Matrix Composites & Engineering Ltd (MCE) AI Stock Analysis

• Market Cap: AU$58.19M
• Dividend Yield: N/A
• Average Volume (3M): 641.32K
• Price to Earnings (P/E): 6.7
• Beta (1Y): 0.98
• Revenue Growth: 57.47%
• EPS Growth: N/A
• Country: AU
• Employees: 383
• Sector: Industrials
• Sector Strength: 92
• Industry: Engineering & Construction
• EPS (TTM): 0.04
• Shares Outstanding: 223,811,170
• 10 Day Avg. Volume: 923,598
• 30 Day Avg. Volume: 641,321
• PEG Ratio: -0.02
• Price to Book (P/B): 1.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -3.54
• 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$0.28
• Price Target Upside: 9.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 76 Outperform
• Price Target: AU$0.50 ▲(92.31%Upside)

Matrix Composites & Engineering Ltd's stock score is supported primarily by its strong financial recovery and undervalued P/E ratio, indicating potential for appreciation. The technical analysis shows positive momentum, although some caution is warranted due to overbought conditions. The high debt-to-equity ratio remains a risk factor, but overall, the stock's fundamentals and valuation present a compelling case for investors.

Matrix Composites & Engineering Ltd Business Overview & Revenue Model

Company Description

Matrix Composites & Engineering Ltd (MCE) is a leading Australian company specializing in advanced composite materials and engineering solutions. The company operates across several sectors, including oil and gas, defense, and resources. MCE is known for its innovative products such as subsea buoyancy systems, composite riser systems, and advanced engineering services that cater to the specific needs of its diverse clientele.

How the Company Makes Money

Matrix Composites & Engineering Ltd generates revenue through the design, manufacture, and sale of composite materials and engineering solutions tailored to the oil and gas, defense, and resource sectors. The company's key revenue streams include the sale of subsea buoyancy systems, which are crucial for offshore oil and gas exploration, and composite riser systems that enhance the safety and efficiency of drilling operations. MCE also offers advanced engineering services, which provide additional income through consultancy and bespoke project development. Strategic partnerships with industry leaders and long-term contracts with major corporations further contribute to the company's financial performance, ensuring a steady flow of revenue.

Matrix Composites & Engineering Ltd Financial Statement Overview

Summary

Matrix Composites & Engineering Ltd has shown a robust financial turnaround with significant revenue growth and profitability improvements. However, a high debt-to-equity ratio poses leverage risks.

Income Statement

Matrix Composites & Engineering Ltd has demonstrated a significant turnaround in its income statement over the past two years. The company reported a healthy revenue growth rate of 80% from 2023 to 2024, with total revenue increasing from $47.2 million to $85.0 million. The gross profit margin improved to 20.6% in 2024, a substantial increase from previous years, indicating better cost management. The net profit margin has also improved to 4.3% from a loss position, showcasing a return to profitability. EBIT and EBITDA margins have turned positive, reflecting operational efficiency gains. Overall, the income statement shows strong growth and improved profitability.

Balance Sheet

Matrix's balance sheet reflects a moderate risk profile. The debt-to-equity ratio is relatively high at 1.27, indicating a significant reliance on debt financing. However, the company has improved its equity position, with stockholders' equity increasing to $31.0 million in 2024 from a negative position in 2022. The return on equity is 11.8%, showing decent returns on shareholder investments. The equity ratio stands at 32.6%, which suggests a balanced capital structure. The balance sheet demonstrates recovery but still presents leverage-related risks.

Cash Flow

The cash flow statement of Matrix shows positive developments. The operating cash flow to net income ratio is strong at 2.99, indicating effective cash generation from operations relative to net income. The company has also achieved a positive free cash flow of $6.4 million in 2024, reversing previous negative trends. The free cash flow growth rate is significant, showcasing improved cash management and operational performance. The cash flow statement reflects strong liquidity and operational cash efficiency.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	97.72M	85.04M	47.20M	28.63M	17.62M	27.44M
Gross Profit	20.00M	17.53M	3.99M	1.20M	-3.56M	-3.95M
EBITDA	12.36M	9.78M	14.64M	-1.51M	-21.18M	-47.14M
Net Income	8.52M	3.65M	8.68M	-4.78M	-27.92M	-67.86M
Balance Sheet
Total Assets	85.88M	95.15M	79.89M	33.22M	36.50M	61.95M
Cash, Cash Equivalents and Short-Term Investments	16.94M	23.32M	20.02M	7.59M	7.16M	14.68M
Total Debt	37.52M	39.39M	35.48M	27.26M	27.72M	28.19M
Total Liabilities	54.13M	64.14M	53.12M	34.52M	39.36M	37.86M
Stockholders Equity	31.75M	31.02M	26.77M	-1.30M	-2.86M	24.09M
Cash Flow
Free Cash Flow	-7.10M	6.38M	-13.23M	-5.66M	-7.04M	-7.53M
Operating Cash Flow	-2.82M	10.88M	-10.68M	-4.11M	-3.91M	-5.58M
Investing Cash Flow	-4.53M	2.99M	-9.99M	-1.45M	-3.13M	18.05M
Financing Cash Flow	-223.00K	-3.10M	25.63M	5.99M	-475.00K	-7.38M

Matrix Composites & Engineering Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.26
• 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:MCE, the sentiment is Positive. The current price of 0.26 is above the 20-day moving average (MA) of 0.23, above the 50-day MA of 0.22, and above the 200-day MA of 0.24, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 59.32 is Neutral, neither overbought nor oversold. The STOCH value of 60.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:MCE.

