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Lynas Rare Earths Limited Sponsored ADR (LYSDY)
OTHER OTC:LYSDY
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Lynas Rare Earths Limited Sponsored ADR
(OTC:LYSDY)
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Rating:56Neutral
Price Target:
$14.00
▲(46.75% Upside)
Action:ReiteratedDate:02/28/26
The score is weighed down primarily by weakening profitability and cash flow despite a strong balance sheet. Technicals are supportive with clear trend strength, but overbought signals temper the outlook. Valuation is the largest constraint given the very high P/E, while the earnings call adds modest support from strategic progress and production milestones amid acknowledged profit pressure and project uncertainty.
Positive Factors
Conservative balance sheet
A very low debt-to-equity ratio gives Lynas durable financial flexibility across commodity cycles. Conservative leverage reduces refinancing risk, supports funding for strategic projects and capex, and preserves optionality to pursue downstream expansion without immediate reliance on distressed financing.
Strategic market position vs China
Breaking China’s monopoly on heavy rare earths establishes a durable competitive advantage. As a trusted non‑Chinese supplier, Lynas secures strategic customers and government engagement, improving long‑term demand visibility and potential premium access into security‑sensitive supply chains worldwide.
Scale & long mine life
Completed capital works, record output and >20 years of mine life create lasting operating scale. This capacity underpins multi‑year contract supply, supports downstream beneficiation plans, and amortizes past capex over higher volumes, strengthening durable revenue potential and market share.
Negative Factors
Severe margin deterioration
A collapse in net margin reflects sustained pressure from lower realised prices and rising non‑cash D&A from new assets. Persistently thin margins reduce retained earnings, limit reinvestment capacity, and make returns highly sensitive to commodity price cycles and cost inflation over the medium term.
Weak cash generation
Declining operating cash flow and negative FCF growth constrain the company’s ability to self‑fund growth and absorb price shocks. Ongoing weak cash generation increases dependence on external financing for capex and working capital, raising execution risk for multi‑year expansion plans.
Project & funding uncertainty
Reliance on a capital raise and unresolved Seadrift project details create execution and dilution risk. If funding terms are unfavorable or projects face delays, expected downstream capacity gains and strategic benefits may be postponed or impaired, undermining projected long‑term returns.
Lynas Rare Earths Limited Sponsored ADR (LYSDY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.28B
Dividend YieldN/A
Average Volume (3M)N/A
Price to Earnings (P/E)256.2
Beta (1Y)0.30
Revenue Growth18.52%
EPS Growth-90.56%
CountryUS
Employees1,102
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.06
Shares Outstanding1,006,502,560
10 Day Avg. VolumeN/A
30 Day Avg. VolumeN/A
Financial Highlights & Ratios
PEG Ratio-11.17
Price to Book (P/B)3.44
Price to Sales (P/S)14.90
P/FCF Ratio-24.75
Enterprise Value/Market Cap1.31
Enterprise Value/Revenue26.41
Enterprise Value/Gross Profit95.76
Enterprise Value/Ebitda102.05
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.23
Revenue Forecast (FY)$784.84M
Lynas Rare Earths Limited Sponsored ADR Business Overview & Revenue Model
Company DescriptionLynas Rare Earths Limited, together with its subsidiaries, engages in the exploration, development, mining, extraction, and processing of rare earth minerals primarily in Australia and Malaysia. The company holds an interest in the Mount Weld project, Western Australia. Its products include neodymium and praseodymium, lanthanum, cerium, and mixed heavy rare earth materials. The company also develops and operates advanced material processing and concentration plants. In addition, it offers corporate services. The company was formerly known as Lynas Corporation Limited and changed its name to Lynas Corporation Limited in November 2020. Lynas Rare Earths Limited was founded in 1983 and is headquartered in East Perth, Australia.
How the Company Makes MoneyLynas generates revenue primarily through the sale of rare earth products, including neodymium, praseodymium, and other rare earth oxides. The company has established a strong customer base in sectors such as automotive, electronics, and clean energy, which rely on these materials for their products. Key revenue streams include long-term supply contracts with major manufacturers, spot market sales, and partnerships with companies looking to secure rare earth supplies. Additionally, Lynas benefits from favorable pricing dynamics in the rare earth market, driven by increasing demand and supply chain constraints, which enhance its profitability.
Lynas Rare Earths Limited Sponsored ADR Earnings Call Summary
Earnings Call Date:Mar 04, 2026
(Q2-2026)
| Next Earnings Date:Sep 02, 2026
Earnings Call Sentiment Positive
The briefing presented substantial positive developments: strong NdPr price momentum (moving from US$49/kg to US$74/kg in a year and then to >US$110/kg), successful commissioning of major capital projects (Mt Weld expansion and hybrid power station), stable Malaysia operations with HRE separation and a funded path for the announced HRE expansion (~US$180m), and a strengthened balance sheet with >US$1bn in cash. Key challenges remain: Kalgoorlie’s ramp‑up and external power disruptions constrained near‑term volumes, some process bottlenecks persist, G&A and depreciation increased (A$20–25m impact cited), and there are ongoing regulatory and supply‑chain risks to monitor. Overall, the positive operational and market progress and strong financial position outweigh the operational setbacks and risks, but continued execution at Kalgoorlie and supply‑chain/regulatory management are critical.Q2-2026 Updates
Positive Updates
Strong NdPr pricing momentum
NdPr benchmark price rose from US$49/kg in Dec 2024 to US$74/kg in Dec 2025 (+51% year‑on‑year) and has since firmed to over US$110/kg (a further ~+49% from Dec 2025 and ~+124% vs Dec 2024), providing a material market tailwind to revenue and margins.
