Lucara Diamond (LUC) AI Stock Analysis

• Market Cap: C$173.96M
• Dividend Yield: N/A
• Average Volume (3M): 196.83K
• Price to Earnings (P/E): 3.0
• Beta (1Y): <0.01
• Revenue Growth: 18.11%
• EPS Growth: N/A
• Country: CA
• Employees: 592
• Sector: Basic Materials
• Sector Strength: 62
• Industry: Mining
• EPS (TTM): 0.12
• Shares Outstanding: 451,848,940
• 10 Day Avg. Volume: 84,788
• 30 Day Avg. Volume: 196,828
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.61
• Price to Cash Flow (P/CF): 0.60
• P/FCF Ratio: 1.70
• 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$0.50
• Price Target Upside: 31.58% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

Lucara Diamond's overall stock score of 68.7 reflects a solid financial recovery, strong valuation, and positive corporate developments. The company's financial performance shows improvement, yet cash flow management remains a concern. Technical indicators are stable but suggest caution. Recent corporate events positively impact the score, indicating strategic progress and operational strength.

Positive Factors

Market Position

Lucara remains a premium diamond producer amongst its peers due to its unique diamond production mix from Karowe, known for its large and high-value diamonds.

Revenue Forecast

Lucara expects a higher proportion of diamonds recovered to be from higher value units, which drives estimated revenue in line with prior forecasts.

Negative Factors

Operational Challenges

There is caution on short- to mid-term outlook given the significant capex spend and delay in the underground development schedule.

Lucara Diamond Business Overview & Revenue Model

Company Description

Lucara Diamond Corp. is a Canadian diamond mining company focused on the exploration and development of diamond resources in Africa. The company's flagship asset is the Karowe Mine in Botswana, renowned for producing high-quality, large gem diamonds. Lucara is recognized for its innovative approach in the diamond sector, including its utilization of advanced technology in diamond recovery and its commitment to sustainable mining practices.

How the Company Makes Money

Lucara Diamond Corp. generates revenue primarily through the mining and sale of rough diamonds from its Karowe Mine. The company earns money by selling these diamonds through a combination of tender sales and long-term contracts with diamantaires, jewelry manufacturers, and other industry participants. A significant portion of Lucara's revenue comes from the sale of exceptionally large and high-value diamonds, which are often sold through special tenders known as 'exceptional stone tenders'. Additionally, the company has invested in a digital sales platform, Clara Diamond Solutions, which facilitates the sale of diamonds through a secure, blockchain-enabled marketplace, further contributing to its revenue streams. Strategic partnerships and relationships with key industry players also play a role in maximizing the company's financial performance.

Lucara Diamond Financial Statement Overview

Summary

Lucara Diamond demonstrates a recovery trend with improvements in profitability and operational margins. The balance sheet indicates manageable leverage, though the equity ratio suggests caution. Cash flow performance is challenged by high capital expenditures impacting free cash flow. The company's financial health reflects positive trends with underlying risks, particularly in cash flow management.

Income Statement

Lucara Diamond shows a recovery in its financial performance with a notable increase in total revenue and a positive net profit margin of 19.57% in 2024, compared to a negative margin in 2023. The gross profit margin has remained relatively stable, indicating consistent profitability. However, the revenue growth rate has been erratic, with a decrease from 2022 to 2023 and a subsequent increase in 2024. The EBIT and EBITDA margins have strengthened, reflecting improved operational efficiency.

Balance Sheet

The company's balance sheet highlights a moderate debt-to-equity ratio of 0.72, indicating reasonable leverage levels. The return on equity (ROE) is 14.69%, showcasing effective use of shareholder funds to generate profit. However, the equity ratio of 41.11% suggests potential risk as liabilities form a significant portion of total assets. Overall, the balance sheet reflects a stable yet cautious financial position.

Cash Flow

Lucara Diamond's cash flow performance is mixed, with a concerning decline in free cash flow to -$38.71 million in 2024. Although operating cash flow remains robust, the free cash flow to net income ratio is negative, indicating challenges in converting profits to free cash flow. The operating cash flow to net income ratio of 1.41 suggests efficient cash generation from operations, yet high capital expenditures strain the free cash flow.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
203.88M	177.37M	212.93M	230.08M	125.26M
	Gross Profit
84.45M	78.70M	84.60M	75.14M	-7.73M
	EBIT
84.45M	54.38M	61.77M	52.76M	-28.48M
	EBITDA
66.61M	53.50M	87.18M	100.29M	18.97M
	Net Income Common Stockholders
39.90M	-20.19M	40.43M	23.83M	-26.28M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
22.79M	13.34M	26.42M	27.01M	4.92M
	Total Assets
660.83M	575.80M	495.84M	411.95M	333.85M
	Total Debt
195.83M	137.99M	78.60M	48.90M	32.27M
	Net Debt
173.04M	124.65M	52.18M	21.89M	27.36M
	Total Liabilities
389.10M	333.67M	225.78M	162.98M	125.66M
	Stockholders Equity
271.73M	242.13M	270.06M	248.97M	208.19M
Cash Flow		Free Cash Flow
-38.71M	-52.33M	77.15M	68.10M	-35.48M
	Operating Cash Flow
56.30M	63.36M	96.23M	83.39M	-1.53M
	Investing Cash Flow
-94.35M	-115.79M	-125.42M	-97.54M	-33.95M
	Financing Cash Flow
47.76M	39.66M	29.14M	36.80M	29.37M

Lucara Diamond Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.38
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LUC, the sentiment is Negative. The current price of 0.38 is below the 20-day moving average (MA) of 0.39, below the 50-day MA of 0.39, and below the 200-day MA of 0.41, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 42.34 is Neutral, neither overbought nor oversold. The STOCH value of 18.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:LUC.

