Alcoa Valuation

Is AAI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of AAI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AAI (A$71.1) is trading above our estimate of fair value (A$15.79)

Significantly Below Fair Value: AAI is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AAI?

Key metric: As AAI is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for AAI. This is calculated by dividing AAI's market cap by their current revenue.
What is AAI's PS Ratio?
PS Ratio	1.1x
Sales	US$11.00b
Market Cap	US$11.75b

AAI key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.2x
Enterprise Value/EBITDA	12.5x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does AAI's PS Ratio compare to its peers?

The above table shows the PS ratio for AAI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PS	Estimated Growth	Market Cap
Peer Average	2.4x
S32 South32	2x	9.4%	AU$17.2b
NCM Newcrest Mining	3x	5.2%	AU$20.8b
NST Northern Star Resources	4.2x	8.5%	AU$20.6b
BSL BlueScope Steel	0.5x	1.4%	AU$9.3b
AAI Alcoa	1.1x	1.0%	AU$11.7b

Price-To-Sales vs Peers: AAI is good value based on its Price-To-Sales Ratio (1.1x) compared to the peer average (2.2x).

Price to Sales Ratio vs Industry

How does AAI's PS Ratio compare vs other companies in the AU Metals and Mining Industry?

123 Companies	Price / Sales	Estimated Growth	Market Cap
Industry Avg.	61.1x	2.6%
AAI Alcoa	1.1x	1.0%	US$11.75b
BHP BHP Group	2.4x	-4.1%	US$132.38b
FMG Fortescue	2x	-5.6%	US$36.60b

123 Companies		Estimated Growth	Market Cap
Industry Avg.	61.1x	10.6%
AAI Alcoa	1.1x	59.2%	US$11.75b

No more companies

Price-To-Sales vs Industry: AAI is good value based on its Price-To-Sales Ratio (1.1x) compared to the Australian Metals and Mining industry average (61.1x).

Price to Sales Ratio vs Fair Ratio

What is AAI's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AAI PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	1.1x
Fair PS Ratio	n/a

Price-To-Sales vs Fair Ratio: Insufficient data to calculate AAI's Price-To-Sales Fair Ratio for valuation analysis.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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