Largo Resources (LGO) AI Stock Analysis

• Market Cap: C$104.97M
• Dividend Yield: N/A
• Average Volume (3M): 122.99K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.19
• Revenue Growth: -20.57%
• EPS Growth: -34.04%
• Country: CA
• Employees: 500
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): -0.79
• Shares Outstanding: 83,313,020
• 10 Day Avg. Volume: 264,674
• 30 Day Avg. Volume: 122,993
• PEG Ratio: -0.03
• Price to Book (P/B): 0.65
• Price to Sales (P/S): 0.86
• P/FCF Ratio: -3.46
• 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$4.00
• Price Target Upside: 217.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 42 Neutral
• Price Target: C$1.50 ▲(19.05% Upside)

Largo Resources faces significant financial and operational challenges, reflected in its low financial performance and valuation scores. Technical analysis indicates bearish momentum, while recent corporate events provide temporary financial relief but underscore liquidity issues. Strategic improvements are necessary to enhance the company's financial health and stock performance.

Positive Factors

Strategic Partnerships

Strategic partnerships enhance market presence and provide revenue stability through long-term contracts, supporting business sustainability.

Low Leverage

Low leverage provides financial flexibility and reduces risk, allowing the company to navigate economic challenges more effectively.

Sustainable Mining Practices

Commitment to sustainability can enhance brand reputation and align with increasing regulatory and consumer focus on environmental responsibility.

Negative Factors

Negative Profitability

Ongoing losses and negative profitability hinder financial health, requiring strategic changes to improve operational efficiency and returns.

Cash Flow Challenges

Negative cash flow growth indicates difficulties in supporting operations and investments, potentially affecting long-term viability.

Declining Revenue

Declining revenue impacts the ability to generate profits and invest in growth, necessitating a review of cost structure and market strategy.

Largo Resources Business Overview & Revenue Model

Company Description

Largo Resources Ltd. is a Canadian mining company focused on the production and supply of vanadium, a critical metal used in steel production and energy storage applications. The company operates the Maracás Menchen Mine in Brazil, which is one of the largest primary vanadium mines in the world. Largo is committed to sustainable mining practices and aims to be a leading supplier of high-quality vanadium products to meet the growing global demand.

How the Company Makes Money

Largo Resources generates revenue primarily through the sale of vanadium products, including vanadium pentoxide and ferrovanadium, which are used in various industries, particularly steel manufacturing and battery production. The company benefits from a diversified customer base, including both domestic and international clients. Additionally, Largo has established strategic partnerships and agreements with key industry players to secure long-term contracts and enhance its market presence. Fluctuations in vanadium prices significantly impact its revenue, and the company also focuses on operational efficiency and cost management to maximize profitability.

Largo Resources Financial Statement Overview

Summary

Largo Resources is experiencing financial difficulties, with negative profitability and cash flow metrics. While leverage is low, the company struggles with generating positive returns and cash flow. Strategic changes are necessary to enhance operational efficiency and financial performance.

Income Statement

Largo Resources has faced declining revenue and profitability over recent periods. The TTM data shows a slight revenue growth of 3.1%, but gross profit and net profit margins are negative, indicating operational challenges. The EBIT and EBITDA margins are also negative, reflecting ongoing losses. The company needs to address its cost structure to improve profitability.

Balance Sheet

The balance sheet shows a relatively low debt-to-equity ratio, suggesting manageable leverage. However, the return on equity is negative, indicating that the company is not generating returns for shareholders. The equity ratio is not provided, but the overall financial health appears stable, though profitability remains a concern.

