Metro Mining (ASX:MMI) - Share price, News & Analysis

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

MMI (A$0.02) is trading below our estimate of [[fair value]] (A$1.38)

MMI fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	5/6
Past Performance	0/6
Financial Health	1/6
Dividends	0/6

MMI Stock Overview

Metro Mining Limited, together with its subsidiaries, operates as an exploration and mining company in Australia and China.

Rewards

Trading at 98.4% below our estimate of its fair value

Earnings are forecast to grow 74.08% per year

Risk Analysis

Highly volatile share price over the past 3 months

Shareholders have been substantially diluted in the past year

Has less than 1 year of cash runway

Does not have a meaningful market cap (A$82M)

Metro Mining Competitors

Capral

ASX:CAA

AU$146.6m

MLG Oz

ASX:MLG

AU$86.7m

Wiluna Mining

ASX:WMC

AU$74.2m

Tombador Iron

ASX:TI1

AU$59.8m

Price History & Performance

Summary of all time highs, changes and price drops for Metro Mining
Historical stock prices
Current Share Price	AU$0.022
52 Week High	AU$0.039
52 Week Low	AU$0.014
Beta	0.28
1 Month Change	4.76%
3 Month Change	0%
1 Year Change	46.67%
3 Year Change	-80.87%
5 Year Change	-86.67%
Change since IPO	-87.06%

Recent News & Updates

Jun 16

Is Metro Mining (ASX:MMI) Using Too Much Debt?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...

Shareholder Returns

	MMI	AU Metals and Mining	AU Market
7D	10.0%	1.7%	0.7%
1Y	46.7%	-2.2%	-4.8%

Return vs Industry: MMI exceeded the Australian Metals and Mining industry which returned -2.2% over the past year.

Return vs Market: MMI exceeded the Australian Market which returned -4.8% over the past year.

Price Volatility

Is MMI's price volatile compared to industry and market?
MMI volatility
MMI Average Weekly Movement	19.1%
Metals and Mining Industry Average Movement	12.3%
Market Average Movement	10.6%
10% most volatile stocks in AU Market	17.8%
10% least volatile stocks in AU Market	4.6%

Stable Share Price: MMI is more volatile than 90% of Australian stocks over the past 3 months, typically moving +/- 19% a week.

Volatility Over Time: MMI's weekly volatility (19%) has been stable over the past year, but is still higher than 75% of Australian stocks.

About the Company

Founded	Employees	CEO	Website
2006	n/a	Simon Wensley	https://www.metromining.com.au

Metro Mining Limited, together with its subsidiaries, operates as an exploration and mining company in Australia and China. The company explores for coal and bauxite ores. Its flagship project is the Bauxite Hills Mine property covering an area of approximately 1,900 square kilometers located to the north of Weipa on Western Cape York.

Metro Mining Fundamentals Summary

How do Metro Mining's earnings and revenue compare to its market cap?
MMI fundamental statistics
Market Cap	AU$82.19m
Earnings (TTM)	-AU$105.50m
Revenue (TTM)	AU$160.14m

0.5x

P/S Ratio

-0.8x

P/E Ratio

Is MMI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MMI income statement (TTM)
Revenue	AU$160.14m
Cost of Revenue	AU$188.25m
Gross Profit	-AU$28.11m
Other Expenses	AU$77.39m
Earnings	-AU$105.50m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	-0.028
Gross Margin	-17.56%
Net Profit Margin	-65.88%
Debt/Equity Ratio	85.2%

How did MMI perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for MMI. This is calculated by dividing MMI's market cap by their current preferred multiple.
What is MMI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$82.19m

MMI 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	0.8x
Enterprise Value/EBITDA	-4.2x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

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

MMI PS Ratio vs Peers

The above table shows the PS ratio for MMI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	2.7x
CAA Capral	0.3x	n/a	AU$146.6m
MLG MLG Oz	0.3x	8.2%	AU$86.7m
WMC Wiluna Mining	0.7x	47.0%	AU$74.2m
TI1 Tombador Iron	9.5x	n/a	AU$59.8m
MMI Metro Mining	0.5x	11.9%	AU$82.2m

Price-To-Sales vs Peers: MMI is good value based on its Price-To-Sales Ratio (0.5x) compared to the peer average (2.7x).

