Lucara Diamond (LUC) AI Stock Analysis

• Market Cap: C$113.05M
• Dividend Yield: N/A
• Average Volume (3M): 195.75K
• Price to Earnings (P/E): 1.4
• Beta (1Y): 0.20
• Revenue Growth: 28.12%
• EPS Growth: N/A
• Country: CA
• Employees: 324
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Other Precious Metals
• EPS (TTM): 0.03
• Shares Outstanding: 455,828,300
• 10 Day Avg. Volume: 234,754
• 30 Day Avg. Volume: 195,755
• PEG Ratio: -0.01
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 0.62
• P/FCF Ratio: -3.26
• 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$0.20
• Price Target Upside: -20.00% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: C$0.27 ▲(6.40% Upside)

The score is driven primarily by strong profitability and a solid balance sheet, supported by constructive technical momentum and an extremely low P/E valuation. These positives are tempered by negative free cash flow and weak cash conversion, which raise near-term cash flow and liquidity risk.

Positive Factors

Business Model & Sales Strategy

Lucara's tender and auction model for high‑value rough diamonds structurally captures premium pricing versus spot channels. Combined with strategic marketing partnerships, this durable sales approach broadens buyer reach and improves long‑term monetization of large stones, supporting steady revenue realization.

Profitability & Margin Profile

Sustained high gross and net margins reflect a structurally advantaged product mix (gem‑quality, large diamonds) and efficient operations. Healthy EBIT/EBITDA margins provide a durable buffer against cyclical price swings, supporting reinvestment into mine productivity and long‑term operational resilience.

Balance Sheet Strength

Low leverage and strong ROE indicate conservative capital structure and effective use of shareholder funds. This financial flexibility supports capex and operational continuity through commodity cycles, reduces refinancing risk, and preserves optionality for strategic investments over the medium term.

Negative Factors

Cash Generation & Liquidity

Persistent negative free cash flow and weak cash conversion constrain the company's ability to self‑fund capex, sustain distributions, or build liquidity buffers. Over several quarters this increases reliance on external financing despite low leverage, raising funding and execution risk for growth plans.

Earnings & Cash Flow Volatility

Documented volatility in revenue, net income and cash flow reduces predictability of earnings and complicates long‑range planning. For a business dependent on intermittent large stones, this structural variability can impede steady reinvestment schedules and make budgeting for tenders and capex more difficult.

Asset & Revenue Concentration

Heavy reliance on a single flagship mine and on sales of large, high‑value stones concentrates operational, geological and market risk. Production disruption or periods with fewer large recoveries could materially reduce revenue and margins across multiple quarters, a structural vulnerability to monitor.

Lucara Diamond Business Overview & Revenue Model

Company Description

Lucara Diamond Corp., a diamond mining company, focuses on the development and operation of diamond properties in Africa. The company holds 100% interests in the Karowe mine located in Botswana. It also operates Clara Platform, a digital platform for the sale of rough diamonds. The company was formerly known as Bannockburn Resources Limited and changed its name to Lucara Diamond Corp. in August 2007. Lucara Diamond Corp. was incorporated in 1981 and is based in Vancouver, Canada.

How the Company Makes Money

Lucara Diamond generates revenue primarily through the sale of rough diamonds mined from its Karowe Diamond Mine. The company employs a unique revenue model that includes direct sales through tenders and auctions, allowing it to capture maximum value for its high-quality diamonds. Key revenue streams include the sale of large, high-value diamonds, which attract premium prices in the market. Additionally, Lucara has formed strategic partnerships, including a collaboration with Hugh Jones & Co. for marketing and sales, which enhances its market reach and sales capabilities. The company also benefits from strong demand in the luxury goods sector and maintains a focus on operational efficiency to maximize profitability.

Lucara Diamond Financial Statement Overview

Summary

Strong profitability (TTM gross margin 41.5%, net margin 24.8%) and healthy operating efficiency (EBIT margin 30.3%, EBITDA margin 38.3%) support the score, along with solid leverage metrics (debt-to-equity 0.15) and ROE (17.8%). The main offset is weak cash conversion and liquidity pressure, with negative free cash flow and low operating cash flow to net income (0.28), plus historical volatility in revenue and earnings.