Mt Weld expansion largely commissioned
Mt Weld expansion has been largely commissioned with the new flotation circuit operating at ~70% of nameplate capacity; project commissioning milestones achieved and remaining capital roll‑off beginning as Lynas moves from capex into operations.
Hybrid renewable power station operational and exceeding targets
65 MW hybrid power station (4 wind turbines, ~2,500 solar panels, gas back‑up and batteries) is operational; December generation was ~92% renewable (vs initial target of 70%), materially lowering variable electricity costs compared with prior diesel power.
Malaysia separation and HRE capability ramping
Lynas completed its first full six months of HRE (dysprosium and terbium) separation in Malaysia; separation circuits are stable and producing, samarium expected before year‑end, and a new Heavy Rare Earths facility in Malaysia was announced (US$180m investment disclosed).
Balance sheet strengthened by capital raise
Equity raise left the company with over US$1 billion (or >$1bn) in cash and short‑term deposits, providing funding for ‘Towards 2030’ initiatives and flexibility for project spending or shareholder returns.
Safety and major maintenance execution
Major maintenance in Malaysia involved >100,000 work hours and 30+ subcontractors and was executed to schedule without injury; Mt Weld and Kalgoorlie employees recorded 12 months without any recordable injuries as of Dec 2025.
Operational throughput roadmap and upcoming capacity
Company targeting 10.5 ktpa NdPr (c.30 t/day) as the near‑term production objective; current heavy‑element circuit capacity ~1,500 t throughput with planned new HRE facility designed for ~5,000 t throughput, showing clear capacity growth pathway.
Provisional pricing and working capital tailwind
Provisional pricing tailwind of approximately US$20 million in the half (positive impact on reported revenue ahead of cash collection), with typical 2–3 month lag from invoicing to final pricing/cash realization for modeling.
Negative Updates
Kalgoorlie power disruptions and ramp‑up delays
Kalgoorlie experienced significant external power disruptions in Q2 that interrupted the carbonation/processing circuit and set back NdPr production — NdPr production was on track for a record 6 months but fell slightly short due to these issues; short‑term run‑rate cited at ~8–9 ktpa with 10.5 ktpa the target once Kalgoorlie ramp‑up and feed consistency are achieved.
Ongoing bottlenecks at Kalgoorlie (process optimization required)
As the carbonation circuit and other new processes were ramped, bottlenecks shifted and required further process modifications; Kalgoorlie not yet at desired steady‑state performance and remains the main operational constraint on near‑term volume.
Higher G&A and rising depreciation
General & administrative expenses and unabsorbed costs increased materially; management attributed about A$20–25 million of the half’s increase to not‑yet‑absorbed depreciation and employment charges related to Kalgoorlie. Depreciation expense expected to be higher in the second half as recently commissioned assets move into full depreciation.
License timing uncertainty (LAMP) and regulatory process
LAMP license was approaching expiry at the time of the call and, while management expects renewal and reported a favourable Atomic Energy Department audit rating, the transitional licensing environment introduced timing uncertainty that required close monitoring.
Supply‑chain and reagent risk (China exposure)
Management acknowledged potential risks from China‑sourced reagents, SX chemicals and equipment; while contingency plans and alternate suppliers have been put in place, the risk remains a factor for planned ionic‑clay operations and some downstream processes.
Revenue vs cash timing differences and working capital
Revenue beat cash receipts in the half due to increased receivables and inventory (provisional pricing and invoicing timing), meaning near‑term cash generation lags reported revenue until provisional pricing and inventory tolled through the supply chain (typical 2–3 month impact to pricing and a further ~3 months to cash realization).
