Foraco International (FAR) AI Stock Analysis

• Market Cap: C$245.33M
• Dividend Yield: N/A
• Average Volume (3M): 214.80K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 1.50
• Revenue Growth: -17.73%
• EPS Growth: -36.29%
• Country: CA
• Employees: 1,950
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): 0.08
• Shares Outstanding: 98,525,000
• 10 Day Avg. Volume: 163,142
• 30 Day Avg. Volume: 214,804
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: C$3.00 ▲(20.48% Upside)

Foraco International's overall stock score is driven by strong technical indicators and recent corporate events that enhance growth prospects. However, financial performance challenges and mixed earnings call results temper the outlook. The stock's attractive valuation provides additional support.

Positive Factors

Long-Term Contract Wins

Securing long-term contracts enhances revenue visibility and stability, supporting future growth and reinforcing client relationships.

Revenue Growth in South America and EMEA

Strong revenue growth in these regions indicates successful market penetration and potential for further expansion, offsetting declines elsewhere.

Operational Efficiency

Reduced SG&A expenses reflect improved operational efficiency, which can help sustain margins and profitability despite revenue pressures.

Negative Factors

Revenue Decline in North America

Significant revenue decline in North America due to contract completion and deferrals poses a risk to overall financial performance.

High Leverage

High leverage increases financial risk and limits flexibility, potentially impacting the company's ability to invest in growth opportunities.

Declining Free Cash Flow

Declining free cash flow growth suggests potential liquidity concerns, which could hinder the company's ability to fund operations and investments.

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 generates revenue primarily through its drilling operations, providing services to mining and exploration companies. Key revenue streams include contracts for drilling services, where clients pay for both the drilling work and associated logistics. The company also earns income from long-term contracts and project-based engagements. Significant partnerships with mining companies and government contracts in mineral-rich regions further bolster its earnings. Additionally, Foraco's focus on operational efficiency and technological innovation helps to optimize costs and improve profit margins, contributing positively to its overall financial performance.

Foraco International Financial Statement Overview

Summary

Foraco International is facing challenges with declining revenue growth and profitability, as indicated by reduced margins and high leverage. Despite operational efficiency, the significant decline in free cash flow growth and high debt levels pose potential risks.

Income Statement

Foraco International's income statement shows a mixed performance. The company has experienced a decline in revenue growth rate, with a negative growth of -3.25% in the TTM period. Margins have also decreased compared to previous years, with the gross profit margin at 19.11% and net profit margin at 7.27% for the TTM. Despite these challenges, the company maintains a positive EBIT margin of 11.57% and EBITDA margin of 17.88%, indicating operational efficiency. However, the declining revenue and margins suggest potential challenges in maintaining profitability.

Balance Sheet

The balance sheet reveals a relatively high debt-to-equity ratio of 1.06 in the TTM, indicating significant leverage. The return on equity (ROE) has decreased to 22.50% in the TTM, reflecting reduced profitability from equity. The equity ratio stands at 36.47%, suggesting a moderate level of equity financing. While the company has improved its debt management compared to previous years, the high leverage remains a potential risk.

Cash Flow

Cash flow analysis indicates a challenging environment with a significant decline in free cash flow growth rate of -41.68% in the TTM. The operating cash flow to net income ratio is 0.37, and the free cash flow to net income ratio is 0.41, both indicating moderate cash generation relative to net income. The decline in free cash flow growth suggests potential liquidity concerns, although the company continues to generate positive operating cash flow.

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: Positive
• Last Price: 2.49
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FAR, the sentiment is Positive. The current price of 2.49 is above the 20-day moving average (MA) of 2.27, above the 50-day MA of 2.19, and above the 200-day MA of 1.96, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 68.12 is Neutral, neither overbought nor oversold. The STOCH value of 83.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FAR.

Foraco International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GEO	76 Outperform	C$183.94M	13.98	7.68%	―	25.76%	15.68%
FAR	73 Outperform	C$245.33M	10.55	18.35%	―	-17.73%	-36.29%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
OGD	60 Neutral	C$53.82M	11.23	7.13%	―	1.04%	107.55%
VOY	48 Neutral	C$27.34M	-4,200.00	-0.90%	―	―	96.77%
WM	39 Underperform	C$109.81M	-9.28	-3.76%	―	―	9.35%

Foraco International Corporate Events

Foraco International Secures $60M Drilling Contracts with Tier-One Gold Producers

Foraco International has secured over US$60 million in long-term drilling contracts with Tier-One gold producers in Nevada, USA. This strategic move enhances Foraco’s presence in the U.S. market and showcases its technical expertise in handling challenging geological conditions, reinforcing its commitment to long-term partnerships in the mining industry.

Foraco International Reports Q3 2025 Financial Results

Foraco International reported a decrease in revenue for Q3 2025, with figures dropping to US$ 71.0 million from US$ 77.7 million in the same quarter of 2024. Despite the revenue decline, the company maintained a resilient gross margin and improved its net debt position. The company is experiencing growth in South America and EMEA regions, while North America saw a decline due to the completion and deferral of Canadian contracts. Foraco remains focused on profitability and future growth, supported by new long-term contracts and a balanced presence in key markets.

Foraco International Secures $150 Million Drilling Contracts in Canada and Chile

Foraco International has secured three long-term drilling contracts worth approximately US$150 million from Tier One mining customers in Canada and Chile. These contracts, which cover a range of drilling services, highlight Foraco’s strategic focus on long-term partnerships in stable jurisdictions and reflect the company’s ability to deliver diverse services at single mine sites. The contracts are expected to strengthen Foraco’s market position amid high copper and gold prices, with mobilization already underway in Chile and extended projects in Canada.

Foraco International Secures $150 Million in Drilling Contracts

Foraco International has secured three long-term drilling contracts valued at approximately US$150 million from Tier One mining customers in Canada and Chile. These contracts, which cover a range of drilling services, reflect Foraco’s strategic focus on long-term partnerships in stable jurisdictions and are supported by strong copper and gold prices.

Foraco International to Announce Q3 2025 Financial Results

Foraco International SA announced it will release its third quarter 2025 financial results on October 30, 2025, before the TSX market opens. A conference call hosted by the company’s CEO and CFO will follow to discuss the results, potentially impacting stakeholders’ understanding of the company’s financial health and market positioning.

Foraco International Launches New Share Buyback Program

Foraco International SA has announced a new normal course issuer bid (NCIB) approved by the Toronto Stock Exchange, allowing the company to repurchase up to 1% of its common shares over the next year. This move is part of Foraco’s strategy to manage its share capital effectively and meet obligations related to employee share plans, potentially impacting its market position and shareholder value.