Largo Resources (LGO) AI Stock Analysis

• Market Cap: $118.64M
• Dividend Yield: N/A
• Average Volume (3M): 28.70K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.42
• Revenue Growth: -37.62%
• EPS Growth: -12.09%
• Country: CA
• Employees: 500
• Sector: Basic Materials
• Sector Strength: 62
• Industry: Industrial Materials
• EPS (TTM): -0.19
• Shares Outstanding: 64,128,000
• 10 Day Avg. Volume: 30,778
• 30 Day Avg. Volume: 28,702
• PEG Ratio: -0.10
• Price to Book (P/B): 0.56
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -3.49
• 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: $4.04
• Price Target Upside: 118.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 45 Neutral
• Price Target: C$2.00 ▲(8.11%Upside)

The overall stock score is primarily driven by financial performance challenges, including declining revenues and profitability, which are of significant concern. Technical indicators suggest bearish momentum, and valuation metrics highlight further financial weaknesses due to unprofitability. While corporate efforts to improve operations are underway, the impacts remain to be seen.

Positive Factors

Cost Management

The firm's commitment to cutting its cost base is highlighted, with operating costs and adjusted cash operating costs excluding royalties decreasing 15% and 27% YoY, respectively.

Joint Venture Opportunities

The formation of a joint venture with Stryten Energy could become a major force in the U.S. domestic vanadium production and supply chain.

Operational Improvements

Operational improvements at the site include a rise in recovery rates to 77.8% compared with 70.5% in the previous year.

Negative Factors

Commodity Market Weakness

Vanadium markets in China and Europe remain weak, with the European average benchmark price per pound declining significantly YoY.

Production Challenges

Unexpected challenges with refractory replacement at the site further impacted production levels.

Revenue Decline

Largo's notable decrease in revenue was driven by a sharp decline in the company's production and further exacerbated by weakness in the market price of vanadium.

Largo Resources Business Overview & Revenue Model

Company Description

Largo Resources Ltd. (LGO) is a Canadian-based natural resource company primarily focused on the production and supply of vanadium. Operating in the mining sector, Largo Resources is recognized for its Maracás Menchen Mine located in Brazil, which is one of the highest-grade vanadium deposits globally. The company specializes in the extraction and sale of vanadium products, which are critical components in steel manufacturing and emerging applications like energy storage solutions.

How the Company Makes Money

Largo Resources generates revenue primarily through the mining, processing, and sale of vanadium products. The company's primary revenue stream comes from the sale of vanadium pentoxide (V2O5) and other vanadium-based products to global markets, including steel manufacturers and producers of energy storage systems. Largo has strategic partnerships and supply agreements with various industrial and commercial clients, which ensure a stable demand for its products. Additionally, the company is exploring opportunities in the renewable energy sector, particularly in the development and commercialization of vanadium redox flow batteries, which could further diversify its revenue streams.

Largo Resources Financial Statement Overview

Summary

Largo Resources faces significant financial challenges with declining revenues and profitability. The balance sheet provides some stability, but cash flow issues and negative profit margins highlight operational inefficiencies and potential liquidity risks. Strategic changes may be necessary to improve financial health.

Income Statement

The income statement shows a declining trend in revenue from the previous year, with a significant negative net income leading to unfavorable net profit margins. The TTM (Trailing-Twelve-Months) period exhibits negative gross profit and EBIT margins, highlighting operational challenges. The EBITDA margin has also deteriorated, indicating reduced operational efficiency.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio, which indicates some reliance on debt but not overly leveraged. However, the return on equity is negative due to losses, which is concerning. The equity ratio remains relatively healthy, providing some stability.

