Assessing NioCorp Developments (NB) Valuation As Short Interest Climbs Above Peers

Short interest surge and what it might mean for traders

Interest in NioCorp Developments (NB) has picked up after short interest rose 29.09%, with 8.88 million shares sold short, equal to 7.81% of the float and above a peer average of 7.03%.

See our latest analysis for NioCorp Developments.

The recent short interest build up comes after a sharp 30 day share price return of 35.94% and a 1 year total shareholder return of 242.72%. This is despite the 90 day share price return being an 8.29% decline and the 3 year total shareholder return being a 16.55% loss.

If this kind of volatility has your attention, it could be a good moment to broaden your watchlist and look at fast growing stocks with high insider ownership as potential next ideas to research.

With the shares at US$7.30 and a consensus target of US$12.49, plus a long history as a pre revenue developer, the key question is simple: is NioCorp still undervalued here, or has the market already priced in future growth?

Preferred Price-to-Book of 5.9x: Is it justified?

On a P/B of 5.9x, NioCorp Developments is trading above both its peer group at 5x and the broader US Metals and Mining industry at 2.6x. This points to a richer valuation than many investors in the sector are currently paying.

The P/B ratio compares the company’s market value to its accounting book value. This can be a common reference point for resource developers where earnings and revenue are still limited or absent. In this case, NioCorp is unprofitable, reports no revenue and has a negative return on equity of 39.21%, so the market is effectively putting a sizeable premium on the project and balance sheet relative to what shows up in current financials.

Compared to peers on 5x and the US Metals and Mining average of 2.6x, NioCorp’s 5.9x stands out as meaningfully higher. This suggests the market is assigning more value to its asset base and future potential than to that of the average company in the space.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-book of 5.9x (OVERVALUED)

However, you also need to weigh NioCorp’s ongoing losses of US$54.372 million with zero revenue, as well as the execution risk tied to fully developing the Elk Creek project.

Find out about the key risks to this NioCorp Developments narrative.

Build Your Own NioCorp Developments Narrative

If you see the numbers differently or simply prefer to test your own assumptions, you can create a personalised view in just a few minutes, starting with Do it your way.

A great starting point for your NioCorp Developments research is our analysis highlighting 4 important warning signs that could impact your investment decision.

Looking for more investment ideas?

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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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