I note a few comments on here about RMS current share price (the "too high - I'm out" camp vs the "too cheap" camp). As a starter, I am in the latter camp and thought it worth putting some maths around the topic of valuation.
As of the most recent announcement, RMS has $407m of cash and gold and delivered $125m generated cash for the quarter. I will ignore the generated cash for the moment and focus more on forecast annualisd EBITDA.
1. Current market cap is circa $2,200m - so deduct cash and enterprise is being valued at circa $1,800m.
2. Forecast FY24 EBITDA is around the $390m mark following the Q3 results. Current share price (net of cash) about 4.6x EBITDA. As of 30th June with a further $120m cash in bank, it is around 4.3x multiple.
3. Forecast FY25 is around the $580m mark. If we apply a 4.5x multiple, then implies a valuation of $2,610m + $520m cash = EV $3,130m or about $2.75 per share.
4. Peers are trading at around the 6x EBITDA multiple = valuation of $3,480m + cash = $4,000m or about $3.50/share (which is incidentally also my target based on technical analysis).
Note that the above FY25 forecast (source Ord Minnett) was when the gold price was circa US$2.100 vs the US$2,400 currently. Allowing for hedging, if current prices are maintained, there is a further $80m of EBITDA potential or (at 4.5x multiple) a further 30c+ per share upside.
For the above reasons, I think there is much more to play out in terms of RMS share price in the coming months.
At the moment Mr Market is just oscillating around the $2.00 mark which is normal as a stock approaches a "big" figure - often an initial break of the figure, a pullback below the figure, then a surge through the figure and then another pullback to test the figure before moving forward. We have had the first 2 components and I believe we are just now setting up to surge through the $2.00 barrier.
- Forums
- ASX - By Stock
- Ann: Record quarterly gold production for Ramelius
I note a few comments on here about RMS current share price (the...
- There are more pages in this discussion • 27 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add RMS (ASX) to my watchlist
(20min delay)
|
|||||
Last
$1.88 |
Change
0.003(0.13%) |
Mkt cap ! $2.174B |
Open | High | Low | Value | Volume |
$1.90 | $1.92 | $1.87 | $2.302M | 1.215M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
7 | 6138 | $1.88 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$1.88 | 32659 | 28 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
15 | 10646 | 1.870 |
21 | 38540 | 1.865 |
18 | 124833 | 1.860 |
10 | 18116 | 1.855 |
8 | 28576 | 1.850 |
Price($) | Vol. | No. |
---|---|---|
1.875 | 10018 | 10 |
1.880 | 40844 | 28 |
1.885 | 43498 | 21 |
1.890 | 50592 | 18 |
1.895 | 72800 | 12 |
Last trade - 11.55am 13/06/2024 (20 minute delay) ? |
|
|||||
Last
$1.88 |
  |
Change
0.003 ( 1.18 %) |
|||
Open | High | Low | Volume | ||
$1.90 | $1.92 | $1.87 | 551856 | ||
Last updated 12.15pm 13/06/2024 ? |
Featured News
RMS (ASX) Chart |
The Watchlist
RCE
RECCE PHARMACEUTICALS LTD
James Graham, CEO
James Graham
CEO
SPONSORED BY The Market Online