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5N Plus Inc (TSE:VNP)
TSX:VNP

5N Plus (VNP) AI Stock Analysis

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5N Plus

(TSX:VNP)

Rating:71Outperform
Price Target:
C$9.50
▲(6.15%Upside)
5N Plus shows impressive financial performance with robust growth and profitability, supported by a positive earnings call that highlights strategic advancements. However, liquidity concerns and mixed technical indicators offset these strengths. The stock's valuation is moderate, aligning with its growth potential, but the lack of a dividend yield may deter some investors.

5N Plus (VNP) vs. iShares MSCI Canada ETF (EWC)

5N Plus Business Overview & Revenue Model

Company Description5N Plus Inc. produces and sells semiconductors in North America, Europe, and Asia. It operates through Specialty Semiconductors and Performance Material segments. The company offers low melting point alloys, semiconductor compounds and wafers, as well as various chemicals, and metals. It is also involved in manufacture of metallic powders for micro-electronic and manufacturing applications. In addition, the company is involved in animal feed additives and pharmaceutical ingredients as well as offers recycling services. The company serves renewable energy, security, space, pharmaceutical, medical imaging, manufacturing, electronic, consumer, and industrial applications.5N Plus Inc. is headquartered in Montreal, Canada.
How the Company Makes Money5N Plus makes money primarily through the manufacturing and sale of high-purity materials and chemicals used in advanced technology applications. The company's revenue model is driven by its ability to produce and supply specialty materials that meet stringent industry standards. Key revenue streams include the sale of electronic materials used in semiconductors and optoelectronics, as well as eco-friendly materials utilized in renewable energy solutions. Significant partnerships with technology companies and manufacturers in these sectors contribute to its earnings by ensuring a steady demand for its products. Additionally, 5N Plus benefits from long-term supply agreements and its commitment to innovation, which allows it to maintain competitive advantages in niche markets.

5N Plus Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 34.38%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
The earnings call was predominantly positive with record revenue growth, significant EBITDA increases, and strategic expansions highlighting the company's strong start to the year. However, there were minor concerns regarding decreased backlog and a less favorable product mix in the Performance Materials segment.
Q1-2025 Updates
Positive Updates
Record Revenue Growth
5N Plus reported a 37% increase in revenue in Q1 2025, reaching $88.9 million, up from $65.1 million in Q1 2024.
Significant EBITDA Increase
Adjusted EBITDA grew by 77% to $20.8 million compared to $11.7 million in the same quarter last year.
Strong Performance in Specialty Semiconductors
Specialty Semiconductors revenue increased to $62.8 million from $45.2 million in Q1 2024, with an adjusted EBITDA increase of 85%.
Operational and Financial Strength
Gross margin improved by 51% to $30.4 million, and gross margin percentage increased to 34.2% from 30.9% in the previous year.
Strategic Investments and Expansions
Capacity at AZUR increased by 35% last year with plans for an additional 30% increase this year. An agreement with ALLOS Semiconductors was also made to develop a GaN IP portfolio.
Improved Financial Position
Net debt decreased by $7.8 million, with an improved net debt-to-EBITDA ratio of 1.6x.
Negative Updates
Decreased Backlog
Backlog days for Specialty Semiconductors and Performance Materials decreased by 28 and 71 days, respectively, compared to December 2024.
Less Favorable Product Mix
Performance Materials segment experienced a slight decline in gross margin percentage to 32.9% from 35.3% due to a less favorable product mix.
Company Guidance
During the first quarter of 2025, 5N Plus Inc. experienced significant growth, with revenue increasing by 37% to a record $88.9 million, compared to $65.1 million in the same period last year. This was driven primarily by strong demand in the terrestrial renewable energy and space solar power sectors, as well as increased sales of bismuth-based products. The company reported a 77% increase in adjusted EBITDA, reaching $20.8 million, and a 51% rise in adjusted gross margin to $30.4 million, marking a favorable impact from higher volumes and better pricing net of inflation. The adjusted gross margin percentage improved to 34.2%, up from 30.9% in Q1 of the previous year. Specialty Semiconductors generated $62.8 million in revenue, reflecting a 39% increase, while Performance Materials saw a 31% rise to $26.1 million. Despite a decrease in backlog to 268 days of annualized revenue, the company successfully reduced its net debt by $7.8 million to $92.3 million, achieving a net debt-to-EBITDA ratio of 1.6x. Looking forward, 5N Plus remains optimistic about sustained high demand in its strategic sectors, supported by strong fundamentals and market positioning, and continues to explore opportunities for both internal and external growth.

