Foraco International (FAR) AI Stock Analysis

• Market Cap: C$276.86M
• Dividend Yield: N/A
• Average Volume (3M): 214.80K
• Price to Earnings (P/E): 11.9
• Beta (1Y): 1.59
• Revenue Growth: -17.73%
• EPS Growth: -36.29%
• Country: US
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: C$3.00 ▲(20.00% Upside)

Foraco International's overall stock score reflects a balanced view of its financial performance, technical analysis, and valuation. The company's strong cash flow and return on equity are positive, but high leverage and declining margins pose risks. Technical indicators are favorable, suggesting bullish momentum. The valuation is reasonable, though the lack of a dividend yield may deter some investors. The earnings call provided mixed insights, with notable contract wins but also challenges in revenue and margin declines.

Positive Factors

Long-term contract backlog

Securing $150m of long-term contracts provides durable revenue visibility and higher fleet utilization. It supports stable cash flows, underpins capital allocation for new rigs and tech, and reduces short-term bid dependency—strengthening operational planning over the next several quarters.

Free cash flow growth

Sustained 17% free cash flow growth improves financial flexibility, enabling debt reduction, selective capex, and reinvestment in technology. Reliable cash generation in a cyclical industry is a durable strength that supports solvency and strategic investments across market cycles.

Geographic diversification gains

Strong growth in South America and EMEA diversifies revenue away from weaker North American demand. Exposure to multiple mining regions reduces single-market volatility and positions Foraco to capture sector funding upcycles and regional exploration activity over the medium term.

Negative Factors

High leverage

A debt/equity ratio above 1.0 raises refinancing and interest-rate sensitivity in a cyclical drilling business. High leverage can constrain capital allocation, increase vulnerability to revenue slumps, and limit ability to pursue opportunistic investments during downturns.

Margin compression

Declining gross margins and EBITDA reflect pricing pressure and rising costs. Sustained margin compression erodes operating leverage, reduces free cash flow conversion, and limits reinvestment capacity—threatening long-term profitability unless operational efficiencies or pricing power improve.

North America revenue weakness

A near-30% drop in North American revenue highlights concentration and execution risk in a key market. Dependence on episodic Canadian contracts and intense competition undermines predictable growth, making overall company performance sensitive to regional project timing and price cycles.

Foraco International Business Overview & Revenue Model

Company Description

Foraco International (FAR) is a global leader in drilling services, specializing in mineral exploration and water well drilling. With a strong presence in various regions, including North America, South America, Africa, and Europe, the company caters to clients in industries such as mining, energy, and environmental services. Foraco provides comprehensive drilling solutions, including core drilling, reverse circulation drilling, and geotechnical drilling, which are essential for resource exploration and development.

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 demonstrates a mixed financial performance. The income statement shows moderate revenue growth but declining margins, indicating pressure on profitability. The balance sheet highlights high leverage, posing potential risks, although return on equity remains strong. Cash flow is a positive aspect, with growth in free cash flow and adequate cash generation relative to net income. Overall, while there are strengths in cash flow and equity returns, the company faces challenges with profitability and leverage.

Income Statement

Foraco International shows a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) data indicates a gross profit margin of 19.11% and a net profit margin of 7.27%, both of which are slightly below industry averages. Revenue growth is positive at 7.68%, indicating a recovery from the previous year's decline. However, margins have decreased compared to previous years, suggesting pressure on profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.06, indicating significant leverage, which poses a risk in volatile markets. Return on equity is strong at 22.50%, reflecting efficient use of equity. However, the equity ratio is low, suggesting a reliance on debt financing. Overall, the balance sheet shows potential risks due to high leverage.

Cash Flow

Cash flow analysis shows a positive trend with a free cash flow growth rate of 17.37% in the TTM period. The operating cash flow to net income ratio is 0.37, indicating decent cash generation relative to net income. The free cash flow to net income ratio of 0.41 suggests that the company is generating adequate free cash flow to support its net income, although there is room for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	255.03M	293.45M	370.09M	330.56M	269.69M	207.12M
Gross Profit	46.06M	63.06M	93.86M	71.27M	46.82M	38.23M
EBITDA	44.81M	59.91M	86.30M	67.08M	77.63M	35.24M
Net Income	16.68M	27.81M	28.71M	19.76M	35.49M	7.66M
Balance Sheet
Total Assets	257.51M	226.02M	279.73M	249.54M	228.79M	227.76M
Cash, Cash Equivalents and Short-Term Investments	24.88M	24.36M	34.29M	29.41M	23.92M	20.96M
Total Debt	96.92M	85.31M	99.49M	105.57M	109.66M	162.61M
Total Liabilities	155.04M	142.71M	181.67M	174.05M	166.26M	209.96M
Stockholders Equity	97.45M	77.50M	85.92M	65.19M	55.98M	12.93M
Cash Flow
Free Cash Flow	12.61M	10.36M	29.08M	17.39M	10.43M	17.20M
Operating Cash Flow	32.26M	29.23M	55.22M	37.43M	29.02M	30.52M
Investing Cash Flow	-19.79M	-18.87M	-26.14M	-20.04M	-18.59M	-13.32M
Financing Cash Flow	-9.99M	-18.75M	-23.94M	-10.68M	-7.80M	-11.94M

Foraco International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 2.5 is below the 20-day moving average (MA) of 2.53, above the 50-day MA of 2.39, and above the 200-day MA of 2.04, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 78.44 is Negative, neither overbought nor oversold. The STOCH value of 98.23 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
FAR	70 Outperform	C$276.86M	11.90	18.35%	―	-17.73%	-36.29%
GEO	69 Neutral	C$174.50M	13.27	7.68%	―	25.76%	15.68%
OGD	67 Neutral	C$63.29M	13.21	7.13%	―	1.04%	107.55%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
CNC	54 Neutral	C$549.74M	-26.80	-7.85%	―	―	-51.28%
DBG	52 Neutral	C$320.76M	-242.37	-5.12%	―	―	47.32%
AGX	52 Neutral	C$370.07M	-122.73	-6.09%	―	8.28%	87.46%

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.

The most recent analyst rating on (TSE:FAR) stock is a Hold with a C$2.50 price target. To see the full list of analyst forecasts on Foraco International stock, see the TSE:FAR Stock Forecast page.

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.

The most recent analyst rating on (TSE:FAR) stock is a Buy with a C$2.50 price target. To see the full list of analyst forecasts on Foraco International stock, see the TSE:FAR Stock Forecast page.

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.

The most recent analyst rating on (TSE:FAR) stock is a Buy with a C$2.50 price target. To see the full list of analyst forecasts on Foraco International stock, see the TSE:FAR Stock Forecast page.

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.

The most recent analyst rating on (TSE:FAR) stock is a Buy with a C$2.50 price target. To see the full list of analyst forecasts on Foraco International stock, see the TSE:FAR Stock Forecast page.