Karora Resources Inc (KRR.CA) Stock Fundamental Analysis

Canada • Toronto Stock Exchange • TSX:KRR • CA48575L2066

6.7 CAD

+0.16 (+2.45%)

Last: Aug 2, 2024, 07:00 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. 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

KRR had positive earnings in the past year.
In the past year KRR had a positive cash flow from operations.
Of the past 5 years KRR 4 years were profitable.
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 Return On Invested Capital of 5.99%. This is amongst the best in the industry. KRR outperforms 94.49% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for KRR is significantly below the industry average of 12.04%.
The 3 year average ROIC (5.90%) for KRR is below the current ROIC(5.99%), indicating increased profibility in the last year.

		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

KRR has a better Profit Margin (3.22%) than 92.12% of its industry peers.
KRR's Profit Margin has declined in the last couple of years.
KRR's Operating Margin of 14.25% is amongst the best of the industry. KRR outperforms 92.62% of its industry peers.
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.
In the last couple of years the Gross Margin of KRR has grown nicely.

		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

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

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.
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.
A Debt/Equity ratio of 0.15 indicates that KRR is not too dependend on debt financing.
KRR has a Debt to Equity ratio of 0.15. This is in the lower half of the industry: KRR underperforms 68.96% of its industry peers.
Although KRR does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

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

ROIC/WACC0.76

WACC7.85%

2.3 Liquidity

A Current Ratio of 1.79 indicates that KRR should not have too much problems paying its short term obligations.
KRR has a Current ratio of 1.79. This is comparable to the rest of the industry: KRR outperforms 46.81% of its industry peers.
A Quick Ratio of 1.33 indicates that KRR should not have too much problems paying its short term obligations.
KRR's Quick ratio of 1.33 is in line compared to the rest of the industry. KRR outperforms 44.56% of its industry peers.
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

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.
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

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

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

KRR is valuated quite expensively with a Price/Earnings ratio of 26.80.
KRR's Price/Earnings ratio is rather cheap when compared to the industry. KRR is cheaper than 89.99% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.30, KRR is valued at the same level.
The Price/Forward Earnings ratio is 7.74, which indicates a rather cheap valuation of KRR.
Compared to the rest of the industry, the Price/Forward Earnings ratio of KRR indicates a rather cheap valuation: KRR is cheaper than 93.49% of the companies listed in the same industry.
KRR is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.57, 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 cheaper than 93.37% of the companies in the same industry.

		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.