Royalty North (HCU) AI Stock Analysis

• Market Cap: C$177.57M
• Dividend Yield: N/A
• Average Volume (3M): 292.46K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.36
• Revenue Growth: 11.35%
• EPS Growth: -49.36%
• Country: CA
• Employees: 2
• Sector: Energy
• Sector Strength: 49
• Industry: Copper
• EPS (TTM): -0.41
• Shares Outstanding: 90,365,430
• 10 Day Avg. Volume: 174,061
• 30 Day Avg. Volume: 292,464
• PEG Ratio: >-0.01
• Price to Book (P/B): -1.14
• Price to Sales (P/S): 4.56
• P/FCF Ratio: 4.42
• 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: 2.04% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 50 Neutral
• Price Target: C$2.00 ▲(2.04% Upside)

The overall score reflects significant financial challenges and valuation concerns, partially offset by positive corporate events and technical indicators. The financial instability and negative P/E ratio are major risks, while the strategic acquisition and drill results provide some optimism for future growth.

Royalty North Business Overview & Revenue Model

Company Description

Royalty North (HCU) is a diversified company operating primarily in the resource sector, focusing on the acquisition and management of royalty and streaming interests in mining and energy projects. The company specializes in securing revenue-generating agreements that allow it to benefit from the production of precious metals, base metals, and energy resources without the direct operational risks associated with mining and extraction. Royalty North aims to provide investors with a stable income stream while participating in the growth of the natural resource sector.

How the Company Makes Money

Royalty North generates revenue through its royalty and streaming agreements, which provide it with a percentage of the revenue or production from the mines and projects in which it has invested. The primary revenue streams include upfront cash payments for acquiring royalties, ongoing royalty payments based on production levels, and potential buyouts or resales of royalty interests. The company may also engage in strategic partnerships with mining companies, allowing it to secure favorable terms and access to lucrative projects. Additionally, fluctuations in commodity prices can significantly impact revenue, as higher prices typically lead to increased production and, consequently, higher royalty payments.

Royalty North Financial Statement Overview

Summary

The company exhibits strong revenue growth but struggles with profitability, as indicated by negative net profit and EBITDA margins. The balance sheet is weak with negative equity and high leverage, raising concerns about financial stability. Cash flow generation is a positive aspect, showing resilience despite net losses.

Income Statement

The company has shown significant revenue growth from 2023 to 2024, with a Revenue Growth Rate of 215.3%. However, profitability remains a concern as evidenced by negative Net Profit Margin (-447.4%) and EBITDA Margin (-296.1%) for 2024. The Gross Profit Margin improved to 39.8% in 2024, indicating better cost management, but overall profitability is weak due to high net losses.

Balance Sheet

The balance sheet reveals a concerning financial structure with a negative Stockholders' Equity of -$51.3 million in 2024, indicating insolvency. The Debt-to-Equity Ratio cannot be calculated due to negative equity, but the high total debt of $191.6 million suggests significant leverage. The Equity Ratio is also negative, highlighting financial instability.

Cash Flow

The company has shown strong Free Cash Flow growth, with a Free Cash Flow of $13.2 million in 2024 compared to $3.96 million in 2023. The Operating Cash Flow to Net Income Ratio is positive, indicating cash generation from operations despite net losses. However, the Free Cash Flow to Net Income Ratio is not meaningful due to negative net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.85M	12.78M	4.05M	-355.00K	2.96M	246.03K
Gross Profit	5.77M	5.08M	-482.00K	-397.00K	2.96M	246.03K
EBITDA	-62.52M	-37.85M	-10.42M	-2.54M	2.81M	―
Net Income	-80.62M	-57.18M	-23.68M	-15.82M	2.81M	―
Balance Sheet
Total Assets	517.74M	513.41M	520.25M	300.71M	9.04M	6.47M
Cash, Cash Equivalents and Short-Term Investments	2.27M	12.22M	18.27M	32.70M	3.60M	40.00K
Total Debt	199.54M	191.64M	187.74M	71.16M	0.00	240.00K
Total Liabilities	610.65M	564.69M	514.87M	273.52M	96.00K	314.00K
Stockholders Equity	-92.92M	-51.28M	5.38M	27.18M	8.95M	6.15M
Cash Flow
Free Cash Flow	13.48M	13.20M	3.96M	-172.00K	882.00K	666.43K
Operating Cash Flow	13.48M	13.20M	3.96M	-172.00K	882.00K	666.43K
Investing Cash Flow	-21.69M	-9.44M	-15.86M	14.02M	2.95M	0.00
Financing Cash Flow	-3.54M	-9.76M	-2.47M	15.93M	-247.00K	-718.71K

Royalty North Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.96
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HCU, the sentiment is Positive. The current price of 1.96 is above the 20-day moving average (MA) of 1.95, above the 50-day MA of 1.65, and above the 200-day MA of 1.24, indicating a bullish trend. The MACD of 0.07 indicates Positive momentum. The RSI at 74.57 is Negative, neither overbought nor oversold. The STOCH value of 29.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:HCU.

Royalty North Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	54 Neutral	C$4.15B	0.97	16.40%	5.23%	10.45%	-57.37%
HCU	50 Neutral	C$177.57M	―	178.91%	―	11.35%	-49.36%
ECU	42 Neutral	C$66.03M	―	-52.23%	―	―	-288.76%
CCI	42 Neutral	C$16.44M	―	-48.32%	―	―	-98.06%
HI	34 Underperform	C$92.05M	―	-33.38%	―	―	-162.42%

Royalty North Corporate Events

Royal Gold Acquires Horizon Copper in Strategic Expansion

Royal Gold, Inc. has announced its acquisition of Horizon Copper Corp for C$2.00 per share, representing a significant premium to Horizon’s recent stock prices. This all-cash transaction, valued at approximately US$196 million, is part of Royal Gold’s strategic expansion, which also includes acquiring Sandstorm Gold Ltd. The deal offers Horizon shareholders immediate liquidity and a substantial premium, reflecting the underlying value of Horizon’s assets. The acquisition is expected to enhance Royal Gold’s portfolio with high-quality, long-life royalty and streaming interests, contributing to its global asset diversification and growth potential.

Horizon Copper Reports Promising Drill Results at Oyu Tolgoi

Horizon Copper Corp. announced impressive high-grade drill results from the Hugo North Extension at the Oyu Tolgoi mine in Mongolia, highlighting the long-term potential of the project. The results, released by Entrée Resources Ltd., include significant copper and gold mineralization, reinforcing the value of Horizon’s investment in Entrée and the potential for robust cash flows and shareholder value. The ongoing development at the Oyu Tolgoi mine, operated by Rio Tinto Group, remains on schedule, with underground production expected in 2027.