Largo Inc.

TSX:LGO Stock Report

Market Cap: CA$184.6m

Largo Valuation

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

Valuation Score

4/6

Valuation Score 4/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

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

Below Fair Value: LGO (CA$3.08) is trading below our estimate of fair value (CA$12.16)

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

Key Valuation Metric

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

Key metric: As LGO is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for LGO. This is calculated by dividing LGO's market cap by their current revenue.
What is LGO's PS Ratio?
PS Ratio1x
SalesUS$144.82m
Market CapUS$131.26m

Price to Sales Ratio vs Peers

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

The above table shows the PS ratio for LGO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average2.5x
SMT Sierra Metals
0.4x14.2%CA$141.9m
ARG Amerigo Resources
1.1x4.7%CA$281.9m
FAR Foraco International
0.5x6.6%CA$215.7m
AII Almonty Industries
8.2x41.7%CA$232.7m
LGO Largo
1x20.5%CA$184.6m

Price-To-Sales vs Peers: LGO is good value based on its Price-To-Sales Ratio (1x) compared to the peer average (2.5x).

Price to Sales Ratio vs Industry

How does LGO's PS Ratio compare vs other companies in the CA Metals and Mining Industry?

86 CompaniesPrice / SalesEstimated GrowthMarket Cap
Industry Avg.2.9x16.7%
LGO Largo
 1x20.5%US$131.26m
TECK.B Teck Resources
2x-10.6%US$23.92b
LUN Lundin Mining
1.8x4.4%US$7.89b
LGO 1.0xIndustry Avg. 2.9xNo. of Companies86PS0816243240+
86 CompaniesEstimated GrowthMarket Cap
Industry Avg.2.9x39.6%
LGO Largo
 1xn/aUS$131.26m
No more companies

Price-To-Sales vs Industry: LGO is good value based on its Price-To-Sales Ratio (1x) compared to the Canadian Metals and Mining industry average (3x).

Price to Sales Ratio vs Fair Ratio

What is LGO'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.

LGO PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio1x
Fair PS Ratio0.6x

Price-To-Sales vs Fair Ratio: LGO is expensive based on its Price-To-Sales Ratio (1x) compared to the estimated Fair Price-To-Sales Ratio (0.6x).

Analyst Price Targets

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

The above table shows the analyst LGO forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentCA$3.08
CA$5.50
+78.6%
9.1%CA$6.00CA$5.00n/a2
Jun ’25CA$3.01
CA$5.33
+77.2%
8.8%CA$6.00CA$5.00n/a3
May ’25CA$2.22
CA$6.67
+200.3%
25.5%CA$9.00CA$5.00n/a3
Apr ’25CA$2.26
CA$7.00
+209.7%
23.3%CA$9.00CA$5.00n/a3
Mar ’25CA$2.43
CA$7.50
+208.6%
6.7%CA$8.00CA$7.00n/a2
Feb ’25CA$2.69
CA$9.33
+247.0%
28.1%CA$13.00CA$7.00n/a3
Jan ’25CA$3.05
CA$9.81
+221.7%
20.3%CA$13.00CA$8.00n/a4
Dec ’24CA$3.20
CA$9.81
+206.6%
20.3%CA$13.00CA$8.00n/a4
Nov ’24CA$3.22
CA$10.06
+212.5%
17.9%CA$13.00CA$8.25CA$3.214
Oct ’24CA$3.85
CA$10.50
+172.7%
14.3%CA$13.00CA$9.00CA$2.764
Sep ’24CA$4.66
CA$10.60
+127.5%
12.8%CA$13.00CA$9.00CA$2.645
Aug ’24CA$6.05
CA$11.00
+81.8%
19.1%CA$15.00CA$9.00CA$2.755
Jul ’24CA$5.62
CA$11.60
+106.4%
18.6%CA$15.00CA$9.00CA$2.525
Jun ’24CA$5.12
CA$11.40
+122.7%
21.2%CA$15.00CA$8.00CA$3.015
May ’24CA$6.45
CA$11.42
+77.0%
23.0%CA$16.00CA$8.00CA$2.226
Apr ’24CA$7.01
CA$11.00
+56.9%
22.3%CA$16.00CA$8.00CA$2.266
Mar ’24CA$9.23
CA$12.75
+38.1%
28.3%CA$20.00CA$9.00CA$2.436
Feb ’24CA$8.38
CA$13.20
+57.5%
31.6%CA$20.00CA$9.00CA$2.695
Jan ’24CA$7.34
CA$13.40
+82.6%
29.7%CA$20.00CA$10.00CA$3.055
Dec ’23CA$7.19
CA$13.54
+88.3%
28.6%CA$20.00CA$10.00CA$3.205
Nov ’23CA$8.62
CA$14.34
+66.4%
33.2%CA$23.00CA$10.70CA$3.225

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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