Gem Diamonds (GEMD) AI Stock Analysis

• Market Cap: £9.35M
• Dividend Yield: N/A
• Average Volume (3M): 111.01K
• Price to Earnings (P/E): 4.2
• Beta (1Y): 1.29
• Revenue Growth: 6.94%
• EPS Growth: N/A
• Country: UK
• Employees: 716
• Sector: Basic Materials
• Sector Strength: 63
• Industry: Other Precious Metals
• EPS (TTM): <0.01
• Shares Outstanding: 139,896,480
• 10 Day Avg. Volume: 111,816
• 30 Day Avg. Volume: 111,012
• PEG Ratio: -0.16
• Price to Book (P/B): 0.36
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.36
• Enterprise Value/Market Cap: 6.71
• Enterprise Value/Revenue: 0.10
• Enterprise Value/Gross Profit: 1.47
• Enterprise Value/Ebitda: 0.51
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 75 Outperform
• Price Target: 8.00p ▲(19.76%Upside)

Gem Diamonds' strong financial performance and strategic corporate events are significant positives. Despite a bearish technical outlook, the company's valuation remains attractive, contributing to a favorable overall stock score.

Gem Diamonds Business Overview & Revenue Model

Company Description

Gem Diamonds (GEMD) is a leading global diamond producer focused on the mining, exploration, and sales of high-value diamonds. The company primarily operates in the diamond mining sector and is renowned for its ownership and operation of the Letšeng mine in the Kingdom of Lesotho, which is well-known for producing some of the world's largest and highest-quality diamonds. Gem Diamonds is committed to sustainable mining practices and aims to maximize the value of its diamond resources.

How the Company Makes Money

Gem Diamonds generates revenue through the extraction, processing, and sale of rough diamonds. The company's primary revenue stream comes from the mining operations at the Letšeng mine, where it unearths high-value diamonds that are sold through tender processes to international diamond dealers and manufacturers. Gem Diamonds' focus on high-value diamonds allows it to achieve premium pricing for its stones, which significantly contributes to its earnings. Additionally, the company may engage in strategic partnerships and joint ventures to enhance its operational efficiency and expand its market presence. Factors such as global diamond demand, pricing fluctuations, and operational efficiency also play a crucial role in the company's revenue generation.

Gem Diamonds Financial Statement Overview

Summary

Gem Diamonds exhibits solid financial performance with improving revenue growth and profitability margins. The company shows strong operational efficiency and cash flow management, although revenue has yet to return to pre-2020 levels.

Income Statement

Gem Diamonds has shown a positive trend in revenue growth with a notable increase of 9.94% from 2023 to 2024. The gross profit margin improved to 27.76% in 2024, and the net profit margin turned positive at 1.88% from a loss in the previous year. The EBIT and EBITDA margins stand at 11.66% and 42.56%, respectively, indicating strong operational efficiency. However, the revenue has not yet returned to 2021 levels, suggesting room for further growth.

Balance Sheet

Gem Diamonds maintains a moderate debt-to-equity ratio of 0.18, reflecting prudent financial leverage. The return on equity (ROE) has improved to 2.03%, although it remains low, indicating limited profitability relative to equity. The equity ratio is at 40.83%, showcasing a stable financial structure with adequate equity to support assets. However, the decrease in cash and cash equivalents raises potential liquidity concerns.

Cash Flow

The company has demonstrated strong cash flow management, with free cash flow turning positive to 23.14 million in 2024 from negative in 2023. The free cash flow growth rate is significant, and the operating cash flow to net income ratio is robust at 17.69, indicating efficient cash generation relative to net income. Such performance highlights resilience in cash flow operations, despite past volatility.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	154.21M	140.29M	188.94M	201.86M	189.65M
Gross Profit	42.81M	31.18M	44.50M	58.35M	56.00M
EBITDA	65.63M	57.51M	38.56M	51.17M	53.60M
Net Income	2.89M	-2.13M	10.18M	14.77M	13.64M
Balance Sheet
Total Assets	349.10M	384.71M	366.24M	384.62M	414.20M
Cash, Cash Equivalents and Short-Term Investments	12.88M	16.50M	8.74M	30.93M	49.82M
Total Debt	25.79M	44.52M	13.84M	15.87M	22.82M
Total Liabilities	126.20M	166.59M	133.19M	137.97M	166.71M
Stockholders Equity	142.58M	138.87M	152.62M	159.81M	163.07M
Cash Flow
Free Cash Flow	23.14M	-22.13M	3.16M	2.60M	47.49M
Operating Cash Flow	51.20M	35.02M	63.03M	71.31M	96.23M
Investing Cash Flow	-27.64M	-57.15M	-59.67M	-68.69M	-48.72M
Financing Cash Flow	-26.73M	28.02M	-24.91M	-19.02M	-12.99M