Price to Earnings Ratio vs Industry

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

Price-To-Sales vs Industry: MMI is good value based on its Price-To-Sales Ratio (0.5x) compared to the Australian Metals and Mining industry average (42.3x)

Price to Sales Ratio vs Fair Ratio

What is MMI'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.

MMI PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.5x
Fair PS Ratio	0.5x

Price-To-Sales vs Fair Ratio: MMI is expensive based on its Price-To-Sales Ratio (0.5x) compared to the estimated Fair Price-To-Sales Ratio (0.5x).

Share Price vs Fair Value

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

Below Fair Value: MMI (A$0.02) is trading below our estimate of fair value (A$1.38)

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

Analyst Price Targets

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

Analyst Forecast: Target price is more than 20% higher than the current share price, but there are not enough analysts covering the stock to determine statistical confidence in agreement.

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Future Growth

How is Metro Mining forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

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

74.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MMI is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.8%).

Earnings vs Market: MMI is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: MMI is expected to become profitable in the next 3 years.

Revenue vs Market: MMI's revenue (11.9% per year) is forecast to grow faster than the Australian market (6.2% per year).

High Growth Revenue: MMI's revenue (11.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: MMI's Return on Equity is forecast to be very high in 3 years time (54.2%).

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Past Performance

How has Metro Mining performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

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

-62.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MMI is currently unprofitable.

Growing Profit Margin: MMI is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: MMI is unprofitable, and losses have increased over the past 5 years at a rate of 62.2% per year.

Accelerating Growth: Unable to compare MMI's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MMI is unprofitable, making it difficult to compare its past year earnings growth to the Metals and Mining industry (57%).

Return on Equity

High ROE: MMI has a negative Return on Equity (-251.23%), as it is currently unprofitable.

Discover strong past performing companies

Financial Health

How is Metro Mining's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: MMI's short term assets (A$40.6M) do not cover its short term liabilities (A$46.9M).

Long Term Liabilities: MMI's short term assets (A$40.6M) do not cover its long term liabilities (A$63.4M).

Debt to Equity History and Analysis

Debt Level: MMI's net debt to equity ratio (52.1%) is considered high.

Reducing Debt: MMI's debt to equity ratio has reduced from 147.6% to 85.2% over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: MMI has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if MMI has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.

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Dividend

What is Metro Mining 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

22.73%

Forecast Dividend Yield

Dividend Yield vs Market

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

High Dividend: Unable to evaluate MMI'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 MMI's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if MMI'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 MMI has not reported any payouts.

Discover strong dividend paying companies

Management

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

0.6yrs

Average management tenure

CEO

Simon Wensley

1.08yrs

Tenure

AU$549,184

Compensation

Mr. Simon Wensley has been Managing Director and Chief Executive Officer at Metro Mining Limited since July 05, 2021. He serves as Director at Metro Mining Limited since May 25, 2021. He served as Chief Co...

CEO Compensation Analysis

Compensation vs Market: Simon's total compensation ($USD379.90K) is above average for companies of similar size in the Australian market ($USD283.14K).

Compensation vs Earnings: Insufficient data to compare Simon's compensation with company performance.

Leadership Team

Experienced Management: MMI's management team is not considered experienced ( 0.6 years average tenure), which suggests a new team.

Board Members

Experienced Board: MMI's board of directors are not considered experienced ( 1.3 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 substantially diluted in the past year, with total shares outstanding growing by 52.6%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/18 00:00
End of Day Share Price	2022/08/18 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31