Latest news with #SandfireResources'
Yahoo
15-03-2025
- Business
- Yahoo
Sandfire Resources Limited's (ASX:SFR) Has Performed Well But Fundamentals Look Varied: Is There A Clear Direction For The Stock?
Sandfire Resources' (ASX:SFR) stock is up by 9.0% over the past three months. However, the company's financials look a bit inconsistent and market outcomes are ultimately driven by long-term fundamentals, meaning that the stock could head in either direction. Particularly, we will be paying attention to Sandfire Resources' ROE today. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. View our latest analysis for Sandfire Resources The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Sandfire Resources is: 4.8% = US$84m ÷ US$1.7b (Based on the trailing twelve months to December 2024). The 'return' is the yearly profit. So, this means that for every A$1 of its shareholder's investments, the company generates a profit of A$0.05. Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. On the face of it, Sandfire Resources' ROE is not much to talk about. We then compared the company's ROE to the broader industry and were disappointed to see that the ROE is lower than the industry average of 11%. For this reason, Sandfire Resources' five year net income decline of 31% is not surprising given its lower ROE. We reckon that there could also be other factors at play here. For example, it is possible that the business has allocated capital poorly or that the company has a very high payout ratio. However, when we compared Sandfire Resources' growth with the industry we found that while the company's earnings have been shrinking, the industry has seen an earnings growth of 19% in the same period. This is quite worrisome. Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Has the market priced in the future outlook for SFR? You can find out in our latest intrinsic value infographic research report. While the company did payout a portion of its dividend in the past, it currently doesn't pay a regular dividend. This implies that potentially all of its profits are being reinvested in the business. In total, we're a bit ambivalent about Sandfire Resources' performance. While the company does have a high rate of reinvestment, the low ROE means that all that reinvestment is not reaping any benefit to its investors, and moreover, its having a negative impact on the earnings growth. That being so, the latest industry analyst forecasts show that the analysts are expecting to see a huge improvement in the company's earnings growth rate. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. 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.
Yahoo
21-02-2025
- Business
- Yahoo
Sandfire Resources Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Last week saw the newest half-year earnings release from Sandfire Resources Limited (ASX:SFR), an important milestone in the company's journey to build a stronger business. Revenues were US$558m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.11 were also better than expected, beating analyst predictions by 13%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results. See our latest analysis for Sandfire Resources Following the latest results, Sandfire Resources' 15 analysts are now forecasting revenues of US$1.18b in 2025. This would be a solid 8.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 41% to US$0.27. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.21b and earnings per share (EPS) of US$0.29 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates. The analysts made no major changes to their price target of AU$10.61, suggesting the downgrades are not expected to have a long-term impact on Sandfire Resources' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sandfire Resources, with the most bullish analyst valuing it at AU$12.00 and the most bearish at AU$9.10 per share. This is a very narrow spread of estimates, implying either that Sandfire Resources is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions. Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Sandfire Resources'historical trends, as the 19% annualised revenue growth to the end of 2025 is roughly in line with the 16% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.7% per year. So it's pretty clear that Sandfire Resources is forecast to grow substantially faster than its industry. The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sandfire Resources. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates. With that in mind, we wouldn't be too quick to come to a conclusion on Sandfire Resources. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Sandfire Resources analysts - going out to 2027, and you can see them free on our platform here. You can also view our analysis of Sandfire Resources' balance sheet, and whether we think Sandfire Resources is carrying too much debt, for free on our platform here. 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.
Yahoo
10-02-2025
- Business
- Yahoo
Sandfire Resources (ASX:SFR) shareholder returns have been solid, earning 142% in 5 years
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. Long term Sandfire Resources Limited (ASX:SFR) shareholders would be well aware of this, since the stock is up 103% in five years. It's also up 8.1% in about a month. Since it's been a strong week for Sandfire Resources shareholders, let's have a look at trend of the longer term fundamentals. See our latest analysis for Sandfire Resources Sandfire Resources wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit. In the last 5 years Sandfire Resources saw its revenue grow at 18% per year. Even measured against other revenue-focussed companies, that's a good result. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 15% per year, in that time. This suggests the market has well and truly recognized the progress the business has made. Sandfire Resources seems like a high growth stock - so growth investors might want to add it to their watchlist. You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image). Sandfire Resources is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts We've already covered Sandfire Resources' share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Sandfire Resources' TSR of 142% for the 5 years exceeded its share price return, because it has paid dividends. It's good to see that Sandfire Resources has rewarded shareholders with a total shareholder return of 52% in the last twelve months. That gain is better than the annual TSR over five years, which is 19%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. If you would like to research Sandfire Resources in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian exchanges. 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
