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

Taking everything into account, KRR scores 7 out of 10 in our fundamental rating. KRR was compared to 820 industry peers in the Metals & Mining industry. KRR scores excellent points on both the profitability and health parts. This is a solid base for a good stock. KRR is growing strongly while it also seems undervalued. This is an interesting combination 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.
KRR had positive earnings in 4 of the past 5 years.
In the past 5 years KRR always reported a positive cash flow from operatings.

1.2 Ratios

KRR's Return On Assets of 2.29% is amongst the best of the industry. KRR outperforms 89.24% of its industry peers.
With an excellent Return On Equity value of 3.78%, KRR belongs to the best of the industry, outperforming 89.86% of the companies in the same industry.
KRR has a better Return On Invested Capital (5.99%) than 94.49% of its industry peers.
KRR had an Average Return On Invested Capital over the past 3 years of 5.90%. This 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.
The Operating Margin of KRR (14.25%) is better than 92.62% of its industry peers.
KRR's Operating Margin has improved in the last couple of years.
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

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KRR 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

An Altman-Z score of 4.00 indicates that KRR is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.00, KRR is in the better half of the industry, outperforming 64.71% of the companies in the same industry.
KRR has a debt to FCF ratio of 1.63. This is a very positive value and a sign of high solvency as it would only need 1.63 years to pay back of all of its debts.
KRR's Debt to FCF ratio of 1.63 is amongst the best of the industry. KRR outperforms 94.87% of its industry peers.
A Debt/Equity ratio of 0.15 indicates that KRR is not too dependend on debt financing.
KRR's Debt to Equity ratio of 0.15 is on the low side compared to the rest of the industry. KRR is outperformed by 68.96% of its industry peers.
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.
Looking at the Current ratio, with a value of 1.79, KRR is in line with its industry, outperforming 46.81% of the companies in the same 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.
KRR has a Quick ratio of 1.33. This is comparable to the rest of the industry: KRR outperforms 44.56% of its industry peers.
The current and quick ratio evaluation for KRR is rather negative, while it does have 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

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

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

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

The Earnings Per Share is expected to grow by 60.52% on average over the next years. This is a very strong growth
KRR is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 19.87% yearly.

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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of 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 cheaply inside the industry as 89.99% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.21, KRR is valued at the same level.
A Price/Forward Earnings ratio of 7.74 indicates a rather cheap valuation of KRR.
Based on the Price/Forward Earnings ratio, KRR is valued cheaper than 93.49% of the companies in the same industry.
KRR is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.

		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 cheaply inside the industry as 91.24% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, KRR is valued cheaply inside the industry as 93.37% of the companies are valued more expensively.

		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.