DORIAN LPG LTD. (LPG) stock intrinsic value fair value estimate & owner earnings analysis

Dorian LPG owns and operates very large liquefied petroleum gas carriers (VLGCs), the ships that move propane and butane between export terminals and buyers around the world. As of May 22, 2026 the fleet was 27 vessels, 21 owned and 6 chartered in, totalling about 2.3 million cubic metres of capacity with an average age of 9.6 years. Nearly all revenue (about 99% in the year to March 2026) comes from the Helios LPG Pool, a 50/50 joint venture with Mitsui OSK Lines' MOL Energia that pools ships and shares the net earnings. Earnings therefore follow LPG shipping rates, which swing widely. How we measure earnings. We start from operating cash flow, remove swings in working capital, deduct stock compensation as a real cost, and deduct only the maintenance part of vessel spending. Drydocking payments already sit inside operating cash flow, so they are counted as a cost. Over the last ten fiscal years (ended March) owner earnings per share were: 0.68, 0.73, 0.38, 3.43, 2.85, 2.49, 4.35, 8.57, 3.32 and 3.87. We use the median of the full ten-year cycle, about $3.08 per share, because the period includes both the weak 2017 to 2019 years and the strong 2023 to 2024 years. The 2024 peak of $8.57 is not treated as normal. Last year's earnings growth per share was about 17%. We assume 0% growth in the first year of every case, because rates are cyclical and nothing signed or contracted supports a rise. No growth is credited in any case: fleet additions and higher rates would depend on markets or purchases that have not happened. What the ships are worth over time. The ships wear out, so the earning power is not permanent. We assume the current fleet earns at the stated level for ten years and then fades to zero over the following ten as vessels age out, with no replacement spending and no resale value assumed. That is conservative in one respect: the 2015-built vessel Cobra was sold in May 2026 for $81.9 million net, showing that mid-life ships keep real value. Because the ten-year owner-earnings figure deducts only part of the fleet spending, we did not also assume perpetual reinvestment. Base case: about $29 per share. Earnings of about $3.08 per share for ten years, then a fade over ten more years as the fleet ages. Bear case: about $14 per share. A repeat of the 2017 to 2019 slump, when owner earnings ran about $0.40 to $0.70 per share for three straight years, lasting four years, followed by a recovery to only $2.00 per share (below any year since 2020), then the same fade. The bear case is also shaped by leverage: outstanding debt was $544.4 million as of May 22, 2026 ($465.0 million hedged or fixed), and by the fact that almost all revenue flows through a single related-party pool. Bull case: about $41 per share. Earnings held at about $4.35 per share, the fiscal 2023 level and roughly the level of the last four years' upper half, for ten years, then the same fade. We do not assume a repeat of fiscal 2024. Accounting notes. Fiscal 2026 vessel spending of $93.8 million included the new dual-fuel carrier Areion, delivered in March 2026. Our formula classes most of it as maintenance, which lowers that year's figure slightly. Operating cash flow was also reduced that year by a $48.9 million increase in amounts due from the pool, which we treat as timing and added back. The company also prepaid $16.5 million of debt and declared a $1.00 per share dividend in May 2026; neither changes the valuation. What would make this wrong: sustained LPG shipping rates well above the ten-year median (upside), or a longer slump than 2017 to 2019 combined with the debt load (downside). Ship values and rates are outside management's control.