Headwater Exploration Inc.
Headwater Exploration Inc. Fundamental Analysis
Headwater Exploration Inc. (HWX.TO) shows moderate financial fundamentals with a PE ratio of 22.79, profit margin of 24.12%, and ROE of 18.54%. The company generates $0.6B in annual revenue with weak year-over-year growth of -17.02%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 41.8/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze HWX.TO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentHWX.TO demonstrates superior asset utilization.
Valuation Score
ExcellentHWX.TO trades at attractive valuation levels.
Growth Score
WeakHWX.TO faces weak or negative growth trends.
Financial Health Score
ModerateHWX.TO shows balanced financial health with some risks.
Profitability Score
ExcellentHWX.TO achieves industry-leading margins.
Key Financial Metrics
Is HWX.TO Expensive or Cheap?
P/E Ratio
HWX.TO trades at 22.79 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, HWX.TO's PEG of -0.72 indicates potential undervaluation.
Price to Book
The market values Headwater Exploration Inc. at 4.17 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 10.41 times EBITDA. This signals the market has high growth expectations.
How Well Does HWX.TO Make Money?
Net Profit Margin
For every $100 in sales, Headwater Exploration Inc. keeps $24.12 as profit after all expenses.
Operating Margin
Core operations generate 34.80 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $18.54 in profit for every $100 of shareholder equity.
ROA
Headwater Exploration Inc. generates $13.48 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Headwater Exploration Inc. generates strong operating cash flow of $269.27M, reflecting robust business health.
Free Cash Flow
Headwater Exploration Inc. generates strong free cash flow of $67.19M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.28 in free cash annually.
FCF Yield
HWX.TO converts 2.12% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
22.79
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.72
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.17
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.50
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.003
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.98
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.23
vs 25 benchmark
How HWX.TO Stacks Against Its Sector Peers
| Metric | HWX.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 22.79 | 21.39 | Neutral |
| ROE | 18.54% | 922.00% | Weak |
| Net Margin | 24.12% | -57637.00% (disorted) | Strong |
| Debt/Equity | 0.00 | -0.49 (disorted) | Distorted |
| Current Ratio | 0.98 | 5.04 | Weak Liquidity |
| ROA | 13.48% | -1987.00% (disorted) | Strong |
HWX.TO outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Headwater Exploration Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
3072.32%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
1238.43%
Industry Style: Cyclical, Value, Commodity
High GrowthFCF CAGR
76105.65%
Industry Style: Cyclical, Value, Commodity
High Growth