5N Plus Financial Statement Overview

Summary
5N Plus demonstrates strong revenue growth and profitability, as seen in robust profit margins and a stable balance sheet. However, the company faces challenges in cash flow management, with negative free cash flow and liquidity concerns.
Income Statement
85
Very Positive
The company has demonstrated robust revenue growth with a TTM increase of 8.3% from the previous year. Gross profit margin stands at 28.1% and net profit margin at 6.9%, both indicating strong profitability. EBIT and EBITDA margins are healthy at 12.7% and 18.7% respectively, showing efficient operational performance.
Balance Sheet
75
Positive
The balance sheet shows a stable financial position with a manageable debt-to-equity ratio of 1.01. Return on equity is strong at 14.4%, reflecting effective use of equity capital. The equity ratio is 38.3%, indicating a balanced capital structure.
Cash Flow
60
Neutral
The company faces challenges with cash flow, as evidenced by a negative free cash flow of $16.36 million in the TTM period. However, the operating cash flow to net income ratio is 0.01, suggesting a need for improved cash conversion. The free cash flow to net income ratio is negative, highlighting liquidity concerns.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
313.15M289.28M242.37M264.22M209.99M177.19M
Gross Profit
87.86M77.87M57.54M48.51M38.78M36.39M
EBIT
39.91M32.23M27.37M-12.78M12.87M13.50M
EBITDA
58.54M49.82M43.88M5.17M25.24M25.22M
Net Income Common Stockholders
21.74M14.67M15.40M-23.00M3.11M2.19M
Balance SheetCash, Cash Equivalents and Short-Term Investments
30.52M22.14M34.71M42.69M35.94M39.95M
Total Assets
395.97M376.91M350.20M347.99M373.59M226.68M
Total Debt
152.38M151.60M138.64M151.40M148.64M55.47M
Net Debt
121.86M129.46M103.93M108.71M112.70M15.52M
Total Liabilities
244.51M237.89M221.61M235.21M237.34M108.30M
Stockholders Equity
151.46M139.02M128.59M112.78M136.25M118.38M
Cash FlowFree Cash Flow
-16.36M-28.07M-992.00K6.69M4.34M28.25M
Operating Cash Flow
281.00K-6.89M17.25M23.74M10.27M36.80M
Investing Cash Flow
-5.54M-17.98M-12.36M-18.99M-49.93M-8.46M
Financing Cash Flow
1.72M12.39M-13.00M2.41M36.22M-8.80M

5N Plus Technical Analysis

Technical Analysis Sentiment
Positive
Last Price8.95
Price Trends
50DMA
6.91
Positive
100DMA
6.88
Positive
200DMA
6.88
Positive
Market Momentum
MACD
0.40
Positive
RSI
74.21
Negative
STOCH
77.55
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:VNP, the sentiment is Positive. The current price of 8.95 is above the 20-day moving average (MA) of 8.31, above the 50-day MA of 6.91, and above the 200-day MA of 6.88, indicating a bullish trend. The MACD of 0.40 indicates Positive momentum. The RSI at 74.21 is Negative, neither overbought nor oversold. The STOCH value of 77.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:VNP.

5N Plus Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSNEO
72
Outperform
C$463.41M-3.70%3.61%-12.01%-698.83%
TSVNP
71
Outperform
C$796.93M26.2115.41%28.27%36.49%
TSGMG
57
Neutral
C$65.11M-72.52%-9.37%22.80%
51
Neutral
$2.02B-1.14-21.36%3.64%2.88%-30.57%
TSHG
50
Neutral
C$61.38M-96.25%203.80%16.89%
TSECO
48
Neutral
C$236.11M-3.46%29.27%42.35%
45
Neutral
C$69.13M-51.47%13.34%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:VNP
5N Plus
8.95
2.78
45.06%
TSE:ECO
EcoSynthetix
4.02
-0.53
-11.65%
TSE:NANO
Nano One Materials
0.62
-0.99
-61.49%
TSE:NEO
Neo Performance Materials Inc
11.08
4.30
63.42%
TSE:GMG
Graphene Manufacturing Group Ltd
0.65
0.12
22.64%
TSE:HG
Hydrograph Clean Power
0.22
0.04
22.22%

5N Plus Corporate Events

Executive/Board ChangesShareholder Meetings
5N Plus Inc. Elects Board and Confirms Auditor at Annual Meeting
Positive
May 8, 2025

5N Plus Inc. announced the election of its board of directors at the recent Annual General Meeting, with Luc Bertrand re-appointed as Chairman. The meeting also confirmed PricewaterhouseCoopers LLP as the independent auditor for the upcoming year. These decisions reinforce the company’s leadership stability and operational continuity, potentially strengthening its market position and stakeholder confidence.

Business Operations and StrategyFinancial Disclosures
5N Plus Inc. Achieves Record Growth in Q1 2025
Positive
May 7, 2025

5N Plus Inc. reported a strong financial performance for the first quarter of 2025, with a 37% increase in revenue to $88.9 million and a 77% growth in Adjusted EBITDA to $20.8 million. The company attributes this success to strong demand in its strategic sectors and increased operational agility. Despite global trade volatility, 5N Plus maintains its leadership position by exploring opportunities to expand production capacity and meet future demand, reinforcing its commitment to long-term objectives and strategic initiatives.

Private Placements and FinancingBusiness Operations and Strategy
5N Plus Expands Credit Facilities to Fuel Growth
Positive
Apr 1, 2025

5N Plus Inc. has renewed its syndicated credit facilities, increasing its borrowing capacity from $124 million to $154 million, with the potential to further expand to $204 million. This financial move is designed to support the company’s growth strategy, focusing on value-added products and long-term customer partnerships. The oversubscribed credit facility, led by the Royal Bank of Canada and other financial institutions, underscores the confidence in 5N Plus’s market positioning as a leading supplier of critical specialty semiconductors.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.