Income Statement

Lucara Diamond's income statement shows strong profitability with a gross profit margin of 41.5% and a net profit margin of 24.8% for TTM. The company has demonstrated significant revenue growth of 13.3% in the TTM period, indicating a positive trajectory. EBIT and EBITDA margins are healthy at 30.3% and 38.3%, respectively, reflecting efficient operations. However, historical volatility in revenue growth and net income should be monitored.

Balance Sheet

The balance sheet reflects a solid equity position with a debt-to-equity ratio of 0.15, indicating low leverage and financial stability. Return on equity is strong at 17.8%, showcasing effective use of shareholder funds. The equity ratio is robust, suggesting a well-capitalized structure. However, the company has experienced fluctuations in debt levels over the years, which could pose potential risks.

Cash Flow

Cash flow analysis reveals challenges with negative free cash flow in the TTM period, despite a 56.3% growth from the previous year. The operating cash flow to net income ratio is low at 0.28, indicating potential cash flow constraints. The free cash flow to net income ratio is negative, highlighting the need for improved cash management. Historical volatility in cash flow metrics suggests potential liquidity risks.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	223.30M	203.88M	172.40M	212.93M	230.08M	125.26M
Gross Profit	97.78M	84.45M	62.35M	84.60M	75.14M	-7.73M
EBITDA	88.86M	66.61M	53.50M	87.18M	100.29M	18.97M
Net Income	59.56M	39.90M	-20.19M	40.43M	23.83M	-26.28M
Balance Sheet
Total Assets	1.03B	660.83M	575.80M	495.84M	411.95M	333.85M
Cash, Cash Equivalents and Short-Term Investments	25.08M	22.79M	13.34M	26.42M	27.01M	4.92M
Total Debt	26.18M	195.83M	137.99M	78.60M	48.90M	32.27M
Total Liabilities	605.81M	389.10M	333.67M	225.78M	162.98M	125.66M
Stockholders Equity	424.40M	271.73M	242.13M	270.06M	248.97M	208.19M
Cash Flow
Free Cash Flow	-98.94M	-38.71M	-52.33M	77.15M	68.10M	-35.48M
Operating Cash Flow	73.84M	56.30M	63.36M	96.23M	83.39M	-1.53M
Investing Cash Flow	-115.66M	-94.35M	-115.79M	-125.42M	-97.54M	-33.95M
Financing Cash Flow	34.53M	47.76M	39.66M	29.14M	36.80M	29.37M

Lucara Diamond Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LUC, the sentiment is Positive. The current price of 0.25 is above the 20-day moving average (MA) of 0.24, above the 50-day MA of 0.21, and above the 200-day MA of 0.23, indicating a bullish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 55.99 is Neutral, neither overbought nor oversold. The STOCH value of 33.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:LUC.

Lucara Diamond Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LUC	76 Outperform	C$113.05M	1.42	21.15%	―	28.12%	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
MPVD	47 Neutral	C$13.80M	-0.07	-74.45%	―	-45.17%	-100.74%
TAI	43 Neutral	C$1.44M	-3.26	-193.26%	―	―	-187.50%
DMI	29 Underperform	C$1.69M	―	―	―	―	―

Lucara Diamond Corporate Events

Lucara Seeks TSX Hardship Exemption for $165 Million Discounted Equity Raise

Lucara has applied to the Toronto Stock Exchange for a financial hardship exemption to proceed with a previously announced non-brokered private placement of 1,031,250,000 common shares at $0.16 per share, raising gross proceeds of $165 million at a discount to recent market prices. The funding, in which entities controlled by the Lundin Family Trusts will participate significantly, is intended to bridge a liquidity shortfall and keep the Karowe underground project moving forward while longer-term financing is arranged, and because insider participation is large relative to Lucara’s market capitalization and the number of new shares exceeds TSX thresholds, the transaction requires TSX exemptive relief from normal shareholder approval rules, underscoring the company’s near-term financing pressure and the pivotal role of existing cornerstone investors.

