Largo Resources (LGO) AI Stock Analysis

• Market Cap: $124.41M
• Dividend Yield: N/A
• Average Volume (3M): 31.52K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.44
• Revenue Growth: -37.62%
• EPS Growth: -12.09%
• Country: CA
• Employees: 500
• Sector: Basic Materials
• Sector Strength: 71
• Industry: Industrial Materials
• EPS (TTM): -0.19
• Shares Outstanding: 64,128,000
• 10 Day Avg. Volume: 34,863
• 30 Day Avg. Volume: 31,524
• PEG Ratio: 0.60
• Price to Book (P/B): 0.47
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -2.55
• Enterprise Value/Market Cap: 0.60
• Enterprise Value/Revenue: 0.12
• Enterprise Value/Gross Profit: -3.57
• Enterprise Value/Ebitda: -0.75
• 1Y Price Target: $4.02
• Price Target Upside: 107.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 48 Neutral
• Price Target: C$2.00 ▲(3.09%Upside)

Largo Resources is currently under financial pressure with declining revenues and profitability challenges. While technical indicators show mixed signals, the valuation is concerning due to a negative P/E ratio. Positively, recent corporate events indicate efforts to improve production and liquidity. Addressing financial weaknesses and operational challenges is crucial for better performance.

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 Potential

The Storion Joint Venture is anticipated to play a significant role in the North American vanadium flow battery sector, highlighting its potential future value.

Operational Efficiency

Notable progress on operational turnaround with improved production rates for V concentrate, including a 75% increase in May.

Negative Factors

Market Weakness

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

Production Challenges

The company produced 2.9 million pounds of vanadium equivalent, representing a 25% decrease year over year.

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 Inc. engages in the development and sale of vanadium-based utility scale electrical energy storage systems in Canada. The company operates in five segments: Sales & Trading, Mine Properties, Corporate, Exploration and Evaluation Properties, and Largo Clean Energy. Its products include VPURE+ vanadium flakes that are used in the production of master alloys and aerospace applications; VPURE vanadium flakes ferrovanadium and vanadium carbon nitride for the steel industry; and VPURE+ vanadium powder for catalyst applications. The company offers renewable energy solutions through Largo Clean Energy. Its products are sourced from vanadium deposits at the Maracás Menchen Mine in Brazil. The company was formerly known as Largo Resources Ltd. and changed its name to Largo Inc. in November 2021. Largo Inc. was incorporated in 1988 and is headquartered in Toronto, Canada.

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 negative profit margins. While the balance sheet shows moderate stability, increased debt levels and negative returns on equity are concerns. Cash flow generation is under pressure, necessitating strategic actions to optimize operations and improve financial resilience.

Income Statement

Largo Resources has experienced significant volatility in its financial performance. The gross profit margin has turned negative, and there is a notable decline in total revenue from $198.68 million in 2023 to $124.92 million in 2024, resulting in a revenue growth rate of -37.13%. The net profit margin also remains negative, highlighting profitability challenges. These factors indicate a need for strategic improvements to stabilize revenue streams and manage costs effectively.

Balance Sheet

The balance sheet shows a moderate level of stability, with the equity ratio at 51.71% in 2024, suggesting a balanced structure between debt and equity. However, the debt-to-equity ratio has increased to 0.11, reflecting a higher reliance on debt compared to previous years. Return on equity is negative, which is concerning for investor returns. While the company is managing its liabilities, improving profitability is crucial for enhanced financial health.

Cash Flow

The cash flow statements reveal challenges with free cash flow, which remains negative at -$31.07 million in 2024. Operating cash flow to net income ratio is positive at 0.22, indicating some operational cash generation despite losses. However, free cash flow to net income ratio is negative, suggesting difficulties in generating free cash. Improving operating efficiencies and reducing capital expenditures could enhance liquidity.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	124.92M	198.68M	229.25M	198.28M	119.99M
Gross Profit	-20.90M	23.93M	59.53M	65.27M	31.60M
EBITDA	-33.11M	3.82M	37.71M	69.45M	35.58M
Net Income	-49.83M	-30.34M	-2.23M	22.57M	6.76M
Balance Sheet
Total Assets	318.67M	381.62M	355.75M	313.91M	297.81M
Cash, Cash Equivalents and Short-Term Investments	22.11M	42.71M	54.47M	83.79M	79.14M
Total Debt	17.50M	76.53M	42.05M	17.55M	24.79M
Total Liabilities	147.44M	125.82M	81.20M	48.21M	50.64M
Stockholders Equity	164.82M	248.65M	265.39M	265.70M	247.16M
Cash Flow
Free Cash Flow	-31.07M	-32.51M	-42.18M	12.38M	-77.61M
Operating Cash Flow	11.16M	21.20M	3.46M	39.78M	-59.51M
Investing Cash Flow	-42.23M	-62.88M	-60.15M	-27.40M	-18.11M
Financing Cash Flow	12.04M	29.13M	26.43M	-6.90M	30.23M

Largo Resources Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.94
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LGO, the sentiment is Neutral. The current price of 1.94 is above the 20-day moving average (MA) of 1.75, above the 50-day MA of 1.88, and below the 200-day MA of 2.45, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 62.86 is Neutral, neither overbought nor oversold. The STOCH value of 95.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:LGO.

Largo Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$10.27B	9.83	-0.18%	2.87%	2.21%	-32.50%
LGO	48 Neutral	$124.41M	―	-23.26%	―	-37.62%	-12.09%
FL	42 Neutral	C$123.13M	―	-82.26%	―	―	25.32%
MSR	42 Neutral	C$107.22M	11.27	70.41%	―	―	―
AHR	34 Underperform	C$172.73M	―	-516.26%	―	―	37.82%
PWM		C$118.88M	―	-0.28%	―	―	―
LITH	41 Neutral	C$134.31M	21.04	11.66%	―	―	-7.56%

Largo Resources Corporate Events

Largo Inc. Reports Significant Production Gains Amid Operational Turnaround

Largo Inc. has reported significant progress in its operational turnaround efforts, marked by a substantial increase in production rates for vanadium pentoxide and ilmenite concentrate in May 2025. The company achieved a 75% increase in V₂O₅ production and a 65% increase in ilmenite concentrate production compared to April 2025, thanks to enhanced access to key mining areas and improved plant stability. These developments are part of Largo’s broader strategy to optimize resource recovery and enhance sustainable mining practices. Despite a recent default notice from a counterparty regarding V₂O₅ delivery, Largo remains optimistic about its production outlook for June 2025 and aims to meet its annual production guidance.

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 Inc. Secures $10 Million Factoring Facility to Boost Liquidity

Largo Inc. announced a $10 million non-recourse factoring facility through its subsidiary, Largo Resources USA, to monetize accounts receivable from vanadium product sales. This facility aims to improve working capital efficiency by providing quicker access to liquidity, aligning cash inflows with expenditures, and supporting day-to-day operations as part of the company’s operational turnaround plan. The facility may expand to $30 million, subject to customer and credit approvals, and is expected to enhance Largo’s financial flexibility, aiding in stabilizing production and improving sales.

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 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.