Cash Flow

Cash flow analysis reveals negative free cash flow growth and a weakened operating cash flow to net income ratio. These factors suggest potential liquidity challenges. However, the company maintains a positive operating cash flow, which provides some operational liquidity, albeit insufficient to cover capital expenditures.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
144.82M	198.68M	229.25M	198.28M	119.99M	107.18M
	Gross Profit
-14.02M	23.93M	59.53M	65.27M	31.60M	12.38M
	EBIT
-46.02M	-16.28M	16.97M	36.97M	18.80M	―
	EBITDA
-29.52M	3.82M	37.71M	69.45M	35.58M	19.69M
	Net Income Common Stockholders
-48.86M	-30.34M	-2.23M	22.57M	6.76M	―
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.26M	42.71M	54.47M	83.79M	79.14M	127.14M
	Total Assets
54.69M	381.62M	355.75M	313.91M	297.81M	356.83M
	Total Debt
0.00	76.53M	42.05M	17.55M	24.79M	0.00
	Net Debt
-1.26M	33.81M	-12.42M	-66.24M	-54.36M	-127.14M
	Total Liabilities
13.76M	125.82M	81.20M	48.21M	50.64M	85.40M
	Stockholders Equity
40.93M	248.65M	265.39M	265.70M	247.16M	271.43M
Cash Flow		Free Cash Flow
-31.41M	-32.51M	-42.18M	12.38M	-77.61M	68.05M
	Operating Cash Flow
9.26M	21.20M	3.46M	39.78M	-59.51M	106.63M
	Investing Cash Flow
-39.74M	-62.88M	-60.15M	-27.40M	-18.11M	―
	Financing Cash Flow
22.22M	29.13M	26.43M	-6.90M	30.23M	―

Largo Resources Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LGO, the sentiment is Negative. The current price of 1.85 is below the 20-day moving average (MA) of 1.89, below the 50-day MA of 2.03, and below the 200-day MA of 2.52, indicating a bearish trend. The MACD of -0.06 indicates Negative momentum. The RSI at 43.79 is Neutral, neither overbought nor oversold. The STOCH value of 72.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:LGO.

Largo Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	51 Neutral	$2.02B	-1.14	-21.37%	3.64%	2.88%	-30.57%
LGO	45 Neutral	$118.64M	―	-23.26%	―	-37.62%	-12.09%
MSR	42 Neutral	C$111.34M	11.70	70.41%	―	―	―
FL	42 Neutral	C$120.85M	―	-82.26%	―	―	25.32%
LITH	41 Neutral	C$115.71M	18.12	11.66%	―	―	-7.56%
AHR	34 Underperform	C$161.52M	―	-516.26%	―	―	37.82%

Largo Resources Corporate Events

Largo Inc. Reports Successful Shareholder Meeting Outcomes

Largo Inc. announced the successful results of its Annual General Meeting of Shareholders, with 71.17% of common shares voted. Shareholders approved all matters, including the election of director nominees and the appointment of KPMG LLP as auditors. The Board expressed gratitude for shareholder support, highlighting the company’s strong governance and operational focus.

The most recent analyst rating on (TSE:LGO) stock is a Buy with a C$5.00 price target. To see the full list of analyst forecasts on Largo Resources stock, see the TSE:LGO Stock Forecast page.

Largo Resources Reports Q1 2025 Results Amid Operational Turnaround Efforts

Largo Resources reported a decrease in V2O5 production and sales in Q1 2025 compared to the previous year, attributed to mining lower-grade ore zones and operational adjustments. Despite the short-term impacts on production, the company is focused on its operational turnaround plans, which include increasing mined material and waste movement. The company has revised its annual production and sales guidance to reflect these operational challenges, but remains committed to improving performance and maintaining its market position.

Largo Resources Reports 2024 Financial Results and Announces Turnaround Plan Amid Market Challenges

Largo Resources reported a challenging financial year in 2024, with revenues declining by 37% compared to 2023 due to lower vanadium prices and market pressures. Despite these challenges, the company successfully implemented cost reduction measures, resulting in a significant decrease in operating costs and an improvement in adjusted cash operating costs per pound sold. The company also announced an operational turnaround plan to further optimize costs and enhance productivity at its Maracás Menchen Mine. The vanadium market faced downward pressure due to reduced demand and oversupply, impacting Largo’s financial performance. However, the company remains committed to improving its operational efficiency and market positioning.