Company Guidance
Guidance from the call reiterated a near‑term ramp to ~10.5 ktpa NdPr (≈30 t/day) with short‑term volumes expected around 8–9 ktpa and a planned step to ~12 ktpa over time (with a previously disclosed +2.4 ktpa concentrator uplift possible); Mt Weld expansion is largely commissioned (new flotation operating at ~70% of nameplate, 3 new mills) and the 65 MW hybrid power station is operational (December renewable content ~92% vs 70% target), water‑recycle target is 90% (tailings ~7–7.5% RE), Kalgoorlie cracking/leach plant has a current circuit throughput of ~1,500 tpa while the announced Malaysian HRE facility will target 5,000 tpa (A$180m announced for that plant) and is expected ~end‑CY2027, samarium is expected before FY end; prices have strengthened (NdPr US$74/kg Dec‑25 vs US$49/kg Dec‑24 and recently >US$110/kg), driving a ~US$20m provisional pricing tailwind in H1, cash/short‑term deposits exceed US$1bn after the equity raise, FY26 capex was guided ~A$160m, total capital in main projects ≈A$1.35bn (Kal ≈A$800m; Mt Weld ≈A$550m) with ~A$100–200m still to be capitalized, and receivable/provisional pricing impacts typically lag 2–3 months.Lynas Rare Earths Limited Sponsored ADR Financial Statement Overview
Summary
Mixed fundamentals: revenue returned to growth (+12.4%), and the balance sheet is conservatively levered (debt-to-equity 0.086). Offsetting this, profitability has deteriorated sharply (net margin down to 1.5% from 58.8% in 2022) and cash flow quality is weak with declining operating cash flow and negative free cash flow growth (-22.3%).Income Statement
Lynas Rare Earths Limited has shown a mixed performance in its income statement. The company experienced a revenue growth rate of 12.4% in the most recent year, indicating a positive trend after a decline in previous years. However, profitability margins have significantly decreased, with the net profit margin dropping from 58.8% in 2022 to 1.5% in 2025. This decline in profitability is a concern, despite the positive revenue growth.55
Neutral
Balance Sheet
The balance sheet of Lynas Rare Earths Limited reflects a stable financial position with a low debt-to-equity ratio of 0.086, indicating conservative leverage. The equity ratio is strong, and the company maintains a positive return on equity, although it has decreased over the years. The company's financial stability is a positive aspect, but the declining ROE suggests potential inefficiencies in generating returns from equity.70
Positive
Cash Flow
The cash flow statement reveals challenges, with negative free cash flow growth and a negative free cash flow to net income ratio. Operating cash flow is positive but has decreased significantly compared to previous years, indicating potential liquidity issues. The negative free cash flow growth rate of -22.3% is concerning and suggests the company may face difficulties in funding operations and investments without external financing.40
Negative
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 708.30M | 542.66M | 464.45M | 787.12M | 920.01M | 489.02M |
| Gross Profit | 195.33M | 179.21M | 184.46M | 440.95M | 601.26M | 266.59M |
| EBITDA | 183.29M | 116.30M | 171.17M | 413.57M | 605.60M | 238.12M |
| Net Income | 80.88M | 7.99M | 84.51M | 310.67M | 540.82M | 157.08M |
Balance Sheet | ||||||
| Total Assets | 3.99B | 2.94B | 2.80B | 2.64B | 2.06B | 1.48B |
| Cash, Cash Equivalents and Short-Term Investments | 1.03B | 166.49M | 523.84M | 1.01B | 965.58M | 680.83M |
| Total Debt | 286.00M | 202.05M | 183.98M | 190.62M | 192.14M | 174.97M |
| Total Liabilities | 629.90M | 591.51M | 562.12M | 475.27M | 416.02M | 394.17M |
| Stockholders Equity | 3.36B | 2.35B | 2.24B | 2.16B | 1.65B | 1.08B |
Cash Flow | ||||||
| Free Cash Flow | -22.36M | -326.66M | -544.38M | -208.76M | 273.77M | 174.62M |
| Operating Cash Flow | 141.45M | 104.17M | 34.96M | 386.75M | 460.07M | 215.06M |
| Investing Cash Flow | -540.75M | -406.19M | -507.22M | -554.50M | -83.60M | -138.26M |
| Financing Cash Flow | 854.19M | -45.30M | -22.54M | 199.00M | -13.81M | 405.59M |
Lynas Rare Earths Limited Sponsored ADR Technical Analysis
Positive
9.54
Price Trends
10.29
Positive
10.33
Positive
8.95
Positive
Market Momentum
0.70
Negative
76.68
Negative
100.09
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LYSDY, the sentiment is Positive. The current price of 9.54 is below the 20-day moving average (MA) of 11.28, below the 50-day MA of 10.29, and above the 200-day MA of 8.95, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 76.68 is Negative, neither overbought nor oversold. The STOCH value of 100.09 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LYSDY.
Lynas Rare Earths Limited Sponsored ADR Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $4.55B | -8.31 | -255.91% | ― | ― | ― | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
57 Neutral | $2.64B | -8.34 | ― | ― | ― | -111.94% | |
56 Neutral | $14.28B | 256.19 | 0.34% | ― | 18.52% | -90.56% | |
54 Neutral | $11.32B | -123.01 | -4.98% | ― | 26.44% | -95.87% | |
49 Neutral | $1.65B | -42.22 | -49.09% | ― | ― | -18.77% |
* Basic Materials Sector Average
LYSDY
Lynas Rare Earths Limited Sponsored ADR
14.12
9.73
221.70%
MP
MP Materials
63.73
41.28
183.88%
TMC
TMC the metals company Inc.
6.38
4.70
279.76%
CRML
Critical Metals Corp
10.82
8.54
374.56%
IPX
Iperionx Ltd. ADR
50.47
27.82
122.83%
USAR
USA Rare Earth
20.87
9.85
89.38%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.