Foraco International (FAR) AI Stock Analysis

• Market Cap: C$181.48M
• Dividend Yield: 3.26%
• Average Volume (3M): 102.33K
• Price to Earnings (P/E): 6.4
• Beta (1Y): 0.87
• Revenue Growth: -22.18%
• EPS Growth: -32.05%
• Country: CA
• Employees: 1,950
• Sector: Basic Materials
• Sector Strength: 73
• Industry: Industrial Materials
• EPS (TTM): 0.02
• Shares Outstanding: 98,629,300
• 10 Day Avg. Volume: 51,026
• 30 Day Avg. Volume: 102,327
• PEG Ratio: -0.12
• Price to Book (P/B): 1.68
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.28
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 0.15
• Enterprise Value/Gross Profit: 3.44
• Enterprise Value/Ebitda: 0.73
• 1Y Price Target: C$2.00
• Price Target Upside: 8.70% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 68 Neutral
• Price Target: C$2.00 ▲(8.70%Upside)

Foraco International's overall stock score reflects solid valuation and stable financial performance, tempered by mixed technical indicators and recent corporate challenges. The attractive P/E ratio and dividend yield are key strengths, but declining revenue and moderate leverage present risks. Recent strategic adjustments highlight ongoing adaptability but also underline existing challenges.

Foraco International Business Overview & Revenue Model

Company Description

Foraco International (FAR) is a global drilling services company that provides a wide range of drilling solutions to the mining and water industries. The company specializes in mineral and water drilling services, offering core drilling, reverse circulation, directional drilling, and other specialized drilling techniques. With a presence in multiple countries, Foraco International serves a diverse clientele including mining companies, governmental agencies, and international organizations, positioning itself as a leader in the drilling services sector.

How the Company Makes Money

Foraco International generates revenue primarily through the provision of drilling services to the mining and water sectors. The company's key revenue streams include contracts with mining companies for exploration and production drilling, as well as projects with governmental and international agencies for water drilling services. Foraco's extensive fleet of drilling rigs, technical expertise, and global reach enable it to secure long-term contracts and partnerships, contributing significantly to its earnings. Additionally, the company's focus on safety, innovation, and environmental sustainability helps it maintain competitive advantages and attract a diverse range of clients.

Foraco International Financial Statement Overview

Summary

Foraco International exhibits a stable financial position with consistent cash generation and profitability, despite a recent decline in revenue growth. Strong profit margins and ROE contribute positively, but moderate leverage requires careful 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	271.37M	293.45M	370.09M	330.56M	269.69M	207.12M
Gross Profit	53.97M	63.06M	93.86M	71.27M	46.82M	38.23M
EBITDA	48.73M	59.91M	86.30M	67.08M	77.63M	35.24M
Net Income	20.51M	27.81M	28.71M	19.76M	35.49M	7.66M
Balance Sheet
Total Assets	235.64M	226.02M	279.73M	249.54M	228.79M	227.76M
Cash, Cash Equivalents and Short-Term Investments	21.84M	24.36M	34.29M	29.41M	23.92M	20.96M
Total Debt	91.35M	85.31M	99.49M	105.57M	109.66M	162.61M
Total Liabilities	147.01M	142.71M	181.67M	174.05M	166.26M	209.96M
Stockholders Equity	82.91M	77.50M	85.92M	65.19M	55.98M	12.93M
Cash Flow
Free Cash Flow	22.26M	10.36M	29.08M	17.39M	10.43M	17.20M
Operating Cash Flow	38.23M	29.23M	55.22M	37.43M	29.02M	30.52M
Investing Cash Flow	-15.97M	-18.87M	-26.14M	-20.04M	-18.59M	-13.32M
Financing Cash Flow	-18.49M	-18.75M	-23.94M	-10.68M	-7.80M	-11.94M

Foraco International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.84
• 50DMA: Positive
• 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 Negative. The current price of 1.84 is below the 20-day moving average (MA) of 1.88, above the 50-day MA of 1.81, and below the 200-day MA of 2.08, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 50.18 is Neutral, neither overbought nor oversold. The STOCH value of 55.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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$169.32M	9.49	10.72%	―	27.28%	―
OGD	73 Outperform	C$62.01M	9.83	9.73%	―	2.55%	―
FAR	68 Neutral	C$181.48M	6.42	24.45%	3.26%	-22.18%	-32.05%
VOY	48 Neutral	C$17.01M	53.06	22.93%	―	―	―
Sector *	44 Neutral	C$979.29M	-6.67	-13.73%	2.43%	17.55%	-32.57%
WM	39 Underperform	C$71.49M	―	-3.20%	―	―	9.09%

Foraco International Corporate Events

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.

Foraco International Reports Decline in Q1 2025 Revenue Amid Strategic Adjustments

Foraco International reported a decline in revenue and profitability for Q1 2025, with revenue totaling US$55.0 million compared to US$77.1 million in Q1 2024. The decline was attributed to client-driven delays in contract awards, strategic exits from unstable regions, and unfavorable foreign exchange impacts. Despite these challenges, the Asia Pacific region and the Water division showed strong performance, with significant revenue increases. The company maintained financial discipline by reducing SG&A expenses and limiting capital expenditures, while continuing to adapt its cost structure to market conditions.

Foraco International to Announce Q1 2025 Financial Results

Foraco International SA announced it will release its first quarter 2025 financial results on April 30, 2025, before the TSX market opens. A conference call hosted by CEO Tim Bremner and CFO Fabien Sevestre will follow to discuss the results, providing stakeholders with insights into the company’s financial performance and strategic direction.

Foraco International Elects Directors and Declares Nil Dividend for 2024

Foraco International announced the election of its directors at the recent general meeting of shareholders, with all director nominees successfully elected. The meeting also resulted in a decision to declare a nil dividend for the 2024 fiscal year, reflecting strategic financial management and potentially impacting shareholder returns.