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.
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Last
$2.09 |
Change
0.000(0.00%) |
Mkt cap ! $2.393B |
Open | High | Low | Value | Volume |
$2.04 | $2.09 | $2.04 | $5.465M | 2.643M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 10000 | $2.08 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$2.09 | 90183 | 6 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 10000 | 2.080 |
1 | 3900 | 2.050 |
3 | 25176 | 2.030 |
3 | 24635 | 2.020 |
2 | 14681 | 2.010 |
Price($) | Vol. | No. |
---|---|---|
2.090 | 61367 | 4 |
2.100 | 36412 | 2 |
2.110 | 7443 | 1 |
2.120 | 7443 | 1 |
2.130 | 7443 | 1 |
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