Deterra Royalties Ltd (DRR) AI Stock Analysis

• Market Cap: AU$2.31B
• Dividend Yield: 5.18%
• Average Volume (3M): 1.54M
• Price to Earnings (P/E): 12.9
• Beta (1Y): 1.14
• Revenue Growth: 6.54%
• EPS Growth: 0.48%
• Country: AU
• Employees: 11
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): 0.16
• Shares Outstanding: 529,131,600
• 10 Day Avg. Volume: 891,907
• 30 Day Avg. Volume: 1,536,395
• PEG Ratio: 0.00
• Price to Book (P/B): 15.95
• Price to Sales (P/S): 7.55
• P/FCF Ratio: 14.96
• 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: AU$4.55
• Price Target Upside: 4.36% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.29
• Revenue Forecast (FY): AU$236.80M

• Rating: 73 Outperform
• Price Target: AU$4.50 ▲(3.21% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by strong financial profitability/cash generation and a constructive earnings-call outlook (record NPAT, solid revenue growth, and strong liquidity). Valuation is supportive due to the attractive dividend yield and reasonable P/E. These positives are moderated by weak technical momentum indicators and leverage risk flagged in the balance sheet analysis.

Positive Factors

Royalty business model with low operating risk

Deterra's royalty model transfers operating and capex risk to mine operators while retaining upside to commodity prices and volumes. This structure yields durable cash flows, minimal capital intensity and scalable earnings as operators expand production, supporting long-term dividend capacity.

High profitability and strong cash conversion

Exceptionally high reported margins and near-complete conversion of profits into free cash provide persistent internal funding for dividends, debt servicing and opportunistic investments. This cash generative profile strengthens balance sheet resilience over multiple cycles.

Thacker Pass de-risking and portfolio diversification

Material de-risking, government/strategic partner funding and an extended 85‑year mine life materially enhance the long-term royalty value from lithium exposure. This diversification reduces sole reliance on iron ore and creates a durable, multi-decade royalty revenue stream.

Negative Factors

High financial leverage

Elevated debt-to-equity increases sensitivity to commodity-driven cash flow swings and interest rate moves, constraining strategic flexibility. High leverage could limit acquisition firepower and raises refinancing and covenant risk during commodity downturns or higher rates.

Revenue concentration on a single major royalty (MAC)

A large share of revenues comes from BHP's MAC royalty, concentrating counterparty, operational and commodity exposure. Sustained dependence on one operator and iron ore pricing makes earnings and dividends vulnerable to operator performance or commodity-market structural shifts.

Leadership and capital allocation uncertainty

An interim CEO and limited track record of deploying retained cash create uncertainty around execution of growth strategy and timing of reinvestment. Persistent hesitation to invest may leave returns to shareholders dependent on asset sales or market conditions rather than proactive portfolio expansion.

Deterra Royalties Ltd Business Overview & Revenue Model

Company Description

Deterra Royalties Limited operates as a royalty investment company in Australia. It is also involved in the management and growth of a portfolio of royalty assets across bulk commodities, base, and battery metals. The company holds interest in a portfolio of six royalties over the Mining Area C, Yoongarillup/Yalyalup, Eneabba, Wonnerup, and St Ives. Deterra Royalties Limited was incorporated in 2020 and is headquartered in Perth, Australia.

How the Company Makes Money

Deterra Royalties Ltd generates revenue primarily through its mineral royalty agreements, whereby it receives a percentage of the revenue from mining companies operating on lands where it holds royalty rights. This model allows DRR to earn income without the direct costs and risks associated with operating mines. Key revenue streams include royalties from iron ore production, which is a significant commodity in Australia. The company has established partnerships with various mining companies, enhancing its revenue potential. Additionally, DRR may benefit from market fluctuations in commodity prices, as higher prices can lead to increased revenue from its royalty agreements.

Deterra Royalties Ltd Financial Statement Overview

Summary

Strong profitability and cash conversion support the score (gross margin 100%, net margin 59.1%, FCF to net income 98.57%). Revenue growth was solid (+12.65%). Offsetting factors include high leverage risk noted on the balance sheet (debt-to-equity 2.37) and a slight net margin decline.

Income Statement

Deterra Royalties Ltd has demonstrated strong revenue growth with a 12.65% increase in the latest year, indicating robust demand for its offerings. The company maintains excellent profitability with a gross profit margin of 100% and a net profit margin of 59.1%, showcasing efficient cost management. EBIT and EBITDA margins are also high at 91.75% and 94.15%, respectively, reflecting strong operational efficiency. However, the net profit margin has slightly decreased from the previous year, which could be a point of concern if the trend continues.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 2.37, indicating significant leverage, which could pose a risk if not managed properly. However, the return on equity is strong at 124.90%, suggesting that the company is effectively using its equity base to generate profits. The equity ratio is not provided, but the high leverage warrants caution despite the strong ROE.

