Eureka Lithium (ERKA) AI Stock Analysis

• Market Cap: C$4.42M
• Dividend Yield: N/A
• Average Volume (3M): 33.75K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.34
• Revenue Growth: N/A
• EPS Growth: 93.17%
• Country: CA
• Employees: N/A
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): -0.02
• Shares Outstanding: 22,114,395
• 10 Day Avg. Volume: 9,123
• 30 Day Avg. Volume: 33,752
• PEG Ratio: <0.01
• Price to Book (P/B): 0.19
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -0.32
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 40 Underperform
• Price Target: C$0.19 ▼(-5.00% Downside)

The score is primarily constrained by very weak financial performance (pre-revenue, large ongoing losses, and sustained cash burn). Technicals add modest downside bias given the downtrend versus key moving averages and negative MACD. Valuation provides limited support due to a negative P/E and no dividend information.

Positive Factors

Debt-Free Balance Sheet

Having no debt provides financial flexibility and reduces the risk of insolvency, allowing the company to focus on growth and strategic initiatives without the pressure of interest payments.

Improved Cash Burn

Improvement in cash burn indicates better cash management and operational efficiency, which could lead to a more sustainable financial position if the trend continues.

Smaller Net Loss

A reduction in net loss suggests the company is moving towards financial stability, potentially paving the way for future profitability if cost controls and revenue generation strategies are effectively implemented.

Negative Factors

No Revenue Generation

The absence of revenue generation indicates a lack of market penetration and product adoption, which is critical for achieving profitability and sustaining operations in the long term.

Shrinking Equity and Assets

Declining equity and assets reflect ongoing financial losses and could limit the company's ability to invest in growth opportunities, potentially impacting its competitive position.

Consistently Negative Cash Flow

Persistent negative cash flow indicates the company is not generating sufficient cash from operations, necessitating external funding to sustain operations, which may not be sustainable long-term.

Eureka Lithium Business Overview & Revenue Model

Company Description

Eureka Lithium Corp., a junior mining company, engages in the acquisition, exploration, and development of mineral properties in Canada. It has an option to acquire a 75% interest in the North McKinney property comprises five mineral claims totaling 1,289 hectares located on the southeast slope of Mt. Baldy in southern British Columbia. The company was formerly known as Scout Minerals Corp. and changed its name to Eureka Lithium Corp. in June 2023. The company was incorporated in 2021 and is headquartered in Vancouver, Canada.

How the Company Makes Money

Eureka Lithium makes money through the exploration and development of lithium resources, which are critical components in the production of batteries for electric vehicles and renewable energy storage. The company generates revenue by identifying promising lithium deposits, acquiring rights to these resources, and either developing them into productive mining operations or selling the rights to larger mining companies. Key revenue streams include the sale of lithium ore, collaboration agreements with major industry players for resource development, and potential government incentives for contributing to clean energy initiatives. Strategic partnerships and joint ventures with established mining and technology companies also play a significant role in enhancing the company's financial performance.

Eureka Lithium Financial Statement Overview

Summary

Eureka Lithium is in a developmental stage with no revenue generation, resulting in persistent losses and negative cash flows. The company maintains a debt-free balance sheet, which is a positive aspect in terms of financial stability. However, the lack of revenue and cash flow issues pose significant risks to sustainability without external funding or revenue breakthroughs.

Income Statement

Eureka Lithium has no revenue over the analyzed periods, resulting in negative EBIT, EBITDA, and net income. The company's financial performance is characterized by consistent operating losses, indicating a challenging operational environment typical for early-stage or pre-revenue industrial materials companies.

Balance Sheet

Eureka Lithium's balance sheet shows a strong equity position with zero debt, indicating a conservative capital structure. However, the company's total assets have declined, and the equity ratio has decreased over the TTM. The absence of debt reduces financial risk, but the trend of declining asset base could be concerning if it continues.

Cash Flow

The company has negative operating cash flow, reflecting ongoing operational challenges. The free cash flow is also negative, primarily due to operating losses, though financing activities provide some liquidity. The significant decrease in operating cash flow over time highlights cash management concerns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	0.00	0.00	0.00	0.00	0.00
Gross Profit	0.00	0.00	0.00	0.00	0.00
EBITDA	-1.10M	-4.49M	-6.06M	-189.61K	-5.02K
Net Income	-912.73K	-4.37M	-6.06M	-189.61K	-5.02K
Balance Sheet
Total Assets	6.46M	5.99M	10.08M	236.05K	197.09K
Cash, Cash Equivalents and Short-Term Investments	542.87K	41.76K	2.60M	173.55K	197.09K
Total Debt	0.00	0.00	0.00	0.00	0.00
Total Liabilities	138.04K	340.73K	948.17K	68.23K	5.01K
Stockholders Equity	6.32M	5.65M	9.13M	167.82K	192.08K
Cash Flow
Free Cash Flow	-1.65M	-3.39M	-6.50M	-176.65K	-9.00
Operating Cash Flow	-1.65M	-3.39M	-6.44M	-114.15K	-9.00
Investing Cash Flow	0.00	-20.00	-1.26M	-62.50K	0.00
Financing Cash Flow	1.04M	832.48K	10.13M	153.11K	197.10K

Eureka Lithium Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ERKA, the sentiment is Neutral. The current price of 0.2 is below the 20-day moving average (MA) of 0.20, below the 50-day MA of 0.22, and above the 200-day MA of 0.20, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 46.15 is Neutral, neither overbought nor oversold. The STOCH value of 33.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ERKA.

Eureka Lithium Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
ILC	45 Neutral	C$5.37M	3.57	12.49%	―	―	―
ERKA	40 Underperform	C$4.42M	-2.57	-34.14%	―	―	93.17%
SRA	39 Underperform	C$18.92M	34.53	16.97%	―	―	―
MEGA	35 Underperform	C$1.12M	-0.25	-234.41%	―	―	10.75%
LEXI.H	35 Underperform	C$2.41M	-0.29	―	―	―	―
AWCM	33 Underperform	C$9.39M	-4.48	-17.86%	―	―	92.11%