EuroDry Soars 304% YTD: Is It Still a Red-Hot Stock to Bet on?

Shares of EuroDry EDRY, which focuses on the dry cargo and drybulk shipping markets, have performed brilliantly so far this year, gaining a mammoth 303.7%. Owing to this solid rally, shares of this shipping company have easily surpassed the Zacks Transportation - Shipping industry’s roughly 58% growth and the Zacks Transportation sector’s 12.3% uptick.

EDRY’s shares have outperformed those of fellow industry players ZIM Integrated Shipping Services ZIM and Euroseas ESEA. While ZIM’s shares have gained more than 27% year to date, Euroseas has seen its stock price rise over 40% during the same period.

YTD Price Comparison

Image Source: Zacks Investment Research

Given EDRY’s impressive rally, investors might wonder if the opportunity to add this high-flying stock to their portfolio has passed. However, we believe EDRY has a lot going for it, and this rally is far from over. In fact, the stock holds substantial upside potential. EDRY currently has a Momentum Score of A. Technical indicators suggest continued strong performance for this shipping company. The stock trades above its 50-day moving average, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in EDRY’s prospects.

50-Day Moving Average Data of EDRY Stock

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Reasons for Staying Bullish on EDRY Stock

Surging Time Charter Equivalent Rates: Average time charter equivalent (“TCE”) rate is a metric of the average daily net revenue performance of the company’s vessels. EDRY calculates average TCE by dividing time charter revenues and voyage charter revenues, if any, net of voyage expenses by voyage days for the concerned time period.

Driven by strengthening sentiment in the dry bulk market, EuroDry’s average fleet TCE rate more than doubled on a year-over-year basis to $20,398 per day in the second quarter of 2026. Favorable spot rate projections in the global dry bulk market bode well for EuroDry's top line.

High Fleet Utilization: During the second-quarter conference call, management noted that as of July 2026, the order book represented approximately 14.4% of the existing fleet. Although this figure is above the cyclical low of 7% reached in 2021, it still ranks among the lowest levels historically. For example, the order book accounted for 66% of the fleet in 2008 and around 24% in 2014.

The continued subdued pace of new vessel orders reflects factors such as constrained shipyard capacity, high newbuilding prices and ongoing uncertainty regarding future fuel technologies and changing environmental regulations. These supply-side limitations, however, may help support vessel utilization levels and freight rates, which bodes well for EDRY.

Effective Fleet Utilization and Modernization: EuroDry has capitalized on favorable conditions by maintaining a near-perfect 100% commercial and operational fleet utilization rate.

Furthermore, management has aggressively pivoted toward growth by ordering four new eco-friendly vessels (including modern Kamsarmax and Ultramax bulkers) scheduled for delivery through 2028. These additions will lower emissions and replace an aging global fleet where roughly 11.8% of ships are more than 20 years old, reflecting vessels that can be considered for scrapping.

According to Clarksons’ latest estimates, scheduled newbuilding deliveries (as a percentage of the existing fleet) are projected at 4.5 for both 2026 and 2027 and 6.9 for 2028 and beyond. In May, scheduled deliveries for 2028 and beyond were 5.5%. So additional orders placed are to be delivered after that year. Notably, Clarksons is the world's biggest shipping services provider, offering strategic maritime consultancy & shipping solutions in multiple countries.

Decent Earnings History: EuroDry has outpaced the Zacks Consensus Estimate for earnings in two of the past four quarters. The shipping company has missed the consensus mark in the other two quarters.

EuroDry Price and EPS Surprise

EuroDry price-eps-surprise | EuroDry Quote

EDRY Still a Smart Buy for Investors

EuroDry is currently considered expensive on a relative basis, with the stock trading at a 2.43x forward 12-month Price-to-Sales, which is a premium compared with the broader industry average of 2.09X. The company trades at a premium to ZIM Integrated Shipping Services and Euroseas. Such a premium valuation signals strong market confidence in EDRY’s prospects.

This reflects investors’ strong preference for the stock, driven by the tailwinds mentioned in the write-up. Thus, investors may consider buying EDRY despite its premium valuation.

With many positives driving the stock, EDRY presents a compelling investment opportunity now. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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