Sandfire Resources Limited Fundamental Analysis (ASX: SFR.AX)
Sandfire Resources Limited (ASX: SFR.AX) shows strong financial fundamentals with a PE ratio of 19.69, profit margin of 21.53%, and ROE of 17.19%. The company generates $1.7B in annual revenue with strong year-over-year growth of 28.63%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 83.7/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze SFR.AX's fundamental strength across five key dimensions:
Efficiency Score
ExcellentSFR.AX demonstrates superior asset utilization.
Valuation Score
ExcellentSFR.AX trades at attractive valuation levels.
Growth Score
ModerateSFR.AX shows steady but slowing expansion.
Financial Health Score
ExcellentSFR.AX maintains a strong and stable balance sheet.
Profitability Score
ExcellentSFR.AX achieves industry-leading margins.
Key Financial Metrics
Is SFR.AX Expensive or Cheap?
P/E Ratio
SFR.AX trades at 19.69 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, SFR.AX's PEG of 0.10 indicates potential undervaluation.
Price to Book
The market values Sandfire Resources Limited at 3.12 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 8.55 times EBITDA. This is generally considered low.
How Well Does SFR.AX Make Money?
Net Profit Margin
For every $100 in sales, Sandfire Resources Limited keeps $21.53 as profit after all expenses.
Operating Margin
Core operations generate 32.19 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $17.19 in profit for every $100 of shareholder equity.
ROA
Sandfire Resources Limited generates $10.98 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Sandfire Resources Limited generates strong operating cash flow of $716.19M, reflecting robust business health.
Free Cash Flow
Sandfire Resources Limited generates strong free cash flow of $516.67M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.11 in free cash annually.
FCF Yield
SFR.AX converts 7.33% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
19.69
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.10
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.12
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.25
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.02
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.08
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.17
vs 25 benchmark
ROA
Return on assets percentage
0.11
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How SFR.AX Stacks Against Its Sector Peers
| Metric | SFR.AX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 19.69 | 25.21 | Better (Cheaper) |
| ROE | 17.19% | 1254.00% | Weak |
| Net Margin | 21.53% | 450.00% | Weak |
| Debt/Equity | 0.02 | 0.73 | Strong (Low Leverage) |
| Current Ratio | 2.08 | 3.14 | Strong Liquidity |
| ROA | 10.98% | 2649.00% | Weak |
SFR.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 Sandfire Resources Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-22.33%
Industry Style: Cyclical, Commodity, Value
DecliningEPS CAGR
-46.74%
Industry Style: Cyclical, Commodity, Value
DecliningFCF CAGR
-18.75%
Industry Style: Cyclical, Commodity, Value
Declining