Lucara Diamond Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LUC	69 Neutral	C$173.96M	3.00	16.80%	―	18.11%	―
NAR	57 Neutral	C$3.94M	3.76	3.27%	―	―	―
MPVD	47 Neutral	$13.80M	―	-23.89%	―	-14.40%	-327.14%
Sector *	47 Neutral	$2.64B	-3.82	-29.05%	3.32%	2.72%	-29.50%
DIAM	32 Underperform	C$27.79M	―	-122.71%	―	―	93.82%

Lucara Diamond Corporate Events

Lucara Diamond Corp. Appoints Melissa Harmon to Board of Directors

Lucara Diamond Corp. has announced the appointment of Melissa Harmon to its Board of Directors. Ms. Harmon, with over two decades of experience in gold mining and a strong background in safety and technical expertise, is expected to contribute significantly to Lucara’s ongoing development of the Karowe underground project. Her appointment is seen as a strategic move to enhance the company’s operational capabilities and industry positioning.

Lucara Diamond Sets New Annual Production Record in 2024

Lucara Diamond Corp. announced a record-breaking performance for the fiscal year 2024, highlighted by the recovery of two exceptional diamonds larger than 1,000 carats and achieving new production records. The company reported total sales of 399,215 carats generating $203.9 million in revenue. Lucara also made significant progress in its shaft sinking and development projects, with substantial advancements in both the production and ventilation shafts. The sale of its interest in Clara Diamond Solutions and the achievement of all operational and financial metrics from its 2024 Revised Guidance further underscore its strategic realignment and operational success.

Lucara Diamond Corp. Celebrates Historic Sale of Two Exceptional Diamonds

Lucara Diamond Corp. has announced the successful sale of two exceptional diamonds, the 549 carat Sethunya and the 1,080 carat Eva Star, from its Karowe Mine in Botswana, for a total of $54 million. This sale underscores Lucara’s reputation as a leading producer of high-quality, large diamonds, reinforcing strong demand in the luxury market and highlighting the significant value of their innovative diamond recovery efforts.

Lucara Diamond Corp. Moves Swedish Listing to Nasdaq First North Growth Market

Lucara Diamond Corp. has successfully transitioned its Swedish listing to the Nasdaq First North Growth Market, with trading set to commence on January 31, 2025. This strategic move may enhance its market positioning without affecting its listings on the Toronto and Botswana Stock Exchanges, and shareholders are not required to take any action.

Lucara Diamond to Transition Swedish Listing to Nasdaq First North Growth Market

Lucara Diamond Corp. has received conditional approval to transition its Swedish stock listing from Nasdaq Stockholm to Nasdaq First North Growth Market, with trading set to begin on January 31, 2025. This move aligns with Lucara’s market capitalization and strategic focus on its underground mining project, aiming to create a more favorable environment for competition and growth without requiring shareholders to take any action.

Lucara Diamond to Transition Swedish Listing to Nasdaq First North Growth Market

Lucara Diamond Corp. has announced its transition from Nasdaq Stockholm to the Nasdaq First North Growth Market in Sweden, effective January 31, 2025. This move aligns with the company’s market capitalization and supports its strategic focus on advancing its underground mining project, allowing Lucara to better compete with peer companies.

Lucara Diamond Increases Share Capital and Voting Rights

Lucara Diamond Corp has increased its share capital by issuing 675,000 new common shares, bringing the total to 451,848,948 shares with voting rights. This update is crucial for shareholders determining their disclosure requirements under Swedish financial regulations. Lucara continues to operate transparently, focusing on its Karowe Diamond Mine in Botswana.

Lucara Diamond Shifts to Nasdaq First North

Lucara Diamond Corp. plans to transfer its share listing from Nasdaq Stockholm Main Market to Nasdaq First North Growth Market, aligning more closely with its market capitalization and strategic focus. The company’s listings on the Toronto and Botswana Stock Exchanges remain unchanged, and it will continue transparent communication with market participants.

Lucara Diamond Unveils Names for Two Giant Gems

Lucara Diamond has named two extraordinary diamonds, the 2,488 carat ‘Motswedi’ and the 1,094 carat ‘Seriti,’ emphasizing their cultural and geological significance. These gems, discovered in the Karowe Mine in Botswana, are set to make a significant impact on the global market. The company hosted a national competition in Botswana for naming the diamonds, with winners receiving prizes and a mine tour.