Has the Recent 49% Surge Left Minerals Australia Shares Priced for Opportunity in 2025?

If you are keeping an eye on Mineral Resources stock and wondering whether to buy, sell, or simply hold, you are not alone. It is one of those stocks that can make investors pause and double-check their math, and lately, that pause has been well justified. Over the past three months, Mineral Resources has surged nearly 49% despite a tough prior year, suggesting that investor perception around its growth prospects and risk profile may be shifting. In the last month alone, shares have rebounded over 17%, hinting at renewed confidence after a rocky stretch marked by minus 23% returns over the last twelve months.

So what is fueling this change? Beyond the buzz, analysts and investors have paid close attention to the company’s fundamentals. Mineral Resources just scored a 5 out of 6 on our valuation score, reflecting that it is undervalued in nearly every key metric we assess. This is not just a nice number to look at; it is a rare highlight, especially for a company coming off a challenging net income period.

Of course, a strong valuation score is just the beginning. In the sections to come, we will break down how each valuation method stacks up for Mineral Resources and why so many metrics are lighting up as undervalued. Stick with us to the end, because we will also share a smarter way to think about valuation that puts all these numbers into perspective.

Mineral Resources delivered -23.3% returns over the last year. See how this stacks up to the rest of the Metals and Mining industry.

Approach 1: Mineral Resources Cash Flows

A Discounted Cash Flow (DCF) model estimates a company’s value by forecasting its future cash flows and bringing those cash flows back to today’s dollars using a discount rate. This method determines what all future cash inflows are worth in present terms, providing investors with a practical benchmark for intrinsic value.

Currently, Mineral Resources is generating a last twelve months Free Cash Flow (FCF) of negative A$2.56 Billion. This indicates the company is either investing heavily or experiencing short-term operational pressures. Analysts forecast a significant turnaround. By 2030, Mineral Resources is projected to produce approximately A$987 Million in FCF, with estimated annual growth rates ranging from 4.6% to 9.2% over the next ten years.

Based on these projections, the DCF model calculates an intrinsic value of A$90.63 per share. When compared to the current share price, this suggests the stock is trading at a 61.1% discount, indicating it is undervalued according to this approach.

Result: UNDERVALUED

Our DCF analysis suggests Mineral Resources is undervalued by 61.1%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: Mineral Resources Price vs Sales

For Mineral Resources, the Price-to-Sales (P/S) ratio is a particularly useful valuation tool, especially for companies that may not be consistently profitable but have established revenues. This multiple helps investors gauge how the market values each dollar of sales, providing a clearer view for businesses with volatile earnings or investments underway.

Growth expectations and risk profiles play a major role in what is considered a “fair” P/S ratio. Companies expected to grow faster, or that operate in less risky or more stable markets, usually trade at higher multiples. Those facing more uncertainty often warrant a lower ratio.

Currently, Mineral Resources trades at a P/S ratio of 1.36x. This is well below the Metals and Mining industry average of 69.75x and also below its closest peers at 3.67x. This signals the market is discounting its sales potential. According to Simply Wall St's proprietary Fair Ratio, which adjusts for factors including growth, margin, and market size, the appropriate multiple for Mineral Resources would be 10.61x.

This substantial gap between Mineral Resources' current 1.36x and the suggested Fair Ratio of 10.61x indicates that, based on trusted peer and industry benchmarks, the stock remains significantly undervalued on a P/S basis.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Mineral Resources Narrative

Investing is about more than just crunching numbers, which is where Narratives come in. A Narrative is simply the story or perspective you have about a company, including what you think will drive its future performance, how revenues and earnings will play out, and what you believe is a fair value for the shares.

Narratives connect the dots between a company's latest news or strategy, your outlook for its financials, and what that means for the share price. This lets you see how your viewpoint stacks up against others in the Simply Wall St community. Complicated forecasts become easy-to-use tools, allowing you to compare the fair value from your Narrative to the current price and quickly decide whether now might be a time to buy, hold, or sell.

Importantly, Narratives automatically refresh when new earnings, company updates, or economic data arrive. This makes your assessment dynamic and always relevant. For example, some investors may use a Narrative based on optimistic growth assumptions and price targets as high as A$58.00. Others may focus on risks and set their target closer to A$14.60, showing just how much your story behind the numbers can shape your decision.

Do you think there's more to the story for Mineral Resources? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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