Largo Reports Q1 2025 Financial Results with Continued Focus on Production Stability and Cost Reduction Efforts
All dollar amounts expressed are in thousands of U.S. dollars unless otherwise indicated.
Q1 2025 and Other Highlights
Revenues of $28.2 million in Q1 2025 vs. 42.2 million in Q1 2024; Revenues per pound sold1 of $6.04 in Q1 2025 vs. $6.91 in Q1 2024; Lower revenues are a result of continued downward pressure in vanadium prices and lower sales volumes
Operating costs of $42.5 million in Q1 2025, 15% below Q1 2024
Adjusted cash operating costs excluding royalties per pound1 of $3.88 in Q1 2025, 27% below Q1 2024, despite mining lower ore grades and decreased production rates
Net loss of $9.2 million in Q1 2025, which included $7.0 million in non-recurring items vs. a net loss of $13.0 million in Q1 2024, which included $4.4 million in non-recurring items
Basic loss per share of $0.14 in Q1 2025 vs. basic loss per share of $0.20 in Q1 2024
V2O5 equivalent sales of 2,046 tonnes (inclusive of 158 tonnes of purchased material) in Q1 2025 vs. 2,765 equivalent tonnes sold (inclusive of 156 tonnes of purchased material) in Q1 2024
V2O5 production of 1,297 tonnes (2.8 million lbs2) in Q1 2025 vs. 1,729 tonnes produced in Q1 2024; Lower production in Q1 2025 was primarily due to impacts from mining lower-grade ore zones required as part the Company's open pit mine sequencing, reduced equipment availability on an expanded mine contractor fleet, and operational adjustments related to the kiln refractory replacement completed in Q4 2024, which required additional adjustments in early 2025
The Company produced 6,162 tonnes of ilmenite concentrate in Q1 2025 vs. 9,563 tonnes in Q1 2024, and sold 8,647 tonnes vs. 513 tonnes in Q1 2024
The Company maintains its revised 2025 production, sales and cost guidance and expects a return to more normalized production levels over the remainder of the year as throughput increases and operational turnaround initiatives progress
Vanadium Market Update
Vanadium markets in Europe and China remain weak, pressured by low steel and infrastructure demand and oversupply from Chinese and Russian producers, though aerospace demand is expected to pick up in the second half of 2025
U.S. ferrovanadium ("FeV") prices are holding at levels approximately 9% higher than at the start of 2025, supported by increased buying interest amid geopolitical tensions and policy shifts that have tightened supply dynamics
The average benchmark price per pound of V2O5 in Europe was $5.26 in Q1 2025, a 18% decrease from the average of $6.44 seen in Q1 2024; The average benchmark price per kg of FeV in Europe was $24.26 in Q1 2025, a 13% decrease from the average of $27.96 seen in Q1 2024
As of May 8, 2025, the average benchmark FeV price per pound of V was $15.25 in the U.S. (or approximately $33.62 per kg FeV), and as of May 9, 2025, the average benchmark price per pound of V₂O₅ was $5.20 in Europe
TORONTO, May 14, 2025--(BUSINESS WIRE)--Largo Inc. ("Largo" or the "Company") (TSX: LGO) (NASDAQ: LGO) today released financial results for the three months ended March 31, 2025. The Company reported quarterly vanadium pentoxide ("V2O5") equivalent sales of 2,046 tonnes at an adjusted cash operating cost excluding royalties per pound1 sold of $3.88.
Daniel Tellechea, Interim CEO and Director of Largo, stated: "Our first quarter results reflect the impact of lower production levels, which constrained sales volumes, combined with continued pricing pressure in the vanadium market, all of which significantly affected our revenues and added pressure to our cash position. Despite this environment, Largo achieved a 15% reduction in overall operating costs compared to Q1 2024 as well as a 27% reduction in our adjusted cash operating costs excluding royalties1, reflecting a continued focus on cost-control initiatives and operational efficiency improvements. We continue to actively advance our operational turnaround plan, implementing targeted initiatives aimed at further reducing costs and improving productivity at our Maracás Menchen Mine."
He continued: "Following the completion of our Storion Energy joint venture transaction, Largo is better positioned to allocate resources and focus on strengthening core mining operations in Brazil, while maintaining a long-term view on the potential of long duration energy storage solutions in the U.S. Looking ahead, securing near-term financing solutions remains a priority as we work to support our liquidity needs and ensure Largo is positioned to navigate ongoing market uncertainty."
