IGO (ASX:IGO) - Share price, News & Analysis

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

IGO (A$9.92) is trading below our estimate of [[fair value]] (A$16.44)

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

IGO Stock Overview

IGO Limited operates as an exploration and mining company that engages in discovering, developing, and operating assets focused on metals to enable clean energy in Australia.

Rewards

Trading at 39.7% below our estimate of its fair value

Earnings are forecast to grow 56.46% per year

Earnings grew by 3070.1% over the past year

Risk Analysis

IGO passed our risk checks.

IGO Competitors

Lynas Rare Earths

ASX:LYC

AU$8.1b

Iluka Resources

ASX:ILU

AU$4.0b

South32

ASX:S32

AU$17.8b

Mineral Resources

ASX:MIN

AU$8.6b

Price History & Performance

Summary of all time highs, changes and price drops for IGO
Historical stock prices
Current Share Price	AU$9.92
52 Week High	AU$15.26
52 Week Low	AU$8.05
Beta	1.05
1 Month Change	-16.43%
3 Month Change	-28.68%
1 Year Change	20.54%
3 Year Change	104.54%
5 Year Change	213.92%
Change since IPO	3,574.07%

Recent News & Updates

Jun 01

Here's Why I Think IGO (ASX:IGO) Might Deserve Your Attention Today

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...

Shareholder Returns

	IGO	AU Metals and Mining	AU Market
7D	-1.3%	-4.1%	-0.7%
1Y	20.5%	-15.0%	-10.8%

Return vs Industry: IGO exceeded the Australian Metals and Mining industry which returned -15.2% over the past year.

Return vs Market: IGO exceeded the Australian Market which returned -10.5% over the past year.

Price Volatility

Is IGO's price volatile compared to industry and market?
IGO volatility
IGO Average Weekly Movement	6.8%
Metals and Mining Industry Average Movement	11.8%
Market Average Movement	10.1%
10% most volatile stocks in AU Market	16.8%
10% least volatile stocks in AU Market	4.5%

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

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

About the Company

Founded	Employees	CEO	Website
2000	n/a	Peter J. Bradford	https://www.igo.com.au

IGO Limited operates as an exploration and mining company that engages in discovering, developing, and operating assets focused on metals to enable clean energy in Australia. It owns and operates a 100% interest in the Nova nickel-copper-cobalt operation located in the Great Western Woodlands, northeast of Norseman. The company’s primary properties are the Fraser Range nickel-copper and Paterson copper projects.

IGO Fundamentals Summary

How do IGO's earnings and revenue compare to its market cap?
IGO fundamental statistics
Market Cap	AU$7.51b
Earnings (TTM)	AU$187.77m
Revenue (TTM)	AU$736.54m

40.0x

P/E Ratio

10.2x

P/S Ratio

Is IGO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
IGO income statement (TTM)
Revenue	AU$736.54m
Cost of Revenue	AU$192.58m
Gross Profit	AU$543.96m
Other Expenses	AU$356.20m
Earnings	AU$187.77m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Jul 27, 2022

Earnings per share (EPS)	0.25
Gross Margin	73.85%
Net Profit Margin	25.49%
Debt/Equity Ratio	0%

How did IGO perform over the long term?

See historical performance and comparison

Dividends

1.0%

Current Dividend Yield

60%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

4/6

Valuation Score 4/6

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 IGO?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for IGO. This is calculated by dividing IGO's market cap by their current preferred multiple.
What is IGO's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$7.51b

IGO 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	9.3x
Enterprise Value/EBITDA	15.6x
PEG Ratio	0.7x

Price to Earnings Ratio vs Peers

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

IGO PE Ratio vs Peers

The above table shows the PE ratio for IGO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	16x
LYC Lynas Rare Earths	29.8x	11.7%	AU$8.1b
ILU Iluka Resources	11x	-8.7%	AU$4.0b
S32 South32	12x	-14.6%	AU$17.8b
MIN Mineral Resources	11.1x	24.1%	AU$8.6b
IGO IGO	40x	56.5%	AU$7.5b

Forward PE

Price-To-Earnings vs Peers: IGO is expensive based on its Price-To-Earnings Ratio (40x) compared to the peer average (16x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: IGO is expensive based on its Price-To-Earnings Ratio (40x) compared to the Australian Metals and Mining industry average (9.1x)

Price to Earnings Ratio vs Fair Ratio

What is IGO'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.

