company background image
RYAM

Rayonier Advanced Materials NYSE:RYAM Stock Report

Last Price

US$3.71

Market Cap

US$237.3m

7D

-16.1%

1Y

-49.7%

Updated

24 Sep, 2022

Data

Company Financials +
RYAM fundamental analysis
Snowflake Score
Valuation3/6
Future Growth0/6
Past Performance0/6
Financial Health2/6
Dividends0/6

RYAM Stock Overview

Rayonier Advanced Materials Inc. manufactures and sells cellulose specialty products in the United States, China, Canada, Japan, Europe, Latin America, other Asian countries, and internationally.

Rayonier Advanced Materials Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Rayonier Advanced Materials
Historical stock prices
Current Share PriceUS$3.71
52 Week HighUS$8.32
52 Week LowUS$2.44
Beta3.2
1 Month Change-29.06%
3 Month Change40.00%
1 Year Change-49.66%
3 Year Change-15.49%
5 Year Change-72.92%
Change since IPO-90.73%

Recent News & Updates

Aug 24
Is Rayonier Advanced Materials (NYSE:RYAM) Using Debt Sensibly?

Is Rayonier Advanced Materials (NYSE:RYAM) Using Debt Sensibly?

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

Aug 13

Rayonier Is Far Too Cheap

This industry leader trades for a 53% discount to its tangible book value. The problems of last few years appear to now be behind it. The effect of recent price and production increases should positively impact the income statement going forward. Valuation For a market leader, Rayonier (RYAM) trades at a surprisingly huge discount to tangible book value. While the share price closed at $5.36 on Friday, the company's tangible book value was $11.86 as per the company's latest quarterly report. Furthermore, the company expects adjusted EBITDA of more than $100 in the final two quarters of this year. Annualizing this number and comparing it to the company's enterprise value of $1.1 billion provides an EV/EBITDA ratio in the neighborhood of 5.5x. Because this is a cyclical industry (as discussed in the next section), however, I would rely less on current earnings when valuing this company versus, say, historical earnings through a cycle and equity value. Industry Cellulose is an important component of many products, including LCD screens, pharmaceuticals and diapers. Rayonier provides this cellulose (in varying degrees of purity) to its customers by starting with a tree, and applying various manufacturing processes to arrive at its final product. Some portions of the company's sales are highly specialized, where Rayonier is considered the premium producer. But the company also delivers less-pure commodity cellulose, and is able to shift its manufacturing between these two levels of specification in order to maximize returns. For a few years now, the industry has been in turmoil. Following a banner year in 2018, cellulose producers stepped up production resulting in price competition and falling returns in 2019. COVID-19 in 2020 further curtailed demand (and, therefore, prices as well). The Company As the company's inputs (wood, energy, chemicals) started to soar in price, cost inflation then hurt the company's earnings. Supply chain issues further hampered the company in 2021 and early 2022. Finally and more recently, the company is coming off of maintenance outages that have depressed production and thus sales. Now that those outages are behind the company, management is guiding to $160 million in adjusted EBITDA for the full year, having accumulated only $54 million in adjusted EBITDA in the first half, suggesting a huge second half of the year is on the way. Looking at the company's historical financials prior to the beginning of the industry woes in 2019 shows Rayonier's potential to earn: from 2011 to 2018, the company averaged earnings per share of $3.73, with return on capital consistently in the high single digits or double digits. Compare that average EPS of $3.73 to today's paltry share price of $5.36. In 2018, the company's share price traded well above $20. Note that this is not exactly the same company it was back then. There have been asset sales (and purchases) that have moved the company in different directions over this period. But that EPS average is still helpful in describing what can happen over many years for Rayonier when the cellulose industry isn't in the tank. Management Having gone through a few difficult years, the company finally made a change at the top, and so the company's current CEO has only been there for one quarter. His stated focus as per the latest earnings conference call is "on EBITDA, increasing cash flow and reducing our leverage". The company has implemented a number of initiatives to increase pricing for its products, which should hit the bottom line in future periods. As one example, Rayonier announced they are implementing a 20% increase on the small sales volume of cellulose specialties that are not under contract, effective August 1. The maintenance outages described earlier were aimed at reducing downtime and increasing productivity, which is expected to lead to higher production/productivity and better economies of scale. Finally, the company has been selling down interests in adjacent businesses in order to pay down debt. For example, Rayonier sold its remaining ownership in GreenFirst Forest Products for $43 million and then repaid $20 million of senior notes and then $10 million of Canadian debt. Capital Allocation When asked what keeps him up at night, the new CEO answered the looming debt maturity. In 2024, the company owes $370 million of debt, and so the focus right now is generating cash flow and earnings that can 1) pay down as much of it as possible and 2) provide the company with good terms for the amount that needs to be refinanced.

Shareholder Returns

RYAMUS ChemicalsUS Market
7D-16.1%-5.6%-5.2%
1Y-49.7%-14.9%-23.0%

Return vs Industry: RYAM underperformed the US Chemicals industry which returned -14.9% over the past year.

Return vs Market: RYAM underperformed the US Market which returned -23.1% over the past year.

Price Volatility

Is RYAM's price volatile compared to industry and market?
RYAM volatility
RYAM Average Weekly Movement10.1%
Chemicals Industry Average Movement6.3%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: RYAM is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: RYAM's weekly volatility (10%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19262,500De Lyle Bloomquisthttps://www.rayonieram.com

Rayonier Advanced Materials Inc. manufactures and sells cellulose specialty products in the United States, China, Canada, Japan, Europe, Latin America, other Asian countries, and internationally. The company operates through High Purity Cellulose, Paperboard, and High-Yield Pulp segments. Its products include cellulose specialties, which are natural polymers that are used as raw materials to manufacture a range of consumer-oriented products, such as liquid crystal displays, impact-resistant plastics, thickeners for food products, pharmaceuticals, cosmetics, cigarette filters, high-tenacity rayon yarn for tires and industrial hoses, food casings, paints, and lacquers.

Rayonier Advanced Materials Inc. Fundamentals Summary

How do Rayonier Advanced Materials's earnings and revenue compare to its market cap?
RYAM fundamental statistics
Market CapUS$237.33m
Earnings (TTM)-US$91.18m
Revenue (TTM)US$1.50b

0.2x

P/S Ratio

-2.6x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
RYAM income statement (TTM)
RevenueUS$1.50b
Cost of RevenueUS$1.43b
Gross ProfitUS$64.64m
Other ExpensesUS$155.82m
Earnings-US$91.18m

Last Reported Earnings

Jun 25, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-1.43
Gross Margin4.31%
Net Profit Margin-6.08%
Debt/Equity Ratio118.7%

How did RYAM perform over the long term?

See historical performance and comparison