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Compass Minerals International Inc (CMP)
NYSE:CMP
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Compass Minerals International
(NYSE:CMP)43Neutral
Positive Factors
Free Cash Flow
Compass’ balance sheet and cash flow look to be improving, with the potential to deliver positive free cash flow in 2025 as inventories are worked down.
Investment Rating
The analyst raised the investment rating on Compass Minerals from Neutral to Overweight, suggesting confidence in future performance and valuation.
Plant Nutrition Performance
Plant Nutrition EBITDA guidance increased, suggesting better performance in that segment.
Negative Factors
Debt Refinancing
There is a need for the company to imminently refinance its debt as leverage is near covenants.
Operational Challenges
The company's Q1 EBITDA significantly missed consensus expectations, indicating operational challenges.
SEC Fine
The company was fined by the SEC for misleading investors and was subsequently sued, which may impact its reputation and financial standing.
Compass Minerals International (CMP) vs. S&P 500 (SPY)
Market Cap
$433.30M
Dividend Yield5.98%
Average Volume (3M)645.64K
Price to Earnings (P/E)―
Beta (1Y)1.24
Revenue Growth-7.25%
EPS Growth-2202.65%
CountryUS
Employees1,894
SectorBasic Materials
Sector Strength56
IndustryMining
Share Statistics
EPS (TTM)-3.73
Shares Outstanding41,504,100
10 Day Avg. Volume714,358
30 Day Avg. Volume645,640
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.38
Price to Cash Flow (P/CF)-25.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.00Price Target Upside64.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Compass Minerals International Business Overview & Revenue Model
Company DescriptionCompass Minerals International (CMP) is a leading producer of essential minerals, primarily focused on salt, plant nutrition, and specialty chemicals. The company operates through various sectors including highway de-icing, consumer and industrial salts, and plant nutrition products. Compass Minerals serves a diverse customer base across North America and internationally, leveraging its extensive network of production and distribution facilities.
How the Company Makes MoneyCompass Minerals International generates revenue through the extraction, production, and sale of its key mineral products. The company's primary revenue streams include the sale of highway de-icing salt to government agencies and private contractors during the winter season, which is a significant part of their business. Additionally, the company sells consumer and industrial salt products for various uses, including food production and water conditioning. Another substantial revenue stream comes from its plant nutrition segment, which provides specialty fertilizers and nutrients to the agricultural sector. Compass Minerals benefits from long-term contracts and strategic partnerships with major clients, ensuring a steady revenue flow. Seasonal demand, particularly for de-icing products, and global agricultural trends significantly impact the company's earnings.
Compass Minerals International Financial Statement Overview
Summary
Compass Minerals International faces significant financial challenges, with declining revenues and negative profitability metrics. High leverage and reduced cash flow generation further emphasize the need for strategic improvements. The company must focus on stabilizing its operations to enhance both profitability and financial health.Income Statement
Compass Minerals International has faced significant challenges in its recent performance with a negative TTM net income and declining revenue. The company's TTM gross profit margin is 17.4%, which reflects a decrease from previous years. The net profit margin has turned negative, indicating issues with profitability. Additionally, the EBIT and EBITDA margins are negative, implying operational difficulties.42
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage with a ratio of 2.90. This could pose risks if earnings do not improve. The equity ratio is 19.3%, suggesting moderate financial stability. Return on equity is negative due to the net losses, highlighting the need for improved profitability.50
Neutral
Cash Flow
The cash flow statement shows negative free cash flow growth, with a decline from the previous year. The operating cash flow to net income ratio is concerning due to negative net income. The company needs to enhance its cash generation capabilities to improve financial flexibility.35
Negative
| Breakdown | ||||
| Sep 2023 | Sep 2022 | Dec 2020 | Dec 2019 | Dec 2018 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.20B | 1.24B | 1.49B | 1.49B | 1.49B | Gross Profit |
| 233.90M | 198.00M | 336.80M | 293.90M | 293.90M | EBIT |
| 79.10M | -74.30M | 163.60M | 130.30M | 130.30M | EBITDA |
| 90.70M | 39.40M | 153.00M | 277.00M | 140.10M | Net Income Common Stockholders |
| 15.50M | -36.70M | 59.50M | 62.50M | 68.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 38.70M | 46.10M | 34.70M | 27.00M | 27.00M | Total Assets |
| 1.82B | 1.64B | 2.44B | 2.37B | 2.37B | Total Debt |
| 805.30M | 947.60M | 1.42B | 1.36B | 1.36B | Net Debt |
| 766.60M | 901.50M | 1.38B | 1.34B | 1.34B | Total Liabilities |
| 1.30B | 1.39B | 1.91B | 1.83B | 1.83B | Stockholders Equity |
| 517.20M | 257.00M | 529.60M | 540.20M | 540.20M |
| Cash Flow | Free Cash Flow | |||
| -48.30M | 23.80M | 61.50M | 93.90M | 93.90M | Operating Cash Flow |
| 101.10M | 120.50M | 159.60M | 190.70M | 190.70M | Investing Cash Flow |
| -173.00M | -80.00M | -100.40M | -99.60M | -99.60M | Financing Cash Flow |
| 64.00M | -14.30M | -50.50M | -85.90M | -85.90M |
Compass Minerals International Technical Analysis
Negative
9.73
Price Trends
11.82
Negative
12.67
Negative
11.94
Negative
Market Momentum
-0.50
Positive
25.98
Positive
8.55
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMP, the sentiment is Negative. The current price of 9.73 is below the 20-day moving average (MA) of 11.46, below the 50-day MA of 11.82, and below the 200-day MA of 11.94, indicating a bearish trend. The MACD of -0.50 indicates Positive momentum. The RSI at 25.98 is Positive, neither overbought nor oversold. The STOCH value of 8.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CMP.
