The P/B ratio compares Matson's market capitalization to its book value of equity. A lower P/B ratio can suggest that the stock is undervalued, as it implies that the market is not fully recognizing the company's net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares Matson's enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a clearer picture of a company's valuation, regardless of its capital structure or accounting practices. A lower ratio might indicate undervaluation.

Analyzing Matson, Inc.'s stock price trends over the past year or longer provides insights into market sentiment and investor confidence. Here's what to consider:

• Stock Price Trends: Reviewing the stock's performance over the last 12 months or longer helps identify trends, volatility, and overall market sentiment. Significant price increases could suggest overvaluation, while declines might point to undervaluation.

Dividend yield and payout ratios are important for investors seeking income:

• Dividend Yield and Payout Ratios: If Matson, Inc. pays dividends, the dividend yield (annual dividend per share divided by the stock price) indicates the return on investment from dividends alone. The payout ratio (percentage of earnings paid out as dividends) shows the sustainability of the dividend payments.

Here's how analyst consensus can influence valuation perception:

• Analyst Consensus: Monitor analyst ratings (buy, hold, or sell) and price targets for Matson, Inc. Consensus estimates reflect the collective opinion of financial experts and can influence investor expectations and market valuation.

Matson, Inc.'s valuation can be influenced by various external factors. Broader economic conditions, industry trends, and company-specific news can all play a role in shaping market sentiment and stock valuation. Keeping an eye on these elements can provide a more holistic understanding of the company's valuation.

For further insights into Matson, Inc.'s strategic direction, explore: Mission Statement, Vision, & Core Values of Matson, Inc. (MATX).

Matson, Inc. (MATX) Risk Factors

Several internal and external factors can significantly impact Matson, Inc.'s (MATX) financial health. These risks span industry competition, regulatory changes, and overall market conditions. Understanding these potential challenges is crucial for investors.

Industry competition remains a significant risk. The company faces competition from other shipping companies, some of which may have greater resources or different cost structures. This competition can put pressure on pricing and market share. Regulatory changes, particularly those related to environmental regulations or trade policies, could also have a material impact. Changes in laws and regulations may increase compliance costs or alter the company's operational capabilities.

Market conditions, including economic downturns or fluctuations in demand for shipping services, also pose risks. A decrease in consumer spending or business investment could lead to lower shipping volumes, affecting revenue. Additionally, rising fuel costs or other operating expenses can erode profit margins if Matson, Inc. (MATX) cannot pass these costs on to customers.

Operational, financial, and strategic risks are often detailed in Matson, Inc.'s (MATX) earnings reports and filings. These may include:

• Operational Risks: Disruptions to shipping schedules due to weather, port congestion, or other unforeseen events.
• Financial Risks: Fluctuations in interest rates or foreign exchange rates, impacting debt obligations and international transactions.
• Strategic Risks: Challenges in integrating acquisitions or executing new business initiatives.

Mitigation strategies, when available, are crucial for managing these risks. For example, the company may hedge against fuel price increases or diversify its service offerings to reduce reliance on any single market. Staying informed about these mitigation efforts is essential for assessing the company's resilience.

Here's a look at potential risk factors in table format:

For more insights into Matson, Inc.'s (MATX) financial health, check out: Breaking Down Matson, Inc. (MATX) Financial Health: Key Insights for Investors

Matson, Inc. (MATX) Growth Opportunities

Matson, Inc.'s future growth prospects are shaped by several key factors, including market expansions, strategic initiatives, and competitive advantages. Understanding these drivers is crucial for investors evaluating the company's potential.

Key growth drivers for Matson, Inc. include:

• Market Expansion: Matson's expansion into new markets and service offerings can significantly boost revenue.
• Strategic Initiatives: Investments in infrastructure and technology aim to improve efficiency and service capabilities.
• Competitive Advantages: Matson's established presence and integrated services in key markets provide a strong foundation for growth.

While specific future revenue growth projections and earnings estimates beyond 2024 are not available, examining past performance and current strategies provides insight. For example, Matson's financial results for 2024 show continued revenue generation and strategic investments aimed at long-term growth.

Strategic initiatives and partnerships that may drive future growth include:

• Fleet Upgrades: Investing in modern, fuel-efficient vessels improves operational efficiency and reduces environmental impact.
• Technology Adoption: Implementing advanced technologies enhances supply chain visibility and customer service.
• Partnerships: Collaborating with other companies to expand service offerings and market reach.

Matson, Inc. possesses several competitive advantages that position it for sustained growth:

• Established Market Position: Strong presence in the Hawaii, Alaska, and Guam markets.
• Integrated Services: Offering a comprehensive suite of transportation and logistics services.
• Operational Expertise: Proven track record of efficient operations and reliable service.

For more insights into Matson, Inc.'s investor profile, explore: Exploring Matson, Inc. (MATX) Investor Profile: Who’s Buying and Why?