Rainbow Rare Earths (RBW) AI Stock Analysis

• Market Cap: £72.41M
• Dividend Yield: N/A
• Average Volume (3M): 402.21K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.15
• Revenue Growth: N/A
• EPS Growth: 66.85%
• Country: UK
• Employees: 40
• Sector: Basic Materials
• Sector Strength: 71
• Industry: Industrial Materials
• EPS (TTM): >-0.01
• Shares Outstanding: 643,688,200
• 10 Day Avg. Volume: 354,494
• 30 Day Avg. Volume: 402,213
• PEG Ratio: -269.61
• Price to Book (P/B): 4.90
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -5.93K
• 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: £34.00
• Price Target Upside: 30809.09% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 50 Neutral
• Price Target: ―

Rainbow Rare Earths' stock score is weighed down by its financial performance, with ongoing losses and no revenue generation presenting substantial risks. However, strong technical indicators suggest bullish momentum, potentially driven by strategic projects like Phalaborwa. The valuation remains challenging due to negative earnings, but the stock's momentum and future projects provide some optimism.

Rainbow Rare Earths Business Overview & Revenue Model

Company Description

Rainbow Rare Earths Limited engages in the mining and exploration of rare earth minerals. It explores for neodymium and praseodymium deposits. The company primarily holds a 90% interest in the Gakara project covering an area of approximately 135 square kilometers located in Western Burundi. It also holds Phalaborwa project located in South Africa. The company was founded in 2011 and is based in Saint Peter Port, the United Kingdom.

How the Company Makes Money

Rainbow Rare Earths generates revenue through the extraction and sale of rare earth elements. The company's primary revenue stream comes from mining operations at its Gakara Rare Earth Project, where it extracts and processes rare earth minerals for sale to global markets. These minerals are in high demand for use in the manufacture of magnets, batteries, and other critical components in various technology and industrial sectors. The company may also engage in partnerships with other mining firms or technology companies to enhance its mining operations or expand its market reach. Additionally, Rainbow Rare Earths could benefit from favorable government policies and market dynamics that drive demand for rare earth elements, contributing to its earnings.

Rainbow Rare Earths Financial Statement Overview

Summary

Rainbow Rare Earths is experiencing significant financial difficulties with zero revenue over the past three years and persistent losses. The income statement shows negative net income and margins, indicating severe profitability challenges. The balance sheet reflects a low debt-to-equity ratio, suggesting conservative leverage, which is positive, but the lack of revenue generation undermines financial stability. The cash flow statement highlights a continuous cash burn with negative operating and free cash flows, exacerbating the financial strain.

Income Statement

Rainbow Rare Earths has consistently reported zero revenue for the past three fiscal years, indicating a lack of sales activity or successful monetization of operations. The net income has remained negative, reflecting ongoing losses. The EBIT and EBITDA margins are significantly negative, highlighting the challenges in covering operating expenses and generating positive earnings. Despite a reduction in EBIT loss from 2023 to 2024, the overall profitability remains a concern.

Balance Sheet

The company's debt-to-equity ratio is low, suggesting conservative leverage relative to its equity base, which is generally positive. However, the equity ratio indicates that a significant portion of the company's assets is financed by equity rather than liabilities, which can limit financial flexibility. The stockholders' equity has grown over the years, which could be seen as a positive sign of financial stability, but the continuous negative net income remains a risk factor.

Cash Flow

Operating cash flow has been consistently negative, indicating ongoing cash burn from core operations. The free cash flow is also negative, and the free cash flow growth rate has worsened significantly from 2023 to 2024, reflecting increased capital expenditures and challenges in generating positive cash flows. The operating cash flow to net income ratio is poor, emphasizing inefficiencies in converting income to cash.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	0.00	0.00	0.00	639.00K	422.00K
Gross Profit	0.00	0.00	0.00	0.00	-762.00K
EBITDA	-3.56M	-3.16M	-3.23M	-2.44M	-1.76M
Net Income	-4.17M	-11.98M	-3.98M	-2.69M	-2.17M
Balance Sheet
Total Assets	16.27M	14.09M	17.13M	13.05M	10.51M
Cash, Cash Equivalents and Short-Term Investments	79.00K	8.11M	4.13M	573.00K	788.00K
Total Debt	529.00K	530.00K	866.00K	1.98M	1.81M
Total Liabilities	2.43M	1.83M	1.84M	3.05M	2.61M
Stockholders Equity	15.85M	14.17M	16.34M	10.94M	8.79M
Cash Flow
Free Cash Flow	-13.28M	-5.31M	-3.73M	-4.58M	-5.18M
Operating Cash Flow	-2.64M	-2.77M	-2.85M	-1.87M	-2.76M
Investing Cash Flow	-10.64M	-2.54M	-879.00K	-2.71M	-2.42M
Financing Cash Flow	5.25M	9.31M	7.63M	4.32M	5.85M

Rainbow Rare Earths Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.11
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RBW, the sentiment is Negative. The current price of 0.11 is below the 20-day moving average (MA) of 11.09, below the 50-day MA of 11.29, and below the 200-day MA of 11.38, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 48.71 is Neutral, neither overbought nor oversold. The STOCH value of 70.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:RBW.

Rainbow Rare Earths Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ECOR	66 Neutral	£156.89M	9.71	-2.05%	187.35%	-5.97%	-1292.31%
RBW	50 Neutral	£72.41M	―	-27.69%	―	―	66.85%
KOD	48 Neutral	£71.39M	2.51	47.34%	―	―	―
ALL	47 Neutral	£46.79M	―	-21.55%	―	―	41.32%
Sector *	44 Neutral	C$992.05M	-6.72	-13.73%	2.53%	17.45%	-32.50%
SAV		£79.67M	―	-13.18%	―	―	―
PRE		£180.10M	―	-10.18%	―	―	―

Rainbow Rare Earths Corporate Events

Rainbow Rare Earths Reports Strong Interim Results, Highlights Strategic Phalaborwa Project

Rainbow Rare Earths has announced its interim results for the six months ending December 2024, highlighting the strategic importance of its Phalaborwa project in South Africa. The project is expected to be the highest margin rare earth project outside China, benefiting from low operating costs and strong economic metrics, including a post-tax NPV of $611 million. The U.S. government has recognized Phalaborwa as a critical source of rare earth elements, providing a $50 million funding commitment. Despite current weak pricing in the rare earth market, Rainbow’s projects offer a resilient and ethical supply chain solution, positioning the company strongly amidst global geopolitical tensions and the push for decarbonization.