Compass Minerals International Risk Analysis
Compass Minerals International disclosed 35 risk factors in its most recent earnings report. Compass Minerals International reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Compass Minerals International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Performance Comparison
CMP
Compass Minerals International
9.73
-11.24
-53.60%
CDE
Coeur Mining
5.17
2.26
77.66%
HL
Hecla Mining Company
5.11
1.32
34.83%
Compass Minerals International Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -19.72% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strategic leadership changes and improvements in the plant nutrition segment. However, these were offset by declines in salt business revenue and overall consolidated revenue. Adjusted EBITDA guidance was reduced due to slower sales in the salt segment. Cost control measures and liquidity management were positive, yet concerns regarding tariffs and production costs remain.Highlights
Senior Leadership Additions
Compass Minerals announced the addition of Pat Merritt and Peter Feldman as COO and CFO, respectively, bringing proven track records in operational management to the company.
Progress in Salt Inventory Management
North American Highway Deicing inventory volumes are targeted to be down approximately 10% year over year, despite a slow start to winter.
Improvement in Plant Nutrition Business
Plant nutrition revenue increased by 24% year over year, with sales volumes up 36% and costs down 10%, leading to an increase in guidance for this segment.
Liquidity and Leverage Management
At quarter-end, liquidity was $126 million, and the consolidated net leverage ratio was within the company's covenant at 5.9 times.
Lowlights
Decrease in Salt Revenue and Volumes
Salt business revenue decreased to $242 million from $274 million a year ago, with volumes down 13% and operating earnings per ton down by 34%.
Overall Revenue Decline
Consolidated revenue was $307 million, down 10% year over year, partly due to the absence of contribution from the Fortress US Forest Service contract.
Adjusted EBITDA Guidance Reduction
The company reduced the range for total adjusted EBITDA by roughly $15 million due to a lighter start in sales in the salt business.
Accounts Receivable Increase Due to Product Recall
Accounts receivable was affected by a $35 million gross-up related to a product recall and insurance claim.
Company Guidance
During the Compass Minerals First Quarter Fiscal 2025 Earnings Conference Call, the company provided detailed guidance for the fiscal year. Compass Minerals revised their total adjusted EBITDA guidance down by approximately $15 million due to a slower start in their salt business, attributed to mild weather in October and November. Conversely, they increased their plant nutrition segment guidance by about $4 million due to stronger sales volumes and lower costs. The firm maintained their corporate EBITDA guidance from December and reduced their capital expenditure guidance by $45 million, citing a more disciplined capital management approach. They aim to reduce North American highway deicing salt inventory volumes by approximately 10% year over year. For the first quarter, Compass Minerals reported consolidated revenue of $307 million, a 10% decrease year over year, and an adjusted EBITDA of approximately $32 million. The salt segment's revenue was $242 million, down from $274 million the previous year, with operating earnings per ton decreasing 34% to $11.79. In the plant nutrition segment, revenue increased by 24% year over year. The company highlighted their focus on continuing to improve operational efficiencies and the progress in restoring their SOP pond complex, which positively impacted their cost structure. They also discussed potential impacts of a paused U.S. tariff on Canadian imports and its implications for their salt and SOP businesses.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.