IGO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	40x
Fair PE Ratio	58.6x

Price-To-Earnings vs Fair Ratio: IGO is good value based on its Price-To-Earnings Ratio (40x) compared to the estimated Fair Price-To-Earnings Ratio (58.6x).

Share Price vs Fair Value

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

Below Fair Value: IGO (A$9.92) is trading below our estimate of fair value (A$16.44)

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

Price to Earnings Growth Ratio

PEG Ratio: IGO is good value based on its PEG Ratio (0.7x)

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Future Growth

How is IGO forecast to perform in the next 1 to 3 years based on estimates from 7 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

56.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: IGO's forecast earnings growth (56.5% per year) is above the savings rate (1.8%).

Earnings vs Market: IGO's earnings (56.5% per year) are forecast to grow faster than the Australian market (5.7% per year).

High Growth Earnings: IGO's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: IGO's revenue (8.3% per year) is forecast to grow faster than the Australian market (5.2% per year).

High Growth Revenue: IGO's revenue (8.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: IGO's Return on Equity is forecast to be high in 3 years time (31%)

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Past Performance

How has IGO performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

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

36.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: IGO has high quality earnings.

Growing Profit Margin: IGO's current net profit margins (25.5%) are higher than last year (1.4%).

Past Earnings Growth Analysis

Earnings Trend: IGO's earnings have grown significantly by 36.1% per year over the past 5 years.

Accelerating Growth: IGO's earnings growth over the past year (3070.1%) exceeds its 5-year average (36.1% per year).

Earnings vs Industry: IGO earnings growth over the past year (3070.1%) exceeded the Metals and Mining industry 57.3%.

Return on Equity

High ROE: IGO's Return on Equity (5.8%) is considered low.

Discover strong past performing companies

Financial Health

How is IGO's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

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

Financial Position Analysis

Short Term Liabilities: IGO's short term assets (A$803.3M) exceed its short term liabilities (A$267.6M).

Long Term Liabilities: IGO's short term assets (A$803.3M) exceed its long term liabilities (A$172.8M).

Debt to Equity History and Analysis

Debt Level: IGO is debt free.

Reducing Debt: IGO has no debt compared to 5 years ago when its debt to equity ratio was 11.2%.

Debt Coverage: IGO has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: IGO has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is IGO 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
Cash Flow Coverage

1.01%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: IGO's dividend (1.01%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.72%).

High Dividend: IGO's dividend (1.01%) is low compared to the top 25% of dividend payers in the Australian market (6.86%).

Stability and Growth of Payments

Stable Dividend: IGO is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: IGO is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: IGO is not paying a notable dividend for the Australian market.

Cash Payout to Shareholders

Cash Flow Coverage: IGO is not paying a notable dividend for the Australian market.

Discover strong dividend paying companies

Management

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

5.5yrs

Average management tenure

CEO

Peter J. Bradford (63 yo)

8.33yrs

Tenure

AU$2,557,791

Compensation

Mr. Peter J. L. Bradford, B.App.Sc., Extractive Metallurgy, FAusIMM, MSMME, MAIC, has been the Chief Executive Officer and Managing Director of IGO Limited (formerly known as Independence Group NL) since M...

CEO Compensation Analysis

Compensation vs Market: Peter J.'s total compensation ($USD1.75M) is below average for companies of similar size in the Australian market ($USD2.58M).

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

Leadership Team

Experienced Management: IGO's management team is seasoned and experienced (5.5 years average tenure).

Board Members

Experienced Board: IGO's board of directors are considered experienced (5.6 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: IGO insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/05 00:00
End of Day Share Price	2022/07/05 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30