The most recent analyst rating on (TSE:LUC) stock is a Buy with a C$0.32 price target. To see the full list of analyst forecasts on Lucara Diamond stock, see the TSE:LUC Stock Forecast page.

Lucara Upsizes Private Placement to $165 Million to Advance Karowe Underground Project

Lucara Diamond Corp. has upsized its previously announced non-brokered equity financing to raise gross proceeds of $165 million through the issuance of 1,031,250,000 common shares at $0.16 each, following strong investor demand. The additional capital is intended to significantly bolster funding for the Karowe Underground Project, covering key 2026 development milestones such as shaft equipping, conveyance commissioning, and lateral and drill horizon development, while also supporting general working capital. Participation of the Lundin Family Trusts—through Nemesia S.a.r.l., already Lucara’s largest shareholder—is expected to reach up to $70 million, constituting a related-party transaction that the company plans to complete under financial hardship exemptions, subject to TSX and other regulatory approvals anticipated by late January.

The most recent analyst rating on (TSE:LUC) stock is a Hold with a C$0.20 price target. To see the full list of analyst forecasts on Lucara Diamond stock, see the TSE:LUC Stock Forecast page.

Lucara Secures Lundin-Backed C$70 Million Private Placement to Advance Karowe Underground Project

Lucara Diamond Corp. has launched a non-brokered private placement of at least 437.5 million common shares at C$0.16 per share, targeting minimum gross proceeds of C$70 million to help fund the Karowe Underground Project in Botswana and bolster working capital. The Lundin Family Trusts, through their vehicle Nemesia S.a.r.l., intend to subscribe for up to the full amount in order to maintain or increase their stake, making the financing a related-party transaction that Lucara plans to complete under financial-hardship exemptions, while it also explores complementary debt options, including a potential bond issue advised by Clarksons Securities and Pareto Securities, to fully finance the underground expansion and support the company’s long-term production profile.

The most recent analyst rating on (TSE:LUC) stock is a Hold with a C$0.20 price target. To see the full list of analyst forecasts on Lucara Diamond stock, see the TSE:LUC Stock Forecast page.

Lucara Updates Karowe Underground Study, Confirms 10-Year Mine Life and $1.3 Billion Net Income Outlook

Lucara Diamond Corp. has released an updated feasibility study for the underground expansion at its Karowe Diamond Mine in Botswana, confirming a 10-year underground mine life and total life-of-mine recoveries of 4.5 million carats, predominantly from the high-value EM/PK(S) unit of the South Lobe. The revised study updates capital, schedule and technical assumptions, setting pre‑production capital for the underground project at $779 million through first-half 2028 (with over $436 million already spent), and outlines an after-tax unlevered NPV8% of $432.1 million and more than $1.3 billion in expected net income, reinforcing Karowe’s role as a long-term producer of exceptional large diamonds and extending economic benefits to Lucara, its investors, employees, local communities and Botswana as a whole.

The most recent analyst rating on (TSE:LUC) stock is a Buy with a C$0.22 price target. To see the full list of analyst forecasts on Lucara Diamond stock, see the TSE:LUC Stock Forecast page.

Lucara Diamond Reports Strong Q3 2025 Results Amidst Operational Milestones

Lucara Diamond Corp. reported its Q3 2025 results, highlighting significant achievements such as the sale of 101,422 carats generating $51.2 million in revenue and the recovery of a 1,015 carat non-gem diamond. The company also made progress on its Karowe Underground Project, reaching the bottom of the production shaft, a critical milestone. Financially, Lucara improved its operating margins to 57% due to increased revenue and reduced operating expenses. However, the company faces a working capital deficit of $157.8 million, partly due to the classification of its Project Facility as a current liability. Despite these challenges, Lucara remains focused on safe execution and cost discipline as it advances towards first underground ore.

The most recent analyst rating on (TSE:LUC) stock is a Hold with a C$0.50 price target. To see the full list of analyst forecasts on Lucara Diamond stock, see the TSE:LUC Stock Forecast page.