Mercer International (MERC) AI Stock Analysis

• Market Cap: $213.67M
• Dividend Yield: 9.4%
• Average Volume (3M): 1.13M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.43
• Revenue Growth: -2.16%
• EPS Growth: 44.89%
• Country: US
• Employees: 3,580
• Sector: Basic Materials
• Sector Strength: 66
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -1.29
• Shares Outstanding: 66,982,506
• 10 Day Avg. Volume: 529,983
• 30 Day Avg. Volume: 1,130,336
• PEG Ratio: 0.08
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 73.79
• Enterprise Value/Market Cap: 7.64
• Enterprise Value/Revenue: 0.84
• Enterprise Value/Gross Profit: 13.32
• Enterprise Value/Ebitda: 9.46
• 1Y Price Target: $3.50
• Price Target Upside: 8.36% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 43 Neutral
• Price Target: $3.00 ▼(-7.12% Downside)

Mercer International's overall stock score reflects significant financial challenges, including declining revenues, high leverage, and weak cash flow. Technical indicators suggest bearish momentum, and the valuation is impacted by a negative P/E ratio and suspended dividends. The earnings call further highlighted operational difficulties and trade uncertainties, overshadowing positive liquidity and cost-saving efforts.

Mercer International Business Overview & Revenue Model

Company Description

Mercer International Inc., together with its subsidiaries, manufactures and sells northern bleached softwood kraft (NBSK) pulp in Europe, the United States, Asia, and internationally. The company operates through two segments, Pulp and Wood Products. It also generates and sells green energy produced from biomass cogeneration power plant to third party utilities. In addition, the company manufactures, distributes, and sells lumber and other wood residuals. Further, it produces NBSK pulp primarily from wood chips, pulp logs, and sawlogs; carbon neutral or green energy using carbon-neutral bio-fuels, such as black liquor and wood waste; and tall oil for use as a chemical additive and green energy source. The company sells its pulp to tissue, specialty paper, and printing and writing paper, and other manufacturers; and lumber products to distributors, construction firms, secondary manufacturers, retail yards, and home centers. Mercer International Inc. was founded in 1968 and is headquartered in Vancouver, Canada.

How the Company Makes Money

Mercer International generates revenue primarily through the sale of its wood products, including market pulp, which is used to produce paper and other products, and solid wood products, such as lumber. The company benefits from a diversified customer base, including manufacturers of paper, packaging materials, and construction materials. Key revenue streams include the sale of pulp and timber, as well as related products. In addition, Mercer has established significant partnerships with various stakeholders in the supply chain, allowing them to optimize pricing and distribution. The company's focus on sustainable practices not only attracts environmentally conscious customers but also positions it favorably in a market increasingly driven by sustainability concerns. Fluctuations in global commodity prices, demand for paper products, and housing market trends also significantly impact the company's revenue.

Mercer International Financial Statement Overview

Summary

Mercer International's financial performance is challenged by declining revenue and negative profit margins, with a high debt-to-equity ratio indicating significant leverage. However, improvements in cash flow generation offer some optimism.

Income Statement

The income statement shows declining revenue from the previous year, with a notable decrease in gross profit margin from positive to negative. The net profit margin is also negative, indicating a loss. The EBIT and EBITDA margins have improved slightly in the TTM period compared to the previous year, but still reflect a challenging operating environment.

Balance Sheet

The balance sheet reveals a relatively high debt-to-equity ratio, indicating significant leverage. The equity ratio has decreased over the years, suggesting reduced equity backing for assets. Return on Equity (ROE) is negative due to net losses, raising concerns about profitability. However, total assets have increased, providing some balance sheet stability.

Cash Flow

Cash flow analysis shows a positive free cash flow in the TTM period, an improvement from previous losses, indicating better cash management. Operating cash flow to net income ratio is strong, highlighting efficient cash generation despite net losses. However, free cash flow growth remains a concern due to historical volatility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.95B	2.04B	1.99B	2.28B	1.80B	1.42B
Gross Profit	122.64M	189.36M	-31.86M	498.20M	425.52M	130.60M
EBITDA	172.57M	15.01M	-9.07M	560.96M	478.78M	192.65M
Net Income	-109.26M	-85.14M	-242.06M	247.04M	170.99M	-17.23M
Balance Sheet
Total Assets	2.38B	2.26B	2.66B	2.73B	2.35B	2.13B
Cash, Cash Equivalents and Short-Term Investments	146.50M	184.93M	313.99M	354.03M	345.61M	361.10M
Total Debt	1.55B	1.49B	1.63B	1.36B	1.24B	1.20B
Total Liabilities	1.93B	1.83B	2.03B	1.89B	1.66B	1.53B
Stockholders Equity	446.49M	429.77M	635.41M	838.78M	694.02M	601.03M
Cash Flow
Free Cash Flow	-42.69M	5.89M	-205.33M	181.42M	21.39M	-37.60M
Operating Cash Flow	49.70M	90.20M	-69.00M	360.66M	182.21M	41.56M
Investing Cash Flow	-71.99M	-66.99M	-199.87M	-425.68M	-187.13M	-59.83M
Financing Cash Flow	-90.35M	-152.78M	228.62M	81.97M	-9.50M	26.32M

Mercer International Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MERC, the sentiment is Neutral. The current price of 3.23 is above the 20-day moving average (MA) of 3.12, below the 50-day MA of 3.42, and below the 200-day MA of 4.96, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 48.87 is Neutral, neither overbought nor oversold. The STOCH value of 36.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MERC.

Mercer International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UFPI	72 Outperform	$6.20B	17.24	10.71%	1.33%	-5.09%	-26.13%
SLVM	65 Neutral	$1.80B	8.46	24.37%	3.97%	-4.03%	-5.27%
Sector *	62 Neutral	$10.28B	6.21	0.76%	2.84%	3.10%	-36.03%
CLW	59 Neutral	$353.00M	33.74	-4.36%	―	-26.71%	-329.19%
RYAM	50 Neutral	$379.22M	―	-81.36%	―	-4.90%	-458.80%
MERC	43 Neutral	$213.67M	―	-23.39%	9.40%	-2.16%	44.89%
NWGL	34 Underperform	$21.52M	―	-65.63%	―	―	―

Mercer International Corporate Events

Mercer International Suspends Dividend Amid Market Uncertainties

On July 31, 2025, Mercer International Inc. announced a suspension of its quarterly dividend due to ongoing market uncertainties and a challenging global trade environment. The company’s second quarter results for 2025 showed a negative Operating EBITDA of $20.9 million and a net loss of $86.1 million, impacted by a weaker dollar and reduced pulp demand in China. Mercer is actively implementing cost reduction initiatives and operational efficiency measures to improve profitability, while also focusing on maintaining liquidity and reducing debt amidst the economic challenges.

Mercer International Holds 2025 Shareholders Meeting

Mercer International Inc. held its 2025 Annual Meeting of Shareholders on May 30, 2025, where shareholders voted on several key proposals. All ten nominees for the board of directors were elected, the executive compensation was approved on a non-binding basis, PricewaterhouseCoopers LLP was ratified as the independent public accounting firm, and an amendment to the 2022 Stock Incentive Plan was approved.