Financial and Operating Results – Highlights
Financial figures expressed in thousands of U.S. dollars, except as otherwise stated
Three months ended
Mar. 31, 2025
Mar. 31, 2024
Revenues
28,235
42,187
Operating costs
(42,477)
(49,707)
Net loss
(9,205)
(13,006)
Basic earnings (loss) per share
(0.14)
(0.20)
Adjusted EBITDA1
(2,774)
(2,425)
Mining operations adjusted EBITDA1
(697)
250
Cash used before working capital items (operating activities)
(8,492)
(3,188)
Cash operating costs excl. royalties1 ($/lb)
6.54
6.12
Adjusted cash operating costs excl. royalties1 ($/lb)
3.88
5.33
Cash
8,445
45,656
Debt
92,115
75,000
Total mined – dry basis (tonnes)
3,933,242
3,243,492
Total ore mined (tonnes)
446,614
604,231
Effective grade3 of ore milled (%)
0.53
0.82
V2O5 equivalent production (tonnes)
1,297
1,729
V2O5 equivalent sales (tonnes)
2,046
2,765
Ilmenite concentrate sales (tonnes)
8,647
513
Key Highlights
During Q1 2025, the Company recognized revenues of $27.5 million (Q1 2024 – $42.2 million) from the sales of 2,046 tonnes of V2O5 equivalent (Q1 2024 – 2,765 tonnes) as well as revenues from ilmenite sales of $0.7 million (Q1 2024 - $0.07 million).
The Company recorded a net loss of $9.2 million in Q1 2025 compared with a net loss of $13.0 million in Q1 2024. The improvement was primarily due to the gain on disposal of interest in subsidiary of $5.2 million and a 15% decrease in operating costs.
The Company's operating costs decreased by 15% to $42.5 million in Q1 2025 compared to 49.7 million in Q1 2024. The decrease in operating costs in Q1 2025 was largely driven by a 48% decrease in direct mine and production costs, reflecting a 25% decrease in vanadium sold in 2024, as well as the impact of the Company's previously announced initiatives to reduce production costs and improve productivity and the impact of inventory write-downs in the current and prior periods. The inventory write-down in Q1 2025 includes a write-down of produced vanadium finished products of $11.2 million and a write-down reversal of warehouse materials of $0.1 million.
Cash operating costs excluding royalties per pound1 were $6.54 per lb in Q1 2025, compared with $6.12 for Q1 2024. The increase seen in Q1 2025 compared with Q1 2024 is largely due lower sales volumes of in Q1 2025 and increased inventory write-downs. Mining in lower grade ore zones also impacted the financial performance. Additionally, lower ore mined resulted in stoppages at the kiln and plant which also contributed to increased costs in Q1 2025. The Company continues to make progress with a number of initiatives as part of its operational turnaround plan with the goal of reducing production costs and improving productivity (see press release dated March 28, 2025).
Adjusted cash operating costs excluding royalties per pound1, which excludes the impact of inventory write-downs was $3.88 per lb sold in Q1 2025, compared with $5.33 for Q1 2024.
Professional, consulting and management fees, other general and administrative expenses, and technology start-up costs in Q1 2025 decreased by 18%, 37%, and 82%, respectively, compared to Q1 2024, primarily due to reduced headcount and activity at LCE.
On January 31, 2025 (the "Closing Date"), the Company and affiliates of Stryten Energy LLC closed the previously disclosed transaction to establish Storion Energy LLC ("Storion"). Storion has commenced operations and is working to qualify their electrolyte product with potential customers. In addition, 13 employees of Largo Clean Energy Corp. ("LCE") moved to Storion on the Closing Date, resulting in a reduced headcount at LCE at the end of Q1 2025.
Subsequent to Q1 2025, production and sales in were 481 tonnes and 608 tonnes of V2O5 equivalent, respectively, in April 2025, with 1,833 tonnes of ilmenite concentrate being produced during this period and 1,914 dry tonnes of ilmenite being sold.
The information provided within this release should be read in conjunction with Largo's unaudited condensed interim consolidated financial statements for the three months ended March 31, 2025 and 2024 and its management's discussion and analysis for the three months ended March 31, 2025 which are available on our website at www.largoinc.com or on the Company's respective profiles at www.sedarplus.com and www.sec.gov.