Gem Diamonds Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.68
• 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 GB:GEMD, the sentiment is Negative. The current price of 6.68 is below the 20-day moving average (MA) of 7.01, below the 50-day MA of 7.55, and below the 200-day MA of 9.74, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 37.03 is Neutral, neither overbought nor oversold. The STOCH value of 28.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:GEMD.

Gem Diamonds Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GEMD	75 Outperform	£9.35M	4.18	2.04%	―	6.94%	―
Sector *	70 Neutral	¥172.92B	11.04	6.37%	3.58%	3.93%	6.24%
BOD	46 Neutral	£2.28M	―		―	―	―
PDL	41 Neutral	£26.80M	―	-35.25%	―	―	―
KDR	41 Neutral	£1.38M	―	-2.25%	―	―	33.33%

Gem Diamonds Corporate Events

Gem Diamonds Successfully Passes All AGM Resolutions

Gem Diamonds announced that all resolutions were passed at its Annual General Meeting held on 4 June 2025. The resolutions included receiving the 2024 Annual Report, approving the Directors’ Remuneration report, and re-electing several board members, among other decisions. The successful passing of these resolutions reflects strong shareholder support and positions the company for continued stability and governance in the diamond industry.

Gem Diamonds Announces Total Voting Rights Update

Gem Diamonds Limited has announced its total voting rights as of May 31, 2025, confirming 141,416,648 Ordinary Shares in issue, with 1,520,170 held in treasury, resulting in 139,896,478 voting rights. This information is crucial for shareholders to determine their notification requirements under the FCA’s Disclosure Guidance and Transparency Rules.

Gem Diamonds Q1 2025 Trading Update: Strong Sales and Strategic Production

In its Q1 2025 trading update, Gem Diamonds reported operational and sales performance metrics within the issued guidance for the year. The company achieved a notable price of US$26,441 per carat for a 67.50 carat white diamond, with two diamonds sold for over US$1 million each, generating US$3.5 million in revenue. Production during the period primarily came from the lower-grade Main Pipe, aligning with the 2025 mine plan. The ‘Large’ diamond tender was postponed due to US tariff uncertainties, with sales expected in Q2 2025. Post-period, two significant Type I diamonds were recovered, anticipated to impact future sales positively.

Gem Diamonds to Release Q1 2025 Trading Update

Gem Diamonds Limited announced that it will release its Q1 2025 Trading Update on April 30, 2025, covering the period from January 1 to March 31, 2025. This update is anticipated to provide insights into the company’s operational performance and market positioning, potentially impacting stakeholders’ perspectives on its financial health and strategic direction.

Gem Diamonds Releases 2024 Annual Report and AGM Notice

Gem Diamonds Limited has announced the distribution of its 2024 Annual Report and the Notice of the 2025 Annual General Meeting to shareholders. The meeting is scheduled for 4 June 2025 in London, and the documents are available on the company’s website and the FCA National Storage Mechanism, ensuring transparency and compliance with UK Listing Rules.

Gem Diamonds Announces Share Options for Key Executives

Gem Diamonds Limited has announced the granting of options over ordinary shares to its Directors and PDMRs, Clifford Elphick and Michael Michael, under the company’s Employee Share Option Plan 2017. This move is part of the Gem Diamonds Incentive Plan, aligning with the company’s 2024 remuneration policy, and aims to integrate annual bonus awards with the Employee Share Option Plan, potentially impacting the company’s operational incentives and stakeholder interests.

Gem Diamonds Seeks Block Listing for Employee Share Plan

Gem Diamonds has applied for a block listing of 1,325,000 ordinary shares on the London Stock Exchange to fulfill obligations under its Employee Share Plan 2017. This move is expected to enhance the company’s stock liquidity and align with its strategic goals, potentially impacting its market position positively.