Serabi Gold (AIM:SRB) - Share price, News & Analysis

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

SRB (£0.42) is trading below our estimate of [[fair value]] (£6.77)

SRB fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	3/6
Financial Health	6/6
Dividends	0/6

SRB Stock Overview

Serabi Gold plc engages in the evaluation, exploration, and development of gold projects in Brazil.

Rewards

Trading at 93.9% below our estimate of its fair value

Revenue is forecast to grow 20.27% per year

Earnings have grown 49.4% per year over the past 5 years

Risk Analysis

Volatile share price over the past 3 months

Does not have a meaningful market cap (£31M)

Serabi Gold Competitors

Ariana Resources

AIM:AAU

UK£38.3m

AltynGold

LSE:ALTN

UK£27.3m

Bluebird Merchant Ventures

LSE:BMV

UK£12.8m

Goldplat

AIM:GDP

UK£13.5m

Price History & Performance

Summary of all time highs, changes and price drops for Serabi Gold
Historical stock prices
Current Share Price	UK£0.41
52 Week High	UK£0.80
52 Week Low	UK£0.35
Beta	1.44
1 Month Change	7.79%
3 Month Change	15.28%
1 Year Change	-35.16%
3 Year Change	-35.66%
5 Year Change	-49.94%
Change since IPO	-99.34%

Shareholder Returns

	SRB	GB Metals and Mining	GB Market
7D	12.2%	3.7%	-0.6%
1Y	-35.2%	-15.4%	-11.2%

Return vs Industry: SRB underperformed the UK Metals and Mining industry which returned -14.6% over the past year.

Return vs Market: SRB underperformed the UK Market which returned -6.4% over the past year.

Price Volatility

Is SRB's price volatile compared to industry and market?
SRB volatility
SRB Average Weekly Movement	8.3%
Metals and Mining Industry Average Movement	7.8%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.7%

Stable Share Price: SRB is more volatile than 75% of UK stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: SRB's weekly volatility (8%) has been stable over the past year, but is still higher than 75% of UK stocks.

About the Company

Founded	Employees	CEO	Website
1999	660	Mike Hodgson	https://www.serabigold.com

Serabi Gold plc engages in the evaluation, exploration, and development of gold projects in Brazil. The company also explores for copper deposits. Its primary property is the Palito mining complex covering an area of approximately 48,846 hectares located in the Tapajos region of northern Brazil.

Serabi Gold Fundamentals Summary

How do Serabi Gold's earnings and revenue compare to its market cap?
SRB fundamental statistics
Market Cap	US$37.99m
Earnings (TTM)	US$9.77m
Revenue (TTM)	US$60.20m

3.9x

P/E Ratio

0.6x

P/S Ratio

Is SRB overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SRB income statement (TTM)
Revenue	US$60.20m
Cost of Revenue	US$38.06m
Gross Profit	US$22.14m
Other Expenses	US$12.37m
Earnings	US$9.77m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 31, 2022

Earnings per share (EPS)	0.13
Gross Margin	36.78%
Net Profit Margin	16.23%
Debt/Equity Ratio	0%

How did SRB perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is SRB 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
Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SRB. This is calculated by dividing SRB's market cap by their current preferred multiple.
What is SRB's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$37.99m

SRB 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	0.6x
Enterprise Value/EBITDA	2x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

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

SRB PE Ratio vs Peers

The above table shows the PE ratio for SRB vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	4.5x
AAU Ariana Resources	9.9x	n/a	UK£38.3m
ALTN AltynGold	1.8x	n/a	UK£27.3m
BMV Bluebird Merchant Ventures	2x	n/a	UK£12.8m
GDP Goldplat	4.4x	27.2%	UK£13.5m
SRB Serabi Gold	3.9x	n/a	UK£31.4m

Price-To-Earnings vs Peers: SRB is good value based on its Price-To-Earnings Ratio (3.9x) compared to the peer average (4.5x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: SRB is good value based on its Price-To-Earnings Ratio (3.9x) compared to the UK Metals and Mining industry average (6.5x)

Price to Earnings Ratio vs Fair Ratio

What is SRB'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.

SRB PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	3.9x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate SRB's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

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

Below Fair Value: SRB (£0.42) is trading below our estimate of fair value (£6.77)

Significantly Below Fair Value: SRB 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 Serabi Gold forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

20.3%

Forecasted annual revenue growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if SRB's forecast earnings growth is above the savings rate (0.9%).

Earnings vs Market: Insufficient data to determine if SRB's earnings are forecast to grow faster than the UK market

High Growth Earnings: Insufficient data to determine if SRB's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SRB's revenue (20.3% per year) is forecast to grow faster than the UK market (4% per year).

High Growth Revenue: SRB's revenue (20.3% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SRB's Return on Equity is forecast to be low in 3 years time (7.5%).

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Past Performance

How has Serabi Gold performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

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

49.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SRB has high quality earnings.

Growing Profit Margin: SRB's current net profit margins (16.2%) are higher than last year (13.9%).

Past Earnings Growth Analysis

Earnings Trend: SRB's earnings have grown significantly by 49.4% per year over the past 5 years.

Accelerating Growth: SRB's earnings growth over the past year (19.7%) is below its 5-year average (49.4% per year).

Earnings vs Industry: SRB earnings growth over the past year (19.7%) underperformed the Metals and Mining industry 19.7%.

Return on Equity

High ROE: SRB's Return on Equity (10.8%) is considered low.

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Financial Health

How is Serabi Gold'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: SRB's short term assets ($24.0M) exceed its short term liabilities ($8.0M).

Long Term Liabilities: SRB's short term assets ($24.0M) exceed its long term liabilities ($4.6M).

Debt to Equity History and Analysis

Debt Level: SRB is debt free.

Reducing Debt: SRB has no debt compared to 5 years ago when its debt to equity ratio was 2.1%.

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

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

Balance Sheet

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Dividend

What is Serabi Gold 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

Dividend Yield vs Market

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

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

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

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Management

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

15.0yrs

Average management tenure

CEO

Mike Hodgson (60 yo)

15yrs

Tenure

US$357,421

Compensation

Mr. Michael Jonathan Hodgson, also known as Mike, BSc, MSc, CEng, FIMM, has been the Chief Executive Officer of Serabi Gold plc (a/k/a Serabi Mining Plc) since August 29, 2007 and served as its President....

CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD357.42K) is about average for companies of similar size in the UK market ($USD339.24K).

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

Leadership Team

Experienced Management: SRB's management team is seasoned and experienced (15 years average tenure).

Board Members

Experienced Board: SRB's board of directors are considered experienced (9.3 years average tenure).

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 not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/09 00:00
End of Day Share Price	2022/08/09 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31