Foraco International (FAR) AI Stock Analysis

• Market Cap: C$179.62M
• Dividend Yield: 3.3%
• Average Volume (3M): 52.59K
• Price to Earnings (P/E): 4.7
• Beta (1Y): 0.87
• Revenue Growth: -19.60%
• EPS Growth: -1.66%
• Country: CA
• Employees: 1,850
• Sector: Basic Materials
• Sector Strength: 59
• Industry: Industrial Materials
• EPS (TTM): 0.38
• Shares Outstanding: 98,693,900
• 10 Day Avg. Volume: 14,589
• 30 Day Avg. Volume: 52,593
• PEG Ratio: 0.00004
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.49
• Price to Cash Flow (P/CF): 2.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$4.25
• Price Target Upside: 133.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

Foraco International's stock has a moderate overall score. The company's strong profitability metrics are offset by declining revenue and cash flow challenges. Technically, the stock shows bearish trends and weak momentum, tempering optimism. However, its attractive valuation with a low P/E ratio and solid dividend yield provides a cushion for potential investors.

Foraco International Business Overview & Revenue Model

Company Description

Foraco International SA, together with its subsidiaries, provides drilling services worldwide. It operates through two segments: Mining and Water. The company offers its drilling services to the mining and energy industry, such as exploration, development, and production related underground water drilling services. It also drills wells for drinking, irrigation, industrial water, and dewatering wells; and undertakes a range of projects, including village water drilling programs, specialized drilling projects to access mineral water using sanitary protection methods, and large diameter well fields for residential supply in urban environments, as well as provides inspection, servicing, and rehabilitation services for existing wells. As of December 31, 2021, the company operated 302 drill rigs, including 62 rotary drilling rigs, 190 core diamond drilling rigs, 18 combination rigs, and 32 underground rigs. It serves mining companies, governmental organizations, and international development funds. The company was founded in 1961 and is headquartered in Marseille, France.

How the Company Makes Money

Foraco International generates revenue primarily through the provision of drilling services to the mining and water sectors. The company's key revenue streams include contracts with mining companies for exploration and production drilling, as well as projects with governmental and international agencies for water drilling services. Foraco's extensive fleet of drilling rigs, technical expertise, and global reach enable it to secure long-term contracts and partnerships, contributing significantly to its earnings. Additionally, the company's focus on safety, innovation, and environmental sustainability helps it maintain competitive advantages and attract a diverse range of clients.

Foraco International Financial Statement Overview

Summary

Foraco International demonstrates a stable financial position with strong profitability metrics such as net profit margin and return on equity. However, declining revenue and free cash flow growth present challenges. The company's leverage is moderate, which is typical in the mining industry, but maintaining cash flow is crucial for future stability.

Income Statement

Foraco International's TTM (Trailing-Twelve-Months) gross profit margin is 21.49%, a slight decline from the previous year. The net profit margin is 9.48%, showing stable profitability while EBIT and EBITDA margins are 14.50% and 19.98%, respectively, indicating a well-managed cost structure. However, revenue has decreased by 20.68% compared to the prior year, which is a concern for growth.

Balance Sheet

The debt-to-equity ratio is 1.10, reflecting a balanced approach to leverage. The return on equity (ROE) is 35.88%, indicating strong profitability relative to shareholder equity. However, the equity ratio stands at 34.28%, suggesting moderate reliance on debt financing. These metrics suggest a stable but leveraged financial position with good returns for shareholders.

Cash Flow

The free cash flow growth rate is -64.38%, exhibiting a significant decline. The operating cash flow to net income ratio is 1.05, and free cash flow to net income ratio is 0.37, indicating adequate cash generation capacity relative to income, but with room for improvement in free cash flow generation.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
293.45M	370.09M	330.56M	269.69M	207.12M
	Gross Profit
63.06M	93.86M	71.27M	46.82M	38.23M
	EBIT
42.55M	66.71M	46.38M	58.94M	17.18M
	EBITDA
59.98M	86.30M	67.08M	77.63M	35.24M
	Net Income Common Stockholders
27.81M	28.71M	19.76M	35.49M	7.66M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
24.36M	34.29M	29.41M	23.92M	20.96M
	Total Assets
226.02M	279.73M	249.54M	228.79M	227.76M
	Total Debt
85.31M	99.49M	105.57M	109.66M	162.61M
	Net Debt
60.95M	65.20M	76.16M	85.74M	141.65M
	Total Liabilities
142.71M	181.67M	174.05M	166.26M	209.96M
	Stockholders Equity
77.50M	85.92M	65.19M	55.98M	12.93M
Cash Flow		Free Cash Flow
10.36M	29.08M	17.39M	10.43M	17.20M
	Operating Cash Flow
29.23M	55.22M	37.43M	29.02M	30.52M
	Investing Cash Flow
-18.87M	-26.14M	-20.04M	-18.59M	-13.32M
	Financing Cash Flow
-18.75M	-23.94M	-10.68M	-7.80M	-11.94M

Foraco International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.82
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FAR, the sentiment is Negative. The current price of 1.82 is below the 20-day moving average (MA) of 1.95, below the 50-day MA of 2.00, and below the 200-day MA of 2.23, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 38.52 is Neutral, neither overbought nor oversold. The STOCH value of 45.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:FAR.

Foraco International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KNT	81 Outperform	C$3.12B	20.10	26.82%	―	77.93%	236.93%
WDO	78 Outperform	C$2.68B	19.77	27.15%	―	67.54%	―
GDI	68 Neutral	C$719.90M	22.46	6.73%	―	4.84%	67.68%
FAR	62 Neutral	C$179.62M	4.72	33.77%	3.30%	-19.60%	-1.66%
Sector *	48 Neutral	$1.91B	-1.65	-22.29%	3.86%	0.68%	-27.46%

Foraco International Corporate Events

Foraco International Reports Resilient 2024 Financial Performance Amid Market Challenges

Foraco International reported a decrease in revenue for Q4 2024 to US$60.8 million from US$86.6 million in the same quarter of the previous year, reflecting challenges such as a decline in junior mining activities, strategic exits from Russia, and unfavorable foreign exchange rates. Despite these challenges, the company maintained operational resilience through workforce optimization and cost control measures, achieving an EBITDA margin of 22.7% for the year excluding one-off items. The company reduced its net debt to US$60.9 million and maintained stable net profit attributable to equity holders. While facing a slower start expected for 2025 due to delayed order confirmations, Foraco remains focused on strengthening operational efficiency and servicing top-tier customers.

Foraco to Announce Q4 2024 Financial Results

Foraco International SA announced it will release its fourth quarter 2024 financial results before the TSX market opens on February 18, 2025. The release will be followed by a conference call hosted by the CEO and CFO to review the financial results, providing stakeholders with important insights into the company’s financial performance.