About Largo
Largo is a globally recognized supplier of high-quality vanadium and ilmenite products, sourced from its world-class Maracás Menchen Mine in Brazil. As one of the world's largest primary vanadium producers, Largo produces critical materials that empower global industries, including steel, aerospace, defense, chemical, and energy storage sectors. The Company is committed to operational excellence and sustainability, leveraging its vertical integration to ensure reliable supply and quality for its customers.
Largo is also strategically invested in the long-duration energy storage sector through its 50% ownership of Storion Energy, a joint venture with Stryten Energy focused on scalable domestic electrolyte production for utility-scale vanadium flow battery long-duration energy storage solutions in the U.S.
Largo's common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol "LGO". For more information on the Company, please visit www.largoinc.com.
Cautionary Statement Regarding Forward-looking Information:
This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and United States securities legislation. Forward‐looking information in this press release includes, but is not limited to, statements with respect to the timing and amount of estimated future production and sales; the future price of commodities; costs of future activities and operations, including, without limitation, the effect of inflation and exchange rates; the effect of unforeseen equipment maintenance or repairs on production; the ability to produce high purity V2O5 and V2O3 according to customer specifications; the extent of capital and operating expenditures; the ability of the Company to make improvements on its current short-term mine plan; and the impact of global delays and related price increases on the Company's global supply chain and future sales of vanadium products.
The following are some of the assumptions upon which forward-looking information is based: that general business and economic conditions will not change in a material adverse manner; demand for, and stable or improving price of V2O5 and other vanadium products, ilmenite and titanium dioxide pigment; receipt of regulatory and governmental approvals, permits and renewals in a timely manner; that the Company will not experience any material accident, labour dispute or failure of plant or equipment or other material disruption in the Company's operations at the Maracás Menchen Mine or relating to Largo Clean Energy, specially in respect of the installation and commissioning of the EGPE project; the availability of financing for operations and development; the availability of funding for future capital expenditures; the ability to replace current funding on terms satisfactory to the Company; the ability to mitigate the impact of heavy rainfall; the reliability of production, including, without limitation, access to massive ore, the Company's ability to procure equipment, services and operating supplies in sufficient quantities and on a timely basis; that the estimates of the resources and reserves at the Maracás Menchen Mine are within reasonable bounds of accuracy (including with respect to size, grade and recovery and the operational and price assumptions on which such estimates are based); the accuracy of the Company's mine plan at the Maracás Menchen Mine; that the Company's current plans for ilmenite can be achieved; the Company's ability to protect and develop its technology; the Company's ability to maintain its IP; the competitiveness of the Company's product in an evolving market; the Company's ability to attract and retain skilled personnel and directors; the ability of management to execute strategic goals; that the Company will enter into agreements for the sales of vanadium, ilmenite and TiO2 products on favourable terms and for the sale of substantially all of its annual production capacity; and receipt of regulatory and governmental approvals, permits and renewals in a timely manner.
Forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved", although not all forward-looking statements include those words or phrases. In addition, any statements that refer to expectations, intentions, projections, guidance, potential or other characterizations of future events or circumstances contain forward-looking information. Forward-looking statements are not historical facts nor assurances of future performance but instead represent management's expectations, estimates and projections regarding future events or circumstances. Forward-looking statements are based on our opinions, estimates and assumptions that we considered appropriate and reasonable as of the date such information is stated, subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Largo to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on www.sedarplus.ca and available on www.sec.gov from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo's annual and interim MD&A which also apply.
Trademarks are owned by Largo Inc.
Non-GAAP Measures
The Company uses certain non-GAAP measures in its press release, which are described in the following section. Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS, the Company's GAAP, and might not be comparable to similar financial measures disclosed by other issuers. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Management believes that non-IFRS financial measures, when supplementing measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company.
Revenues Per Pound
The Company's press release refers to revenues per pound sold, V2O5 revenues per pound of V2O5 sold, V2O3 revenues per pound of V2O3 sold and FeV revenues per kg of FeV sold, which are non-GAAP financial measures that are used to provide investors with information about a key measure used by management to monitor performance of the Company.
These measures, along with cash operating costs, are considered to be key indicators of the Company's ability to generate operating earnings and cash flow from its Maracás Menchen Mine and sales activities. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.
