Sociedad Quimica Y Minera SA (SQM) AI Stock Analysis

• Market Cap: $11.96B
• Dividend Yield: 0.47%
• Average Volume (3M): 1.49M
• Price to Earnings (P/E): 26.0
• Beta (1Y): 0.71
• Revenue Growth: -23.20%
• EPS Growth: 1226.72%
• Country: US
• Employees: 8,344
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 0.31
• Shares Outstanding: 142,818,910
• 10 Day Avg. Volume: 1,281,005
• 30 Day Avg. Volume: 1,487,764
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 2.99
• Enterprise Value/Gross Profit: 11.16
• Enterprise Value/Ebitda: 13.48
• 1Y Price Target: $48.75
• Price Target Upside: 12.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 65 Neutral
• Price Target: $50.00 ▲(15.34% Upside)

The overall stock score of 65 reflects a balanced view of SQM's current position. The most significant factor is the mixed financial performance, with stable profitability but liquidity concerns. Technical analysis shows a positive trend, providing some optimism. However, the valuation suggests caution due to a high P/E ratio and no dividend yield. The earnings call adds a cautiously optimistic outlook, but it does not significantly alter the score due to its exclusion from the weighted calculation.

Positive Factors

Lithium Market Dynamics

The improvement in lithium market dynamics, driven by strong demand from EV markets, indicates a positive structural trend that can enhance SQM's revenue potential and market position over the long term.

Strategic Partnerships

The completion of the Kwinana refinery through a joint venture with Wesfarmers strengthens SQM's production capabilities and positions it well to meet growing lithium demand, supporting long-term growth.

Operational Efficiency

SQM's ability to maintain robust EBIT and net profit margins reflects strong operational efficiency, which is crucial for sustaining profitability and competitive advantage in the long term.

Negative Factors

Revenue Decline

The decline in revenue due to lower lithium prices highlights vulnerability to commodity price fluctuations, which could impact financial performance and growth prospects if not managed effectively.

Negative Free Cash Flow

Negative free cash flow indicates challenges in cash generation, which could strain liquidity and limit the company's ability to invest in growth opportunities or weather economic downturns.

Delayed Expansion Plans

Delays in expansion plans for Mt. Holland could hinder SQM's ability to capitalize on future growth opportunities in the lithium market, potentially affecting long-term competitive positioning.

Sociedad Quimica Y Minera SA Business Overview & Revenue Model

Company Description

Sociedad Quimica y Minera de Chile S.A. (SQM) is a global leader in the production of specialty fertilizers, iodine, lithium, and other industrial chemicals. The company operates primarily in the mining and chemical sectors, focusing on the extraction and processing of natural resources from its extensive operations in the Atacama Desert in Chile. SQM's core products include lithium carbonate, lithium hydroxide, potassium nitrate, and iodine, which are essential for various industries, including agriculture, electronics, and renewable energy.

How the Company Makes Money

SQM generates revenue through multiple key streams, primarily by selling its specialty fertilizers and lithium products. The demand for lithium, driven by the growth of electric vehicles and renewable energy storage, has become a significant revenue driver for the company. Additionally, SQM earns income from the sale of iodine and potassium nitrate, which are utilized in diverse applications ranging from agriculture to pharmaceuticals. The company has established strategic partnerships with major players in the automotive and technology sectors, enhancing its market position and contributing to its earnings. Furthermore, SQM benefits from its efficient production processes and low-cost operations in the lithium and potassium markets, allowing it to maintain competitive pricing while maximizing profitability.

Sociedad Quimica Y Minera SA Financial Statement Overview

Summary

Sociedad Quimica Y Minera SA showcases solid operational margins and a strong balance sheet with moderate leverage. Despite recent revenue and profit declines, the company maintains healthy cash flow and profitability ratios. Continued focus on improving revenue growth and net income will be essential for sustaining financial strength.

Income Statement

The company shows a strong gross profit margin of 28.12% and an EBIT margin of 22.25% for TTM, indicating good operational efficiency. However, the revenue growth rate is negative compared to previous periods, and net profit margin is reduced at 13.45% due to a decline in net income. EBITDA margin remains healthy at 24.13%, demonstrating stable earnings before non-cash items.

Balance Sheet

The balance sheet reflects a stable equity ratio of 45.73%, suggesting a solid financial base. The debt-to-equity ratio is moderate at 0.90, indicating manageable leverage. Return on equity is strong at 11.47%, showing effective use of equity to generate profits, although a reduction from past years.

Cash Flow

Operating cash flow to net income ratio is positive at 2.22, indicating sound cash generation capability relative to net income. However, free cash flow growth is modest with a TTM increase, and free cash flow to net income ratio is at 0.60, reflecting limited cash available for expansion or dividends.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.23B	4.53B	7.47B	10.71B	2.86B	1.82B
Gross Profit	1.13B	1.33B	3.07B	5.74B	1.09B	482.87M
EBITDA	937.44M	1.17B	3.23B	5.80B	1.13B	516.62M
Net Income	477.51M	-404.36M	2.01B	3.91B	585.45M	164.52M
Balance Sheet
Total Assets	11.52B	11.50B	11.71B	10.82B	7.04B	4.82B
Cash, Cash Equivalents and Short-Term Investments	2.23B	2.44B	2.36B	3.61B	2.42B	854.56M
Total Debt	4.74B	4.82B	4.55B	2.91B	2.61B	1.95B
Total Liabilities	6.13B	6.30B	6.14B	5.89B	3.83B	2.66B
Stockholders Equity	5.35B	5.16B	5.53B	4.90B	3.18B	2.12B
Cash Flow
Free Cash Flow	-75.40M	302.89M	-1.28B	3.00B	357.80M	-140.01M
Operating Cash Flow	889.64M	1.27B	-178.29M	3.91B	822.52M	182.23M
Investing Cash Flow	-537.36M	-1.21B	-1.48B	-909.40M	-1.01B	-167.09M
Financing Cash Flow	189.19M	282.38M	47.91M	-2.00B	1.21B	-94.13M

Sociedad Quimica Y Minera SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 43.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SQM, the sentiment is Positive. The current price of 43.35 is below the 20-day moving average (MA) of 44.37, above the 50-day MA of 41.82, and above the 200-day MA of 38.39, indicating a neutral trend. The MACD of 0.21 indicates Positive momentum. The RSI at 50.42 is Neutral, neither overbought nor oversold. The STOCH value of 42.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SQM.

Sociedad Quimica Y Minera SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EMN	70 Neutral	7.58B	9.27	14.26%	5.03%	1.60%	-3.97%
DD	67 Neutral	32.15B	-164.52	-0.84%	2.10%	4.55%	-130.25%
SQM	65 Neutral	$11.96B	25.98	9.29%	0.47%	-23.20%	1226.72%
AVTR	63 Neutral	8.45B	12.31	10.94%	―	-2.34%	89.86%
PPG	63 Neutral	24.40B	19.21	13.34%	2.54%	-10.59%	-7.79%
ALB	55 Neutral	9.43B	-8.59	-9.08%	2.02%	-33.05%	-97.63%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%