Foraco Int'l SA (TSE:FAR)
TSX:FAR
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Foraco International
(TSX:FAR)
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Rating:56Neutral
Price Target:
C$3.00
▲(20.00% Upside)
Action:Reiterated
Date:05/09/26
The score is held back primarily by weakening cash generation (TTM negative free cash flow) and a leveraged balance sheet, alongside a high P/E. These risks are partially offset by constructive technical trend signals and a more positive forward outlook from the earnings call, highlighted by a record backlog and improving utilization despite near-term margin and cost pressures.
Positive Factors
High-quality backlog
A $404M order book with $228M slated for 2026 and high Tier‑1 exposure materially increases revenue visibility and reduces counterparty risk. This backlog supports predictable fleet deployment and cash inflows, enabling multi‑quarter operational planning and resource allocation.
Negative Factors
Weak cash generation
Negative trailing‑12‑month free cash flow and weakened operating cash generation reduce financial flexibility for capex, rig builds, and deleveraging. Over months, this forces reliance on external financing or delays in investments, raising execution risk and limiting cushioning against demand cycles.
Read all positive and negative factors
Positive Factors
Negative Factors
High-quality backlog
A $404M order book with $228M slated for 2026 and high Tier‑1 exposure materially increases revenue visibility and reduces counterparty risk. This backlog supports predictable fleet deployment and cash inflows, enabling multi‑quarter operational planning and resource allocation.
Read all positive factors
Foraco International (FAR) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$318.24M
Dividend YieldN/A
Average Volume (3M)214.80K
Price to Earnings (P/E)71.5
Beta (1Y)1.70
Revenue Growth-1.10%
EPS Growth-27.98%
CountryCA
Employees1,950
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.14
Shares Outstanding98,525,000
10 Day Avg. Volume163,142
30 Day Avg. Volume214,804
Financial Highlights & Ratios
PEG Ratio-0.25
Price to Book (P/B)1.75
Price to Sales (P/S)0.66
P/FCF Ratio106.16
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$4.50Price Target Upside80.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)0.21
Revenue Forecast (FY)C$298.07M
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, dev...
How the Company Makes Money
Foraco makes money primarily by contracting mineral drilling services to mining customers and recognizing revenue from the execution of drilling programs. Its core revenue stream comes from providing drilling capacity (rigs, tooling/consumables as...
Foraco International Earnings Call Summary
Earnings Call Date:Mar 02, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 31, 2026
Earnings Call Sentiment Positive
The call presented a clear operational inflection point in Q4 2025 with a record $404M order book, strong regional recoveries (notably +95% in South America), improved utilization and a strategic shift toward gold and Tier 1 customers. These positives are tempered by a full-year revenue decline (~12%), margin compression (EBITDA margin down 3pp, EBIT down materially), ramp-up costs (~$3M), and rising input/labor cost pressures. Management emphasized capacity to meet demand, disciplined commercial terms, and a plan to deleverage, indicating confidence in 2026 execution. Overall, the forward-looking indicators and high-quality backlog outweigh the near-term financial and cost headwinds.Positive Updates
Q4 Revenue Growth and Inflection Point
Q4 2025 revenue rose to $63–$66M (company reported $66M excluding adverse FX; CFO cited $63M), up ~8% year-over-year vs Q4 2024; management called Q4 the clear inflection point with significant growth across virtually all regions.
Negative Updates
Full-Year Revenue Decline
Full year 2025 revenue declined to $258M from $293M in 2024, a drop of ~12% year-over-year, reflecting the market transition experienced across parts of 2025.
Read all updates
Q4-2025 Updates
Positive
Negative
Q4 Revenue Growth and Inflection Point
Q4 2025 revenue rose to $63–$66M (company reported $66M excluding adverse FX; CFO cited $63M), up ~8% year-over-year vs Q4 2024; management called Q4 the clear inflection point with significant growth across virtually all regions.