The following table provides a reconciliation of revenues per pound sold, V2O5 revenues per pound of V2O5 sold, V2O3 revenues per pound of V2O3 sold and FeV revenues per kg of FeV sold to revenues and the revenue information presented in note 23 as per the Q1 2025 unaudited condensed interim consolidated financial statements.
Three months ended
March 31, 2025
March 31, 2024
Revenues - V2O5 producedi
$
12,133
$
21,558
V2O5 sold - produced (000s lb)
2,119
3,113
V2O5 revenues per pound of V2O5 sold - produced ($/lb)
$
5.73
$
6.93
Revenues - V2O5 purchasedi
$
—
$
988
V2O5 sold - purchased (000s lb)
—
176
V2O5 revenues per pound of V2O5 sold - purchased ($/lb)
$
—
$
5.61
Revenues - V2O5i
$
12,133
$
22,546
V2O5 sold (000s lb)
2,119
3,289
V2O5 revenues per pound of V2O5 sold ($/lb)
$
5.73
$
6.85
Revenues - V2O3 producedi
$
1,296
$
6,203
V2O3 sold - produced (000s lb)
165
668
V2O3 revenues per pound of V2O3 sold - produced ($/lb)
$
7.85
$
9.29
Revenues - FeV produced1
$
11,712
$
12,249
FeV sold - produced (000s kg)
574
569
FeV revenues per kg of FeV sold - produced ($/kg)
$
20.40
$
21.53
Revenues - FeV purchased1
$
2,356
$
1,120
FeV sold - purchased (000s kg)
105
51
FeV revenues per kg of FeV sold - purchased ($/kg)
$
22.44
$
21.96
Revenues – FeVi
$
14,068
$
13,369
FeV sold (000s kg)
679
620
FeV revenues per kg of FeV sold ($/kg)
$
20.72
$
21.56
Revenues1
$
27,497
$
42,118
V2O5 equivalent sold (000s lb)
4,555
6,096
Revenues per pound sold ($/lb)
$
6.04
$
6.91
Year ended as per note 19 of the Company's Q1 2025 unaudited condensed interim consolidated financial statements.
Cash Operating Costs Excluding Royalties Per Pound
The Company's press release refers to cash operating costs per pound, cash operating costs excluding royalties per pound and adjusted cash operating costs excluding royalties per pound, which are non-GAAP ratios based on cash operating costs, cash operating costs excluding royalties and adjusted cash operating costs excluding royalties, which are non-GAAP financial measures, in order to provide investors with information about a key measure used by management to monitor performance. This information is used to assess how well the Maracás Menchen Mine is performing compared to its plan and prior periods, and to also to assess its overall effectiveness and efficiency.
Cash operating costs includes mine site operating costs such as mining costs, plant and maintenance costs, sustainability costs, mine and plant administration costs, royalties and sales, general and administrative costs (all for the Mine properties segment), but excludes depreciation and amortization, share-based payments, foreign exchange gains or losses, commissions, reclamation, capital expenditures and exploration and evaluation costs. Operating costs not attributable to the Mine properties segment are also excluded, including conversion costs, product acquisition costs, distribution costs and inventory write-downs.
Cash operating costs excluding royalties is calculated as cash operating costs less royalties.
Adjusted cash operating costs excluding royalties is calculated as cash operating costs excluding royalties less write-downs of produced products.
Cash operating costs per pound, cash operating costs excluding royalties per pound and adjusted cash operating costs excluding royalties per pound are obtained by dividing cash operating costs, cash operating costs excluding royalties and adjusted cash operating costs excluding royalties, respectively, by the pounds of vanadium equivalent sold that were produced by the Maracás Menchen Mine.
Cash operating costs, cash operating costs excluding royalties, adjusted cash operating costs excluding royalties, cash operating costs per pound, cash operating costs excluding royalties per pound and adjusted cash operating costs excluding royalties per pound, along with revenues, are considered to be key indicators of the Company's ability to generate operating earnings and cash flow from its Maracás Menchen Mine. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.
The following table provides a reconciliation of cash operating costs, cash operating costs excluding royalties, adjusted cash operating costs excluding royalties, cash operating costs per pound, cash operating costs excluding royalties per pound and adjusted cash operating costs excluding royalties per pound for the Maracás Menchen Mine to operating costs as per the Q1 2025 unaudited condensed interim consolidated financial statements.
