Capricorn Metals (ASX:CMM) - Share price, News & Analysis

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

CMM (A$3.43) is trading below our estimate of [[fair value]] (A$10.43)

CMM fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	5/6
Past Performance	3/6
Financial Health	4/6
Dividends	0/6

CMM Stock Overview

Capricorn Metals Ltd explores for, evaluates, and develops mineral properties in Australia and Madagascar.

Rewards

Trading at 67.1% below our estimate of its fair value

Earnings are forecast to grow 9.43% per year

Became profitable this year

Risk Analysis

High level of non-cash earnings

Shareholders have been diluted in the past year

Capricorn Metals Competitors

Emerald Resources

ASX:EMR

AU$679.4m

West African Resources

ASX:WAF

AU$1.3b

Gold Road Resources

ASX:GOR

AU$1.2b

Catalyst Metals

ASX:CYL

AU$125.0m

Price History & Performance

Summary of all time highs, changes and price drops for Capricorn Metals
Historical stock prices
Current Share Price	AU$3.43
52 Week High	AU$4.85
52 Week Low	AU$1.74
Beta	0.58
1 Month Change	-3.11%
3 Month Change	-14.46%
1 Year Change	81.96%
3 Year Change	670.79%
5 Year Change	746.91%
Change since IPO	154.07%

Shareholder Returns

	CMM	AU Metals and Mining	AU Market
7D	-2.3%	-5.9%	1.4%
1Y	82.0%	-12.4%	-11.3%

Return vs Industry: CMM exceeded the Australian Metals and Mining industry which returned -12.4% over the past year.

Return vs Market: CMM exceeded the Australian Market which returned -11.3% over the past year.

Price Volatility

Is CMM's price volatile compared to industry and market?
CMM volatility
CMM Average Weekly Movement	7.3%
Metals and Mining Industry Average Movement	11.4%
Market Average Movement	9.7%
10% most volatile stocks in AU Market	16.3%
10% least volatile stocks in AU Market	4.2%

Stable Share Price: CMM is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: CMM's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2006	n/a	Kim Massey	https://capmetals.com.au

Capricorn Metals Ltd explores for, evaluates, and develops mineral properties in Australia and Madagascar. It holds a 100% interest in the Karlawinda gold project located in the Pilbara region of Western Australia. The company was formerly known as Malagasy Minerals Limited and changed its name to Capricorn Metals Limited in February 2016.

Capricorn Metals Fundamentals Summary

How do Capricorn Metals's earnings and revenue compare to its market cap?
CMM fundamental statistics
Market Cap	AU$1.27b
Earnings (TTM)	AU$49.40m
Revenue (TTM)	AU$125.81m

25.8x

P/E Ratio

10.1x

P/S Ratio

Is CMM overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CMM income statement (TTM)
Revenue	AU$125.81m
Cost of Revenue	AU$64.62m
Gross Profit	AU$61.19m
Other Expenses	AU$11.79m
Earnings	AU$49.40m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.13
Gross Margin	48.64%
Net Profit Margin	39.26%
Debt/Equity Ratio	36.6%

How did CMM perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CMM. This is calculated by dividing CMM's market cap by their current preferred multiple.
What is CMM's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$1.27b

CMM 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	10.9x
Enterprise Value/EBITDA	19.7x
PEG Ratio	2.7x

Price to Earnings Ratio vs Peers

How does CMM's PE Ratio compare to its peers?

CMM PE Ratio vs Peers

The above table shows the PE ratio for CMM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	67.7x
EMR Emerald Resources	208.6x	n/a	AU$679.4m
WAF West African Resources	6.6x	3.4%	AU$1.3b
GOR Gold Road Resources	32.9x	21.5%	AU$1.2b
CYL Catalyst Metals	22.8x	n/a	AU$125.0m
CMM Capricorn Metals	25.8x	9.4%	AU$1.3b

Forward PE

Price-To-Earnings vs Peers: CMM is good value based on its Price-To-Earnings Ratio (25.8x) compared to the peer average (67.7x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: CMM is expensive based on its Price-To-Earnings Ratio (25.8x) compared to the Australian Metals and Mining industry average (9x)

Price to Earnings Ratio vs Fair Ratio

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

CMM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	25.8x
Fair PE Ratio	16.4x

Price-To-Earnings vs Fair Ratio: CMM is expensive based on its Price-To-Earnings Ratio (25.8x) compared to the estimated Fair Price-To-Earnings Ratio (16.4x).

Share Price vs Fair Value

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

Below Fair Value: CMM (A$3.43) is trading below our estimate of fair value (A$10.43)

Significantly Below Fair Value: CMM is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: CMM is poor value based on its PEG Ratio (2.7x)

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Future Growth

How is Capricorn Metals forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CMM's forecast earnings growth (9.4% per year) is above the savings rate (1.8%).

Earnings vs Market: CMM's earnings (9.4% per year) are forecast to grow faster than the Australian market (6% per year).

High Growth Earnings: CMM's earnings are forecast to grow, but not significantly.

Revenue vs Market: CMM's revenue (20.5% per year) is forecast to grow faster than the Australian market (5.2% per year).

High Growth Revenue: CMM's revenue (20.5% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CMM's Return on Equity is forecast to be high in 3 years time (20.7%)

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Past Performance

How has Capricorn Metals performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CMM has a high level of non-cash earnings.

Growing Profit Margin: CMM became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: CMM has become profitable over the past 5 years, growing earnings by 16% per year.

Accelerating Growth: CMM has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: CMM has become profitable in the last year, making it difficult to compare its past year earnings growth to the Metals and Mining industry (57.3%).

Return on Equity

High ROE: CMM's Return on Equity (24.1%) is considered high.

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Financial Health

How is Capricorn Metals's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CMM's short term assets (A$62.1M) exceed its short term liabilities (A$60.7M).

Long Term Liabilities: CMM's short term assets (A$62.1M) do not cover its long term liabilities (A$121.7M).

Debt to Equity History and Analysis

Debt Level: CMM's net debt to equity ratio (21.2%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if CMM's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: CMM's debt is well covered by operating cash flow (64.3%).

Interest Coverage: CMM's interest payments on its debt are well covered by EBIT (13.3x coverage).

Balance Sheet

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Dividend

What is Capricorn Metals's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.33%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate CMM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CMM's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CMM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CMM's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as CMM has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average management tenure

CEO

Kim Massey

2.75yrs

Tenure

AU$1,479,563

Compensation

Mr. Kim Massey, B.Com, CA, serves as an Independent Non-Executive Director at DiscovEx Resources Limited since March 11, 2021. He serves as Chief Executive Officer of Capricorn Metals Ltd since September 1...

CEO Compensation Analysis

Compensation vs Market: Kim's total compensation ($USD1.03M) is about average for companies of similar size in the Australian market ($USD1.04M).

Compensation vs Earnings: Kim's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: CMM's management team is considered experienced (2.7 years average tenure).

Board Members

Experienced Board: CMM's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.2%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30