Karora Resources Inc (KRR.CA) Stock Fundamental Analysis

Canada - Toronto Stock Exchange - TSX:KRR - CA48575L2066 - Common Stock

6.7 CAD

+0.16 (+2.45%)

Last: 8/2/2024, 7:00:00 PM

Fundamental Rating

Overall KRR gets a fundamental rating of 7 out of 10. We evaluated KRR against 820 industry peers in the Metals & Mining industry. KRR has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. An interesting combination arises when we look at growth and value: KRR is growing strongly while it also seems undervalued. These ratings would make KRR suitable for value and growth and quality investing!

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1. Profitability

1.1 Basic Checks

In the past year KRR was profitable.
KRR had a positive operating cash flow in the past year.
Of the past 5 years KRR 4 years were profitable.
KRR had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 2.29%, KRR belongs to the top of the industry, outperforming 89.24% of the companies in the same industry.
KRR has a better Return On Equity (3.78%) than 89.86% of its industry peers.
With an excellent Return On Invested Capital value of 5.99%, KRR belongs to the best of the industry, outperforming 94.49% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for KRR is significantly below the industry average of 12.04%.
The last Return On Invested Capital (5.99%) for KRR is above the 3 year average (5.90%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	2.29%
ROE	3.78%
ROIC	5.99%

ROA(3y)3.18%

ROA(5y)6.17%

ROE(3y)5.4%

ROE(5y)10.25%

ROIC(3y)5.9%

ROIC(5y)6.85%

1.3 Margins

With an excellent Profit Margin value of 3.22%, KRR belongs to the best of the industry, outperforming 92.12% of the companies in the same industry.
In the last couple of years the Profit Margin of KRR has declined.
Looking at the Operating Margin, with a value of 14.25%, KRR belongs to the top of the industry, outperforming 92.62% of the companies in the same industry.
In the last couple of years the Operating Margin of KRR has grown nicely.
The Gross Margin of KRR (40.26%) is better than 94.87% of its industry peers.
KRR's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	14.25%
PM (TTM)	3.22%
GM	40.26%

OM growth 3Y-21.9%

OM growth 5Y4.75%

PM growth 3Y-61.26%

PM growth 5YN/A

GM growth 3Y-5.96%

GM growth 5Y7.74%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

KRR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for KRR has been increased compared to 1 year ago.
Compared to 1 year ago, KRR has a worse debt to assets ratio.

2.2 Solvency

KRR has an Altman-Z score of 4.00. This indicates that KRR is financially healthy and has little risk of bankruptcy at the moment.
KRR has a better Altman-Z score (4.00) than 64.71% of its industry peers.
The Debt to FCF ratio of KRR is 1.63, which is an excellent value as it means it would take KRR, only 1.63 years of fcf income to pay off all of its debts.
KRR has a Debt to FCF ratio of 1.63. This is amongst the best in the industry. KRR outperforms 94.87% of its industry peers.
KRR has a Debt/Equity ratio of 0.15. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.15, KRR is doing worse than 68.96% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for KRR, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

		Industry Rank	Sector Rank
Debt/Equity	0.15
Debt/FCF	1.63
Altman-Z	4

ROIC/WACC0.76

WACC7.85%

2.3 Liquidity

KRR has a Current Ratio of 1.79. This is a normal value and indicates that KRR is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of KRR (1.79) is comparable to the rest of the industry.
KRR has a Quick Ratio of 1.33. This is a normal value and indicates that KRR is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.33, KRR is in line with its industry, outperforming 44.56% of the companies in the same industry.
KRR does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

		Industry Rank	Sector Rank
Current Ratio	1.79
Quick Ratio	1.33

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 66.67% over the past year.
Measured over the past years, KRR shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -56.65% on average per year.
KRR shows a strong growth in Revenue. In the last year, the Revenue has grown by 24.81%.
KRR shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 26.45% yearly.

EPS 1Y (TTM)66.67%

EPS 3Y-56.65%

EPS 5YN/A

EPS Q2Q%133.33%

Revenue 1Y (TTM)24.81%

Revenue growth 3Y20.3%

Revenue growth 5Y26.45%

Sales Q2Q%19.35%

3.2 Future

Based on estimates for the next years, KRR will show a very strong growth in Earnings Per Share. The EPS will grow by 60.52% on average per year.
Based on estimates for the next years, KRR will show a quite strong growth in Revenue. The Revenue will grow by 19.87% on average per year.

EPS Next Y193.38%

EPS Next 2Y102.98%

EPS Next 3Y60.52%

EPS Next 5YN/A

Revenue Next Year38.22%

Revenue Next 2Y24.68%

Revenue Next 3Y19.87%

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 26.80, which means the current valuation is very expensive for KRR.
Based on the Price/Earnings ratio, KRR is valued cheaper than 89.99% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.25, KRR is valued at the same level.
KRR is valuated cheaply with a Price/Forward Earnings ratio of 7.74.
KRR's Price/Forward Earnings ratio is rather cheap when compared to the industry. KRR is cheaper than 93.49% of the companies in the same industry.
KRR's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.

		Industry Rank	Sector Rank
PE	26.8
Fwd PE	7.74

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, KRR is valued cheaper than 91.24% of the companies in the same industry.
93.37% of the companies in the same industry are more expensive than KRR, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	30.36
EV/EBITDA	8.95

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of KRR may justify a higher PE ratio.
A more expensive valuation may be justified as KRR's earnings are expected to grow with 60.52% in the coming years.