Read all positive updates
Company Guidance
Management did not provide formal guidance but gave clear directional metrics: Q4 revenue was $66M excluding adverse FX ($63M reported), up 8% y/y from $61M, with Q4 EBITDA of $10M (flat y/y), gross margin 16% (vs 18% Q4 2024), EBIT $5M (vs $6M), and SG&A $5M (8% of revenue); full-year revenue was $258M (vs $293M) with EBITDA margin 18% (vs 21%) and EBIT $27M (10%, vs $43M or 15%); the company reported a record order book of $404M as of Dec 31, 2025 (of which $228M is expected to be executed in 2026), 90% from Tier 1 customers and with gold representing >35% of the 2026 book. They noted utilization was 40% in Q4 and is just over 50% today (management expects fleet use of ~67% “at any given time” this year), that Q4 performance was impaired by roughly $3M of ramp‑up costs which should normalize after Q2, CapEx was $23M in 2025 and is expected to be slightly higher in 2026, net debt was $71M ($65M at constant FX) vs $61M a year ago with deleveraging to ~0.5x a top priority, and they expect to be fully deployed on three significant long‑term projects by midyear.Foraco International Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
58
Neutral
Cash Flow
39
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 269.52M | 262.71M | 293.45M | 370.09M | 330.56M | 269.69M |
| Gross Profit | 43.88M | 44.58M | 63.06M | 93.86M | 71.27M | 46.82M |
| EBITDA | 45.36M | 45.54M | 59.91M | 86.30M | 67.08M | 77.63M |
| Net Income | 14.64M | 15.84M | 27.81M | 28.71M | 19.76M | 35.49M |
Balance Sheet | ||||||
| Total Assets | 270.45M | 252.46M | 226.02M | 279.73M | 249.54M | 228.79M |
| Cash, Cash Equivalents and Short-Term Investments | 15.52M | 27.25M | 24.36M | 34.29M | 29.41M | 23.92M |
| Total Debt | 106.43M | 98.18M | 85.31M | 99.49M | 105.57M | 109.66M |
| Total Liabilities | 166.82M | 148.83M | 142.71M | 181.67M | 174.05M | 166.26M |
| Stockholders Equity | 98.89M | 98.60M | 77.50M | 85.92M | 65.19M | 55.98M |
Cash Flow | ||||||
| Free Cash Flow | -10.65M | 1.62M | 10.36M | 29.08M | 17.39M | 10.43M |
| Operating Cash Flow | 19.22M | 24.76M | 29.23M | 55.22M | 37.43M | 29.02M |
| Investing Cash Flow | -29.87M | -23.14M | -18.87M | -26.14M | -20.04M | -18.59M |
| Financing Cash Flow | 3.84M | 324.58K | -18.75M | -23.94M | -10.68M | -7.80M |
Foraco International Technical Analysis
Positive
2.50
Price Trends
2.89
Positive
2.71
Positive
2.35
Positive
Market Momentum
<0.01
Negative
62.99
Neutral
77.67
Neutral
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 2.70, below the 50-day MA of 2.89, and above the 200-day MA of 2.35, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 62.99 is Neutral, neither overbought nor oversold. The STOCH value of 77.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FAR.
Foraco International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
56 Neutral | C$318.24M | 71.48 | 16.77% | ― | -1.10% | -27.98% | |
54 Neutral | C$58.78M | -14.28 | 0.85% | ― | 3.14% | -90.42% | |
52 Neutral | C$130.99M | -237.40 | -5.96% | ― | 16.45% | -157.00% | |
51 Neutral | C$617.93M | -107.42 | -6.97% | ― | ― | -28.95% | |
47 Neutral | C$217.92M | -13.34 | -16.70% | ― | 17.69% | 6.72% | |
45 Neutral | C$409.00M | -21.63 | -12.59% | ― | ― | -1952.24% |
* Basic Materials Sector Average
TSE:FAR
Foraco International
3.23
1.38
74.59%
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Foraco International Corporate Events
Business Operations and StrategyFinancial Disclosures
Foraco posts modest Q4 gains and record backlog as 2025 transition year sets stage for 2026 growth
Positive
Mar 2, 2026
Foraco International reported modest fourth-quarter 2025 growth with revenue rising 4% year-on-year to US$63.1 million and net profit up 10% to US$2.3 million, driven largely by strong activity in South America despite seasonal weakness in North A...
Business Operations and StrategyFinancial Disclosures
Foraco Sets Date for Q4 2025 Results and Investor Call
Positive
Feb 19, 2026
Foraco International SA will release its fourth-quarter 2025 financial results before the Toronto Stock Exchange opens on March 2, 2026, and management will host a conference call the same day to review the figures. The scheduled disclosure underl...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.