Lynas Rare Earths Limited
Lynas Rare Earths Limited Fundamental Analysis
Lynas Rare Earths Limited (LYC.AX) shows moderate financial fundamentals with a PE ratio of 225.86, profit margin of 11.50%, and ROE of 2.88%. The company generates $0.7B in annual revenue with strong year-over-year growth of 16.84%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 57.5/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze LYC.AX's fundamental strength across five key dimensions:
Efficiency Score
WeakLYC.AX struggles to generate sufficient returns from assets.
Valuation Score
ModerateLYC.AX shows balanced valuation metrics.
Growth Score
ModerateLYC.AX shows steady but slowing expansion.
Financial Health Score
ExcellentLYC.AX maintains a strong and stable balance sheet.
Profitability Score
WeakLYC.AX struggles to sustain strong margins.
Key Financial Metrics
Is LYC.AX Expensive or Cheap?
P/E Ratio
LYC.AX trades at 225.86 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, LYC.AX's PEG of 0.25 indicates potential undervaluation.
Price to Book
The market values Lynas Rare Earths Limited at 5.53 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 105.07 times EBITDA. This signals the market has high growth expectations.
How Well Does LYC.AX Make Money?
Net Profit Margin
For every $100 in sales, Lynas Rare Earths Limited keeps $11.50 as profit after all expenses.
Operating Margin
Core operations generate 11.84 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $2.88 in profit for every $100 of shareholder equity.
ROA
Lynas Rare Earths Limited generates $2.06 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Lynas Rare Earths Limited produces operating cash flow of $146.94M, showing steady but balanced cash generation.
Free Cash Flow
Lynas Rare Earths Limited generates weak or negative free cash flow of $-21.30M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.02 in free cash annually.
FCF Yield
LYC.AX converts -0.11% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
225.86
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.25
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.53
vs 25 benchmark
P/S Ratio
Price to sales ratio
26.68
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.09
vs 25 benchmark
Current Ratio
Current assets to current liabilities
9.25
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.03
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How LYC.AX Stacks Against Its Sector Peers
| Metric | LYC.AX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 225.86 | 26.70 | Worse (Expensive) |
| ROE | 2.88% | 828.00% | Weak |
| Net Margin | 11.50% | -122621.00% (disorted) | Strong |
| Debt/Equity | 0.09 | 0.42 | Strong (Low Leverage) |
| Current Ratio | 9.25 | 4.90 | Strong Liquidity |
| ROA | 2.06% | -6867.00% (disorted) | Weak |
LYC.AX outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Lynas Rare Earths Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
30.02%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
131.00%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
180.70%
Industry Style: Cyclical, Commodity, Value
High Growth