Matrix Composites & Engineering Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCE	76 Outperform	AU$58.19M	6.72	31.01%	―	57.47%	―
EVZ	70 Outperform	AU$17.60M	12.08	4.42%	―	-6.63%	-26.38%
VBC	68 Neutral	€18.70M	7.23	14.71%	―	-17.71%	―
RDG	65 Neutral	AU$26.56M	1.72	13.01%	―	66.22%	20.83%
Sector *	59 Neutral	AU$1.64B	9.63	11.24%	3.62%	6.75%	3.18%
DDB	54 Neutral	AU$40.09M	―	-35.80%	―	-32.52%	-300.55%
SOP	52 Neutral	AU$15.06M	―	-100.21%	―	9.01%	-4.27%

Matrix Composites & Engineering Ltd Corporate Events

Matrix Composites & Engineering Announces Director’s Share Disposal

Matrix Composites & Engineering Ltd announced a change in the director’s interest, with Peter Hood disposing of 430,000 ordinary fully paid shares through an on-market trade. This transaction reduced the total number of shares held by Mr. Hood to 1,178,000. The disposal of shares by a director can signal various strategic decisions or personal financial management, potentially impacting stakeholder perceptions and market dynamics.

The most recent analyst rating on (AU:MCE) stock is a Buy with a A$0.44 price target. To see the full list of analyst forecasts on Matrix Composites & Engineering Ltd stock, see the AU:MCE Stock Forecast page.

Matrix Composites & Engineering Rejects Merger Proposal with AIS

Matrix Composites & Engineering Ltd has rejected a non-binding indicative merger proposal from Advanced Innergy Solutions Pty Ltd, which would have resulted in Matrix shareholders holding 20% of the merged entity. The Board decided against the proposal, citing concerns over valuation fairness, the high conditionality of the proposal, and Matrix’s strong standalone growth prospects. The company believes it is trading below its fundamental value and remains focused on its business strategy and opportunities in the Subsea market, while being open to future opportunities that align with its strategic objectives.

The most recent analyst rating on (AU:MCE) stock is a Buy with a A$0.44 price target. To see the full list of analyst forecasts on Matrix Composites & Engineering Ltd stock, see the AU:MCE Stock Forecast page.

Matrix Composites & Engineering Clarifies Merger Proposal Details

Matrix Composites & Engineering Ltd has addressed a media article regarding a conditional, non-binding indicative merger proposal from Advanced Innergy Solutions Limited (AIS). The proposal suggests Matrix acquiring all AIS shares in exchange for new Matrix shares, resulting in Matrix shareholders owning 20% and AIS shareholders 80% of the merged entity. The value of the transaction depends on AIS’s valuation, and Matrix’s board has advised shareholders to take no action at this time, promising to keep them informed of any developments.

The most recent analyst rating on (AU:MCE) stock is a Buy with a A$0.44 price target. To see the full list of analyst forecasts on Matrix Composites & Engineering Ltd stock, see the AU:MCE Stock Forecast page.

Matrix Composites & Engineering Receives Indicative Merger Proposal

Matrix Composites & Engineering Ltd has received a confidential, highly conditional, and non-binding indicative proposal from Advanced Innergy Solutions Limited for a potential reverse merger. The proposal, which involves Matrix acquiring AIS through the issuance of shares, is still preliminary and incomplete, with no cash consideration for Matrix shareholders, and the Board advises shareholders to take no action as there is no certainty of any agreement being reached.

The most recent analyst rating on (AU:MCE) stock is a Buy with a A$0.44 price target. To see the full list of analyst forecasts on Matrix Composites & Engineering Ltd stock, see the AU:MCE Stock Forecast page.

Matrix Composites & Engineering Corrects Director’s Interest Notice

Matrix Composites & Engineering Ltd announced a correction to a previously lodged Appendix 3Y regarding a change in Director Aaron Begley’s interests. The initial notice incorrectly indicated a change in ordinary fully paid shares, while the actual change was the lapse of unlisted options without exercise. This correction ensures accurate reporting of director interests, maintaining transparency and compliance with ASX regulations.

Matrix Composites & Engineering Addresses Late Lodgement Issue

Matrix Composites & Engineering Ltd has addressed a late lodgement issue concerning the Appendices 3Y for two of its directors, Mr. Begley and Mr. Cocks, due to an administrative oversight. The company reassures stakeholders that this was an isolated incident and that its current reporting and notification practices are adequate to ensure compliance with ASX Listing Rules, thus maintaining its commitment to transparency and regulatory obligations.

Matrix Composites & Engineering Ltd Announces Director’s Interest Change

Matrix Composites & Engineering Ltd announced a change in the director’s interest, with Brendan Cocks disposing of 1,420,455 options due to the expiry of FY22 options without exercise. This change reflects a strategic adjustment in the company’s executive holdings, potentially impacting stakeholder perceptions and the company’s stock market performance.

Matrix Composites & Engineering Ltd Announces Director’s Interest Change

Matrix Composites & Engineering Ltd announced a change in the director’s interest, specifically the expiration of FY22 options held by Director Aaron Begley, which were not exercised. This change reflects the company’s ongoing management of its securities and may influence stakeholders’ perception of the company’s strategic financial decisions.

Matrix Composites & Engineering Ltd Announces Cessation of Securities

Matrix Composites & Engineering Ltd announced the cessation of 5,255,682 securities, specifically options expiring on March 8, 2025, which were not exercised or converted. This development may impact the company’s capital structure and could influence investor perceptions regarding the company’s financial strategies.