Three months ended
March 31,
2025
March 31,
2024
Operating costsi
$
42,477
$
49,707
Professional, consulting and management feesii
535
462
Other general and administrative expensesiii
179
279
Less: ilmenite costs and write-downi
(2,220
)
(47
)
Less: conversion costsi
(2,991
)
(2,023
)
Less: product acquisition costsi
(2,357
)
(2,050
)
Less: distribution costsi
(1,577
)
(1,818
)
Less: inventory write-downiv
1
446
Less: depreciation and amortization expensei
(5,462
)
(8,077
)
Cash operating costs
$
28,585
$
36,879
Less: royalties1
(1,072
)
(1,673
)
Cash operating costs excluding royalties
$
27,513
$
35,206
Less: vanadium inventory write-downv
(11,206
)
(4,526
)
Adjusted cash operating costs excluding royalties
16,307
30,680
Produced V2O5 sold (000s lb)
4,206
5,753
Cash operating costs per pound ($/lb)
$
6.80
$
6.41
Cash operating costs excluding royalties per pound ($/lb)
$
6.54
$
6.12
Adjusted cash operating costs excluding royalties per pound ($/lb)
$
3.88
$
5.33
As per note 20 of the Company's Q1 2025 unaudited condensed interim consolidated financial statements.
As per the Mine properties segment in note 16 of the Company's Q1 2025 unaudited condensed interim consolidated financial statements.
As per the Mine properties segment in note 16 of the Company's Q1 2025 unaudited condensed interim consolidated financial statements less the increase in legal provisions of $347 (for Q1 2025) as noted in the "other general and administrative expenses" section on page 6 of the Company's Q1 2025 MD&A.
As per note 5 of the Company's Q1 2025 unaudited condensed interim consolidated financial statements for ilmenite finished products and warehouse supplies, and including a write-down of vanadium purchased products of $10 for the three months ended March 31, 2025 ($nil in the same prior year period).
As per note 5 of the Company's Q1 2025 unaudited condensed interim consolidated financial statements for vanadium finished products, excluding amounts in note 4 above for vanadium purchased products.
EBITDA and Adjusted EBITDA
The Company's press release refers to earnings before interest, tax, depreciation and amortization, or "EBITDA", and adjusted EBITDA, which are non-GAAP financial measures, in order to provide investors with information about key measures used by management to monitor performance. EBITDA is used as an indicator of the Company's ability to generate liquidity by producing operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures.
Adjusted EBITDA removes the effect of inventory write-downs, impairment charges (including write-downs of vanadium assets), insurance proceeds received, movements in legal provisions, non-recurring employee settlements and other expense adjustments that are considered to be non-recurring for the Company. The Company believes that by excluding these amounts, which are not indicative of the performance of the core business and do not necessarily reflect the underlying operating results for the periods presented, it will assist analysts, investors and other stakeholders of the Company in better understanding the Company's ability to generate liquidity from its core business activities.
EBITDA and adjusted EBITDA are intended to provide additional information to analysts, investors and other stakeholders of the Company and do not have any standardized definition under IFRS. These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures exclude the impact of depreciation, costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore are not necessarily indicative of operating profit or cash flow from operating activities as determined under IFRS. Other companies may calculate EBITDA and adjusted EBITDA differently.
The following table provides a reconciliation of EBITDA and adjusted EBITDA to net income (loss) as per the Q1 2025 unaudited condensed interim consolidated financial statements.
Three months ended
March 31, 2025
March 31, 2024
Net loss
$
(9,205
)
$
(13,006
)
Foreign exchange gain (loss)
(5,791
)
911
Share-based payments
110
290
Finance costs
2,151
1,812
Interest income
(121
)
(306
)
Income tax expense
50
22
Deferred income tax recovery
(2,666
)
(5,329
)
Depreciationi
5,683
8,724
EBITDA
$
(9,789
)
$
(6,882
)
Inventory write-downii
11,580
4,080
Write-down of vanadium assets
267
(114
)
Movement in legal provisionsiii
347
491
Gain on disposal of interest in subsidiary
(5,179
)
—
Adjusted EBITDA
$
(2,774
)
$
(2,425
)
Less: Clean Energy Adjusted EBITDA
1,778
2,484
Less: LPV Adjusted EBITDA
299
191
Mining Operations Adjusted EBITDA
$
(697
)
$
250
As per the consolidated statements of cash flows in the Company's Q1 2025 unaudited condensed interim consolidated financial statements.