Cash Flow

Cash flow analysis reveals a slight decline in free cash flow growth, but the company maintains a healthy operating cash flow to net income ratio of 37.52, indicating strong cash generation relative to net income. The free cash flow to net income ratio is also robust at 98.57%, suggesting effective conversion of profits into cash. Despite the decline in free cash flow growth, the overall cash flow position remains solid.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	272.48M	263.43M	240.51M	229.26M	265.15M	145.21M
Gross Profit	261.23M	263.43M	231.43M	220.34M	257.12M	140.24M
EBITDA	256.48M	248.03M	225.56M	219.34M	256.78M	140.37M
Net Income	178.95M	155.69M	154.89M	152.46M	178.46M	94.26M
Balance Sheet
Total Assets	375.00M	502.37M	101.29M	115.19M	153.49M	89.09M
Cash, Cash Equivalents and Short-Term Investments	7.17M	24.39M	31.06M	29.49M	27.46M	24.21M
Total Debt	156.57M	295.40M	497.00K	186.00K	248.00K	311.00K
Total Liabilities	236.22M	377.71M	20.94M	23.05M	34.87M	27.37M
Stockholders Equity	138.79M	124.66M	80.35M	92.14M	118.63M	61.72M
Cash Flow
Free Cash Flow	173.09M	132.95M	170.09M	182.23M	127.81M	82.12M
Operating Cash Flow	173.10M	134.88M	170.18M	182.32M	127.81M	82.17M
Investing Cash Flow	102.82M	-267.73M	-88.00K	-89.00K	-10.00K	-24.45M
Financing Cash Flow	-273.34M	126.30M	-168.52M	-180.20M	-124.56M	-33.51M

Deterra Royalties Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:DRR, the sentiment is Positive. The current price of 4.36 is above the 20-day moving average (MA) of 4.21, above the 50-day MA of 4.20, and above the 200-day MA of 3.95, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 57.21 is Neutral, neither overbought nor oversold. The STOCH value of 73.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:DRR.

Deterra Royalties Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DRR	73 Outperform	AU$2.31B	12.89	151.89%	5.18%	6.54%	0.48%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
BOE	61 Neutral	AU$788.74M	-24.05	-6.67%	―	―	-164.37%
NIC	56 Neutral	AU$4.28B	-49.50	-7.26%	5.03%	-2.30%	-234.27%
IGO	49 Neutral	AU$5.90B	-28.54	-35.65%	―	-37.23%	-32433.33%
ILU	43 Neutral	AU$2.83B	-9.82	7.84%	1.04%	-4.84%	-30.61%

Deterra Royalties Ltd Corporate Events

Deterra Royalties Lifts Iron Ore Income on Record MAC Volumes, Advances Lithium Royalty Exposure

Deterra reported portfolio revenue of A$62.9 million for the December 2025 quarter, driven by a 15% quarter-on-quarter rise in MAC iron ore royalties to A$62 million on the back of record sales volumes and stronger realised prices, while other producing operations contributed A$0.9 million. The company highlighted continued progress at the Thacker Pass Lithium Project, where partners Lithium Americas and General Motors have drawn the first US$435 million tranche of a US$2.23 billion U.S. Department of Energy loan and advanced detailed engineering towards first lithium carbonate production targeted for late 2027, reinforcing the project’s strategic importance and underpinning future royalty cash flows; meanwhile, non-executive director Jason Neal has been appointed interim managing director and CEO as Deterra pursues further royalty investment opportunities from a strong balance sheet.

The most recent analyst rating on (AU:DRR) stock is a Buy with a A$5.00 price target. To see the full list of analyst forecasts on Deterra Royalties Ltd stock, see the AU:DRR Stock Forecast page.

Deterra Royalties Appoints Jason Neal as Interim CEO

Deterra Royalties Ltd has announced the commencement of Jason Neal as the Interim Managing Director and CEO, following the departure of Julian Andrews. Neal’s appointment is temporary while the company conducts a search for a permanent replacement. This leadership transition is part of Deterra’s ongoing strategy to maintain its position in the resource royalty industry, ensuring continuity and stability in its operations.

The most recent analyst rating on (AU:DRR) stock is a Hold with a A$3.75 price target. To see the full list of analyst forecasts on Deterra Royalties Ltd stock, see the AU:DRR Stock Forecast page.

Deterra Royalties Announces Director Departure

Deterra Royalties Ltd has announced the cessation of Julian Andrews as a director, effective November 28, 2025. This change in the board may impact the company’s strategic direction and stakeholder relations, as Andrews held significant interests in the company, including ordinary shares and performance rights.

The most recent analyst rating on (AU:DRR) stock is a Hold with a A$3.75 price target. To see the full list of analyst forecasts on Deterra Royalties Ltd stock, see the AU:DRR Stock Forecast page.