Cash Flow

Cash flow analysis reveals negative free cash flow growth and a high free cash flow to net income ratio, indicating cash flow challenges. The operating cash flow to net income ratio is low, suggesting difficulties in converting income into cash. The company needs to improve its cash generation capabilities to support operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	111.88M	124.92M	198.68M	229.25M	198.28M	119.99M
Gross Profit	-25.16M	-20.90M	23.93M	59.53M	65.27M	31.60M
EBITDA	-13.82M	-33.11M	3.82M	37.71M	69.45M	35.58M
Net Income	-64.15M	-49.83M	-30.34M	-2.23M	22.57M	6.76M
Balance Sheet
Total Assets	321.99M	318.67M	381.62M	355.75M	313.91M	297.81M
Cash, Cash Equivalents and Short-Term Investments	8.22M	22.11M	42.71M	54.47M	83.79M	79.14M
Total Debt	105.90M	17.50M	76.53M	42.05M	17.55M	24.79M
Total Liabilities	185.84M	147.44M	125.82M	81.20M	48.21M	50.64M
Stockholders Equity	130.09M	164.82M	248.65M	265.39M	265.70M	247.16M
Cash Flow
Free Cash Flow	-29.37M	-31.07M	-32.51M	-42.18M	12.38M	-77.61M
Operating Cash Flow	8.45M	11.16M	21.20M	3.46M	39.78M	-59.51M
Investing Cash Flow	-36.83M	-42.23M	-62.88M	-60.15M	-27.40M	-18.11M
Financing Cash Flow	5.97M	12.04M	29.13M	26.43M	-6.90M	30.23M

Largo Resources Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.26
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 1.26 is below the 20-day moving average (MA) of 1.37, below the 50-day MA of 1.59, and below the 200-day MA of 1.96, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 35.69 is Neutral, neither overbought nor oversold. The STOCH value of 3.57 is Positive, 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 *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
LGO	42 Neutral	C$104.97M	-0.91	-39.64%	―	-20.57%	-34.04%
FL	42 Neutral	C$159.09M	-11.74	-144.30%	―	―	34.36%
MSR	42 Neutral	C$100.14M	-73.17	-9.76%	―	―	-127.89%
LITH	41 Neutral	C$122.77M	-230.43	-0.96%	―	―	-107.23%
AHR	34 Underperform	C$265.89M	-94.40	-385.36%	―	―	-267.65%

Largo Resources Corporate Events

Largo Inc. Secures $23.4 Million to Alleviate Financial Strain

Largo Inc. has successfully closed a registered direct offering and a concurrent private placement, raising a total of US$23.4 million. The funds will be used to support the company’s principal operating subsidiary, Largo Vanádio de Maracás S.A., by sustaining working capital and facilitating payments to lenders and suppliers. This financial maneuver is crucial as the company faces liquidity constraints that are impacting production rates at its Maracás Menchen Mine. The Toronto Stock Exchange granted Largo a Financial Hardship Exemption, allowing it to proceed with the offering without the usual shareholder approvals, highlighting the company’s urgent need to improve its financial situation.

Largo Inc. Announces $23.4 Million Offering Amid Financial Challenges

Largo Inc. has announced a US$23.4 million offering consisting of a registered direct offering and a private placement to address liquidity constraints and meet equity contribution requirements for a debt rollover agreement. The proceeds will be used to pay Brazilian lenders and suppliers, impacting the company’s production rates due to current financial challenges.

Largo Secures Debt Deferral Agreement with Brazilian Lenders

Largo Inc. has secured a binding term sheet with five Brazilian lenders to defer $84.2 million in principal debt payments until March 2026, with a potential extension to September 2026. This agreement is contingent on Largo raising at least C$30 million by November 2025. The deferral provides Largo with additional time to restructure its debt, potentially strengthening its financial position and operational flexibility. This development reflects the lenders’ support and could positively impact Largo’s strategic initiatives and stakeholder confidence.

Largo Resources Navigates Production Gains Amid U.S. Tariff Challenges

Largo Resources reports sustained production levels of vanadium pentoxide and ilmenite, with ongoing expansion efforts in its ilmenite plant expected to increase capacity significantly by the end of 2025. However, the company faces challenges due to increased U.S. tariffs on high purity vanadium imports and liquidity issues, leading to delayed deliveries and contract renegotiations. Largo is actively seeking financing solutions and lobbying for tariff exemptions to mitigate these impacts, while also exploring strategic alternatives for its tungsten projects to unlock value.