South32 Limited Fundamental Analysis (ASX: S32.AX)
South32 Limited (ASX: S32.AX) shows moderate financial fundamentals with a PE ratio of 15.60, profit margin of 18.37%, and ROE of 11.30%. The company generates $5.8B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 67.1/100 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 S32.AX's fundamental strength across five key dimensions:
Efficiency Score
WeakS32.AX struggles to generate sufficient returns from assets.
Valuation Score
ExcellentS32.AX trades at attractive valuation levels.
Growth Score
ModerateS32.AX shows steady but slowing expansion.
Financial Health Score
ExcellentS32.AX maintains a strong and stable balance sheet.
Profitability Score
ModerateS32.AX maintains healthy but balanced margins.
Key Financial Metrics
Is S32.AX Expensive or Cheap?
P/E Ratio
S32.AX trades at 15.60 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, S32.AX's PEG of 0.06 indicates potential undervaluation.
Price to Book
The market values South32 Limited at 1.73 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 13.30 times EBITDA. This signals the market has high growth expectations.
How Well Does S32.AX Make Money?
Net Profit Margin
For every $100 in sales, South32 Limited keeps $18.37 as profit after all expenses.
Operating Margin
Core operations generate 14.57 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $11.30 in profit for every $100 of shareholder equity.
ROA
South32 Limited generates $7.39 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
South32 Limited generates strong operating cash flow of $1.59B, reflecting robust business health.
Free Cash Flow
South32 Limited generates strong free cash flow of $1.61B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.36 in free cash annually.
FCF Yield
S32.AX converts 9.59% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
15.60
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.06
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.73
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.88
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.19
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.44
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How S32.AX Stacks Against Its Sector Peers
| Metric | S32.AX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 15.60 | 26.74 | Better (Cheaper) |
| ROE | 11.30% | 1215.00% | Weak |
| Net Margin | 18.37% | 433.00% | Weak |
| Debt/Equity | 0.19 | 0.73 | Strong (Low Leverage) |
| Current Ratio | 2.44 | 3.14 | Strong Liquidity |
| ROA | 7.39% | 2728.00% | Weak |
S32.AX outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews South32 Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Cyclical, Commodity, Value
EPS CAGR
N/A
Industry Style: Cyclical, Commodity, Value
FCF CAGR
N/A
Industry Style: Cyclical, Commodity, Value