TSX:LGO

Stock Analysis Report

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Market Cap

CA$1.3b

Last Updated

2021/07/30 01:44 UTC

Data Sources

Company Financials +

Executive Summary

Largo Resources Ltd. operates as a natural resource development and exploration company in Brazil and Canada. More Details


Snowflake Analysis

Flawless balance sheet with high growth potential.

Share Price & News

How has Largo Resources's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LGO is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: LGO's weekly volatility (8%) has been stable over the past year.


Market Performance


7 Day Return

6.4%

LGO

4.9%

CA Metals and Mining

1.5%

CA Market


1 Year Return

105.4%

LGO

-3.6%

CA Metals and Mining

28.5%

CA Market

Return vs Industry: LGO exceeded the Canadian Metals and Mining industry which returned -7.7% over the past year.

Return vs Market: LGO exceeded the Canadian Market which returned 27.5% over the past year.


Shareholder returns

LGOIndustryMarket
7 Day6.4%4.9%1.5%
30 Day4.4%3.5%-0.02%
90 Day-4.5%2.6%3.9%
1 Year105.4%105.4%-2.5%-3.6%32.4%28.5%
3 Year8.1%8.1%65.0%61.0%31.5%18.8%
5 Year248.1%248.1%21.1%17.2%52.9%30.3%

Long-Term Price Volatility Vs. Market

How volatile is Largo Resources's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Largo Resources undervalued compared to its fair value and its price relative to the market?

41.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LGO (CA$20.54) is trading below our estimate of fair value (CA$35.3)

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


Price To Earnings Ratio

PE vs Industry: LGO is poor value based on its PE Ratio (145.7x) compared to the Canadian Metals and Mining industry average (11.9x).

PE vs Market: LGO is poor value based on its PE Ratio (145.7x) compared to the Canadian market (13.9x).


Price to Earnings Growth Ratio

PEG Ratio: LGO is poor value based on its PEG Ratio (3.1x)


Price to Book Ratio

PB vs Industry: LGO is overvalued based on its PB Ratio (4.4x) compared to the CA Metals and Mining industry average (2.6x).


Future Growth

How is Largo Resources forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

47.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LGO's forecast earnings growth (47.1% per year) is above the savings rate (1.5%).

Earnings vs Market: LGO's earnings (47.1% per year) are forecast to grow faster than the Canadian market (14.2% per year).

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

Revenue vs Market: LGO's revenue (12.3% per year) is forecast to grow faster than the Canadian market (5.5% per year).

High Growth Revenue: LGO's revenue (12.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LGO's Return on Equity is forecast to be high in 3 years time (27.4%)


Past Performance

How has Largo Resources performed over the past 5 years?

28.6%

Historical annual earnings growth


Earnings and Revenue History

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

Growing Profit Margin: LGO became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: LGO has become profitable over the past 5 years, growing earnings by 28.6% per year.

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

Earnings vs Industry: LGO has become profitable in the last year, making it difficult to compare its past year earnings growth to the Metals and Mining industry (214.7%).


Return on Equity

High ROE: LGO's Return on Equity (2.7%) is considered low.


Financial Health

How is Largo Resources's financial position?


Financial Position Analysis

Short Term Liabilities: LGO's short term assets ($110.6M) exceed its short term liabilities ($13.0M).

Long Term Liabilities: LGO's short term assets ($110.6M) exceed its long term liabilities ($5.4M).


Debt to Equity History and Analysis

Debt Level: LGO is debt free.

Reducing Debt: LGO has no debt compared to 5 years ago when its debt to equity ratio was 388.1%.

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

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


Balance Sheet


Dividend

What is Largo Resources's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

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

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

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LGO's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

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

5.3yrs

Average management tenure


CEO

Paulo Misk (58 yo)

1.83yrs

Tenure

US$1,779,692

Compensation

Mr. Paulo Guimarães Misk serves as Chief Executive Officer and Director of Largo Resources Ltd. since September 8, 2019. Mr. Misk is the President of Largo Resources Ltd. since October 2018 and served as i...


CEO Compensation Analysis

Compensation vs Market: Paulo's total compensation ($USD1.78M) is above average for companies of similar size in the Canadian market ($USD1.17M).

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


Leadership Team

Experienced Management: LGO's management team is seasoned and experienced (5.3 years average tenure).


Board Members

Experienced Board: LGO's board of directors are considered experienced (6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: LGO insiders have only sold shares 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 14.7%.


Top Shareholders

Company Information

Largo Resources Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Largo Resources Ltd.
  • Ticker: LGO
  • Exchange: TSX
  • Founded: 1988
  • Industry: Diversified Metals and Mining
  • Sector: Materials
  • Market Cap: CA$1.328b
  • Shares outstanding: 64.64m
  • Website: https://www.largoresources.com

Number of Employees


Location

  • Largo Resources Ltd.
  • 55 University Avenue
  • Suite 1105
  • Toronto
  • Ontario
  • M5J 2H7
  • Canada

Listings


Biography

Largo Resources Ltd. operates as a natural resource development and exploration company in Brazil and Canada. It explores for vanadium, iron, tungsten, and molybdenum deposits. The company’s principal oper...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/30 01:44
End of Day Share Price2021/07/29 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.