Should You Buy, Sell or Hold ZIM Stock Ahead of Q2 Earnings?

ZIM Integrated Shipping Services ZIM is set to report second-quarter 2025 results on Aug. 20, before the market opens.  

The EPS estimate for the to-be-reported quarter has been revised 42.9% upward to $1.50 per share over the past 60 days. The bottom-line projection indicates a year-over-year decline of 51.3%. The Zacks Consensus Estimate for quarterly revenues, currently pegged at $1.77 billion, suggests a year-over-year decrease of 8.5%.

For 2025, the Zacks Consensus Estimate for ZIM’s revenues is pegged at $7.01 billion, implying a contraction of 16.8% year over year. The consensus mark for 2025 EPS is pegged at $2.83, implying a decline of 84.1% year over year.

In the trailing four quarters, this shipping company surpassed EPS estimates on each of the four quarters, with the average earnings surprise being 34.5%.

ZIM Integrated Shipping Services Price and EPS Surprise

ZIM Integrated Shipping Services price-eps-surprise | ZIM Integrated Shipping Services Quote

Q2 Earnings Whispers for ZIM Stock

Our proven model does not predict an earnings beat for ZIM this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

ZIM has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Shaping ZIM’s Q2 Results

We expect the company’s bottom-line performance to have been hit by escalated voyage operating costs. High labor costs are also likely to have been a spoilsport. Geopolitical risks pose operational challenges and might hurt results. An update on the tariff concerns is expected on the second-quarter conference call.

On a brighter note, continued fleet expansion initiatives are likely to have driven the company’s performance. Reduced container availability due to Red Sea tensions is expected to have raised freight costs. This is anticipated to have aided the quarterly performance of ZIM, which provides services to East Mediterranean and Israeli ports. Revenues and carried volumes are expected to have surged due to the disruptions. Lower capacity is anticipated to have boosted earnings.

We expect an update from the management on the recent reports that CEO Eli Glickman is collaborating with shipping magnate Rami Unger to potentially acquire all of ZIM's shares.

ZIM’s Price Performance & Stock Valuation

Over the past year, shares of ZIM have lost 26.7%, marginally outperforming the Zacks Transportation - Shipping industry but underperforming the Zacks  Transportation sector. ZIM has performed better than fellow industry player Seanergy Maritime Holdings SHIP but lagged Frontline FRO in the same timeframe.

One-Year Price Performance

From a valuation perspective, ZIM is trading relatively cheap. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.30, way below the industry’s 2.09. The company has a Value Score of A. ZIM’s reading is lower than that of other shipping players like Frontline and Seanergy Maritime Holdings. While Frontline has a Value Score of B, Seanergy Maritime Holdings has a Value Score of A.

Here's How to Play ZIM Stock Pre-Q2 Earnings

Agreed that ZIM has quite a few factors working in its favor, including its shareholder-friendly approach and attractive valuation. However, the ongoing trade tension does not bode well for ZIM, as the company has significant exposure to both China and the United States. The shipping industry, of which ZIM is an integral part, is being hit by the ongoing trade tensions globally. The industry is responsible for a high majority of goods involved in world trade. Trade-related tensions have the potential to slow down goods transportation. Agreed that tariff woes are showing signs of easing, but in the absence of long-term trade deals, the scenario continues to be uncertain.

We can safely conclude that investors should refrain from rushing to buy ZIM, which is facing quite a few challenges, ahead of its earnings release on Aug. 20. Instead, they should monitor the developments of the stock closely for a more appropriate entry point, as an erroneous and hasty decision could affect portfolio gains. ZIM’s current Zacks Rank supports our thesis. 

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

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