Foraco International (FAR) AI Stock Analysis

• Market Cap: C$169.64M
• Dividend Yield: 3.49%
• Average Volume (3M): 54.23K
• Price to Earnings (P/E): 6.4
• Beta (1Y): 0.95
• Revenue Growth: -19.84%
• EPS Growth: -34.63%
• Country: CA
• Employees: 1,950
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): 0.09
• Shares Outstanding: 98,629,300
• 10 Day Avg. Volume: 73,923
• 30 Day Avg. Volume: 54,233
• PEG Ratio: -1.72
• Price to Book (P/B): 2.13
• Price to Sales (P/S): 0.56
• P/FCF Ratio: 15.96
• 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: C$2.00
• Price Target Upside: 14.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 60 Neutral
• Price Target: C$1.50 ▼(-14.29% Downside)

Foraco International's stock score is primarily influenced by financial challenges, including declining revenue and high leverage. However, the attractive valuation offers potential upside, and recent corporate events provide strategic benefits. Technical indicators suggest caution due to bearish momentum.

Foraco International Business Overview & Revenue Model

Company Description

Foraco International SA, together with its subsidiaries, provides drilling services worldwide. It operates through two segments: Mining and Water. The company offers its drilling services to the mining and energy industry, such as exploration, development, and production related underground water drilling services. It also drills wells for drinking, irrigation, industrial water, and dewatering wells; and undertakes a range of projects, including village water drilling programs, specialized drilling projects to access mineral water using sanitary protection methods, and large diameter well fields for residential supply in urban environments, as well as provides inspection, servicing, and rehabilitation services for existing wells. As of December 31, 2021, the company operated 302 drill rigs, including 62 rotary drilling rigs, 190 core diamond drilling rigs, 18 combination rigs, and 32 underground rigs. It serves mining companies, governmental organizations, and international development funds. The company was founded in 1961 and is headquartered in Marseille, France.

How the Company Makes Money

Foraco International makes money primarily through the provision of drilling services for the mining and water sectors. The company generates revenue by entering into contracts with mining companies and governmental bodies that require exploration and production drilling services. Key revenue streams include mineral drilling, where Foraco offers services such as exploration, development, and production drilling for various minerals, and water drilling, where services include drilling for water wells and geothermal energy. Significant partnerships with major mining companies and adherence to long-term contracts contribute to stable earnings, as these arrangements often involve multi-year projects and recurring services. Additionally, the company's focus on technology and innovation helps in maintaining competitive pricing and securing projects globally.

Foraco International Financial Statement Overview

Summary

Foraco International exhibits a stable financial position with consistent cash generation and profitability. While revenue growth has been challenging, the company maintains solid profit margins and a strong ROE. The balance sheet is moderately leveraged, which, while manageable, requires careful oversight. Overall, the company's financial health appears balanced, with strengths in profitability and cash flow management.

Income Statement

Foraco International has shown consistent revenue generation with a slight decrease in the TTM compared to 2024. The gross profit margin for TTM is 19.88%, and the net profit margin is 7.56%, indicating a moderate level of profitability. The EBIT and EBITDA margins are healthy at 12.09% and 17.96% respectively. However, the revenue growth rate has been negative from 2024 to TTM, suggesting a decline in sales.

Balance Sheet

The company's debt-to-equity ratio is 1.10, indicating a moderate level of leverage. The return on equity (ROE) is robust at 24.74%, reflecting efficient use of equity to generate profits. The equity ratio stands at 35.19%, showing a reasonable level of equity financing. However, the relatively high level of debt could pose a risk if not managed properly.

