Rio2 Limited Fundamental Analysis (TSX: RIO.TO)
Rio2 Limited (TSX: RIO.TO) shows moderate financial fundamentals with a PE ratio of 24.23, profit margin of 33.81%, and ROE of 22.56%. The company generates $0.1B in annual revenue with weak year-over-year growth of 0.00%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 57.1/100 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 RIO.TO's fundamental strength across five key dimensions:
Efficiency Score
WeakRIO.TO struggles to generate sufficient returns from assets.
Valuation Score
ExcellentRIO.TO trades at attractive valuation levels.
Growth Score
WeakRIO.TO faces weak or negative growth trends.
Financial Health Score
ModerateRIO.TO shows balanced financial health with some risks.
Profitability Score
ExcellentRIO.TO achieves industry-leading margins.
Key Financial Metrics
Is RIO.TO Expensive or Cheap?
P/E Ratio
RIO.TO trades at 24.23 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, RIO.TO's PEG of -0.00 indicates potential undervaluation.
Price to Book
The market values Rio2 Limited at 3.49 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 15.93 times EBITDA. This signals the market has high growth expectations.
How Well Does RIO.TO Make Money?
Net Profit Margin
For every $100 in sales, Rio2 Limited keeps $33.81 as profit after all expenses.
Operating Margin
Core operations generate 19.05 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $22.56 in profit for every $100 of shareholder equity.
ROA
Rio2 Limited generates $4.64 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Rio2 Limited generates strong operating cash flow of $93.30M, reflecting robust business health.
Free Cash Flow
Rio2 Limited produces free cash flow of $10.92M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.03 in free cash annually.
FCF Yield
RIO.TO converts 1.33% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
24.23
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.00
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.49
vs 25 benchmark
P/S Ratio
Price to sales ratio
6.21
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.25
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.91
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.23
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How RIO.TO Stacks Against Its Sector Peers
| Metric | RIO.TO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 24.23 | 27.37 | Better (Cheaper) |
| ROE | 22.56% | 1190.00% | Weak |
| Net Margin | 33.81% | 204.00% | Weak |
| Debt/Equity | 0.25 | 0.73 | Strong (Low Leverage) |
| Current Ratio | 0.91 | 3.14 | Weak Liquidity |
| ROA | 4.64% | 2758.00% | Weak |
RIO.TO outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Rio2 Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
0.00%
Industry Style: Cyclical, Commodity, Value
DecliningEPS CAGR
49.90%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
557.27%
Industry Style: Cyclical, Commodity, Value
High Growth