Lithium Argentina AG (NYSE: LAR)

Sector: Basic Materials Industry: Other Industrial Metals & Mining CIK: 0001440972
Market Cap 1.31 Bn
P/B 1.72
P/E -16.30
P/S 0.00
ROIC (Qtr) -8.71
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 226.53 Mn
Debt/Equity (Qtr) 0.30

About

Price action

Investment thesis

Bull case

  • Robust free cash flow of (29.53M) exceeds capital expenditure of (2.67M) by 11.04x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 1.08B provides 4.76x coverage of total debt 226.53M, indicating robust asset backing and low credit risk.
  • Cash position of 64M provides exceptional 615.37x coverage of minority interest expenses 104000, indicating strong liquidity.
  • Cash reserves of 64M provide ample 42.78x coverage of acquisition spending 1.50M, enabling strategic growth opportunities.
  • Operating cash flow of (32.21M) provides strong 12.04x coverage of capital expenditure (2.67M), enabling organic growth.

Bear case

  • Operating cash flow of (32.21M) barely covers its investment activities of 4.17M, with a coverage ratio of -7.72, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 4.17M provide weak support for R&D spending of 7.77M, which is 0.54x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of (32.21M) shows concerning coverage of stock compensation expenses of 13.46M, with a -2.39 ratio indicating potential earnings quality issues.
  • Operating earnings of (51.82M) show weak coverage of depreciation charges of 550000, with a -94.22 ratio indicating high capital intensity and potential reinvestment needs.
  • Long-term investments of 644.23M represent a high 1.84x of fixed assets 349.91M, indicating potential overexposure to financial assets versus operational capabilities.

Peer comparison

Companies in the Other Industrial Metals & Mining
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BHP BHP Group Ltd 162.30 Bn 17.99 3.17 -
2 TECK Teck Resources Ltd 24.54 Bn 27.27 3.23 3.67 Bn
3 MP MP Materials Corp. / DE 10.73 Bn -91.17 46.08 1.00 Bn
4 SKE Skeena Resources Ltd 3.07 Bn -36.58 0.00 0.04 Bn
5 MTRN MATERION Corp 2.85 Bn 87.35 2.45 0.53 Bn
6 VZLA Vizsla Silver Corp. 2.28 Bn -205.10 0.00 0.00 Bn
7 SGML Sigma Lithium Corp 1.76 Bn -65.03 15.16 0.12 Bn
8 ALM Almonty Industries Inc. 1.65 Bn -145.44 82.20 0.14 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.36 3.13
EV to Cash from Ops. EV/CFO -45.51 -51.74
EV to Debt EV to Debt 6.47 863.55
EV to EBIT EV/EBIT -28.29 -27.66
EV to EBITDA EV/EBITDA -16.16 566.13
EV to Free Cash Flow [EV/FCF] EV/FCF -49.64 -24.46
EV to Market Cap EV to Market Cap 1.12 0.59
EV to Revenue EV/Rev 0.00 42.69
Price to Book Value [P/B] P/B 1.72 10.60
Price to Earnings [P/E] P/E -16.30 -35.19
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -16.20
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.46
Dividend per Basic Share Div per Share (Qtr) 0.00 0.08
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.53
Interest Coverage Int. cover (Qtr) -1.81 51.59
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 184.38 -444.92
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -30.68 3,116.99
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.80
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -104.06 -69.51
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -63.66 20.12
EBIT Growth (1y) % EBIT 1y % (Qtr) -104.06 -24.32
EBT Growth (1y) % EBT 1y % (Qtr) -106.43 -92.39
EPS Growth (1y) % EPS 1y % (Qtr) -614.29 -31.76
FCF Growth (1y) % FCF 1y % (Qtr) 15.97 -5,473.04
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.00 9.09
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.00 0.13
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.26 5.35
Current Ratio Curr Ratio (Qtr) 0.34 6.87
Debt to Equity Ratio Debt/Equity (Qtr) 0.30 0.74
Interest Cover Ratio Int Coverage (Qtr) -1.81 51.59
Times Interest Earned Times Interest Earned (Qtr) -1.81 51.59
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -684.18
EBIT Margin % EBIT Margin % (Qtr) 0.00 -696.12
EBT Margin % EBT Margin % (Qtr) 0.00 -788.27
Gross Margin % Gross Margin % (Qtr) 0.00 11.29
Net Profit Margin % Net Margin % (Qtr) 0.00 -790.78