Cash Flow

Operating cash flow has been strong with a notable increase in TTM compared to 2024. The free cash flow to net income ratio is 1.09, suggesting good cash conversion. However, free cash flow growth is substantial, indicating effective cash management and investment strategies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	262.55M	293.45M	370.09M	330.56M	269.69M	207.12M
Gross Profit	50.18M	63.06M	93.86M	71.27M	46.82M	38.23M
EBITDA	46.94M	59.91M	86.30M	67.08M	77.63M	35.24M
Net Income	19.09M	27.81M	28.71M	19.76M	35.49M	7.66M
Balance Sheet
Total Assets	251.31M	226.02M	279.73M	249.54M	228.79M	227.76M
Cash, Cash Equivalents and Short-Term Investments	20.77M	24.36M	34.29M	29.41M	23.92M	20.96M
Total Debt	97.32M	85.31M	99.49M	105.57M	109.66M	162.61M
Total Liabilities	154.69M	142.71M	181.67M	174.05M	166.26M	209.96M
Stockholders Equity	91.68M	77.50M	85.92M	65.19M	55.98M	12.93M
Cash Flow
Free Cash Flow	12.98M	10.36M	29.08M	17.39M	10.43M	17.20M
Operating Cash Flow	31.65M	29.23M	55.22M	37.43M	29.02M	30.52M
Investing Cash Flow	-18.67M	-18.87M	-26.14M	-20.04M	-18.59M	-13.32M
Financing Cash Flow	-15.42M	-18.75M	-23.94M	-10.68M	-7.80M	-11.94M

Foraco International Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.75
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FAR, the sentiment is Neutral. The current price of 1.75 is above the 20-day moving average (MA) of 1.75, below the 50-day MA of 1.78, and below the 200-day MA of 2.03, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 50.38 is Neutral, neither overbought nor oversold. The STOCH value of 53.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:FAR.

Foraco International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GEO	82 Outperform	C$177.81M	9.76	10.72%	―	27.28%	―
OGD	73 Outperform	C$58.25M	9.04	9.73%	―	2.55%	―
FAR	60 Neutral	C$169.64M	6.43	21.84%	3.49%	-19.84%	-34.63%
VOY	48 Neutral	C$24.41M	153.06	12.75%	―	―	―
Sector *	44 Neutral	AU$1.47B	-5.90	-41.17%	4.23%	-3.35%	-41.14%
WM	39 Underperform	C$76.99M	―	-3.20%	―	―	9.09%
DLPRF	―	$39.10M	―	-271.21%	―	―	―

Foraco International Corporate Events

Foraco International Reports Q2 2025 Results Amid Regional Revenue Shifts

Foraco International reported a decrease in revenue for Q2 2025 to US$69.1 million from US$77.9 million in Q2 2024, attributed to program discontinuations and delays in North and South America. Despite these challenges, the company achieved growth in the Asia Pacific and EMEA regions, driven by new contracts and strong operational performance. The company maintained solid profitability through cost discipline, with a focus on aligning its portfolio with high-potential regions and segments. Foraco’s strategic investments in proprietary rigs and fleet modernization are aimed at sustaining future growth, despite a negative free cash flow due to capital expenditures for new deployments.

The most recent analyst rating on (TSE:FAR) stock is a Buy with a C$4.25 price target. To see the full list of analyst forecasts on Foraco International stock, see the TSE:FAR Stock Forecast page.

Foraco International to Announce Q2 2025 Financial Results

Foraco International SA announced it will release its second quarter 2025 financial results on July 31, 2025, before the TSX market opens. Following the release, a conference call will be hosted by the company’s CEO and CFO to discuss the results, providing stakeholders an opportunity to gain insights into the company’s financial performance and strategic direction.

The most recent analyst rating on (TSE:FAR) stock is a Buy with a C$4.25 price target. To see the full list of analyst forecasts on Foraco International stock, see the TSE:FAR Stock Forecast page.

Foraco Secures $34 Million Drilling Contract with Glencore in Chile

Foraco International has secured a three-year, $34 million contract with Glencore for drilling services at the Lomas Bayas mine in Chile. This contract will enhance Foraco’s regional presence and underscores its strategic importance in Chile, reflecting strong relationships with major clients and aligning with high copper and gold market prices.

The most recent analyst rating on (TSE:FAR) stock is a Buy with a C$4.25 price target. To see the full list of analyst forecasts on Foraco International stock, see the TSE:FAR Stock Forecast page.

Foraco International Strengthens Leadership with New VP Appointment

Foraco International has announced the appointment of Enrick Tremblay as Vice President, Canada, enhancing its senior management team. Tremblay’s extensive experience in mineral exploration and his understanding of industry demands are expected to strengthen Foraco’s leadership and operational strategy, aligning with industry best practices and enhancing service excellence.