As per note 5 of the Company's Q1 2025 unaudited condensed interim consolidated financial statements.
As per then "non-recurring items" section on page 7 of the Company's Q1 2025 MD&A.
______________________________________1 Revenues per pound sold, Adjusted EBITDA, Mining operations adjusted EBITDA, adjusted cash operating costs excluding royalties and cash operating costs excluding royalties are non-GAAP ratios with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non-GAAP Measures" section of this press release.2 Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs.3 Effective grade represents the percentage of magnetic material mined multiplied by the percentage of V2O5 in the magnetic concentrate
View source version on businesswire.com: https://www.businesswire.com/news/home/20250514691044/en/
Contacts
For further information, please contact:Investor Relations Alex Guthrie Director, Investor Relations+1.416.861.9778aguthrie@largoinc.com
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National CineMedia (NASDAQ:NCMI) investors are sitting on a loss of 79% if they invested five years ago
Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. Anyone who held National CineMedia, Inc. (NASDAQ:NCMI) for five years would be nursing their metaphorical wounds since the share price dropped 83% in that time. Furthermore, it's down 11% in about a quarter. That's not much fun for holders. While a drop like that is definitely a body blow, money isn't as important as health and happiness. Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Because National CineMedia made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size. Over five years, National CineMedia grew its revenue at 1.6% per year. That's not a very high growth rate considering it doesn't make profits. Nonetheless, it's fair to say the rapidly declining share price (down 13%, compound, over five years) suggests the market is very disappointed with this level of growth. We'd be pretty cautious about this one, although the sell-off may be too severe. We'd recommend focussing any further research on the likelihood of profitability in the foreseeable future, given the muted revenue growth. You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image). You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic. It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, National CineMedia's TSR for the last 5 years was -79%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence! We're pleased to report that National CineMedia shareholders have received a total shareholder return of 19% over one year. That's including the dividend. There's no doubt those recent returns are much better than the TSR loss of 12% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with National CineMedia , and understanding them should be part of your investment process. But note: National CineMedia may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. — Investing narratives with Fair Values Vita Life Sciences Set for a 12.72% Revenue Growth While Tackling Operational Challenges By Robbo – Community Contributor Fair Value Estimated: A$2.42 · 0.1% Overvalued Vossloh rides a €500 billion wave to boost growth and earnings in the next decade By Chris1 – Community Contributor Fair Value Estimated: €78.41 · 0.1% Overvalued Intuitive Surgical Will Transform Healthcare with 12% Revenue Growth By Unike – Community Contributor Fair Value Estimated: $325.55 · 0.6% Undervalued View more featured narratives — Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
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York Water (NASDAQ:YORW) shareholders have endured a 26% loss from investing in the stock five years ago
The main aim of stock picking is to find the market-beating stocks. But every investor is virtually certain to have both over-performing and under-performing stocks. So we wouldn't blame long term The York Water Company (NASDAQ:YORW) shareholders for doubting their decision to hold, with the stock down 33% over a half decade. Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. During the unfortunate half decade during which the share price slipped, York Water actually saw its earnings per share (EPS) improve by 2.6% per year. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Alternatively, growth expectations may have been unreasonable in the past. By glancing at these numbers, we'd posit that the the market had expectations of much higher growth, five years ago. Having said that, we might get a better idea of what's going on with the stock by looking at other metrics. Revenue is actually up 8.6% over the time period. A more detailed examination of the revenue and earnings may or may not explain why the share price languishes; there could be an opportunity. The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image). It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So it makes a lot of sense to check out what analysts think York Water will earn in the future (free profit forecasts). When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of York Water, it has a TSR of -26% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments! Investors in York Water had a tough year, with a total loss of 9.3% (including dividends), against a market gain of about 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - York Water has 2 warning signs (and 1 which is significant) we think you should know about. If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. — Investing narratives with Fair Values Vita Life Sciences Set for a 12.72% Revenue Growth While Tackling Operational Challenges By Robbo – Community Contributor Fair Value Estimated: A$2.42 · 0.1% Overvalued Vossloh rides a €500 billion wave to boost growth and earnings in the next decade By Chris1 – Community Contributor Fair Value Estimated: €78.41 · 0.1% Overvalued Intuitive Surgical Will Transform Healthcare with 12% Revenue Growth By Unike – Community Contributor Fair Value Estimated: $325.55 · 0.6% Undervalued View more featured narratives — Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
