Turquoise Hill Resources Ltd (TRQ.CA) Stock Fundamental Analysis
Canada • Toronto Stock Exchange • TSX:TRQ • CA9004352071
42.99 CAD
-0.02 (-0.05%)
Last: Dec 19, 2022, 07:00 PM
We assign a fundamental rating of 4 out of 10 to TRQ. TRQ was compared to 820 industry peers in the Metals & Mining industry. While TRQ is still in line with the averages on profitability rating, there are concerns on its financial health. TRQ is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
- In the past year TRQ was profitable.
- TRQ had a positive operating cash flow in the past year.
1.2 Ratios
- TRQ has a better Return On Assets (3.80%) than 88.24% of its industry peers.
- TRQ has a better Return On Equity (6.12%) than 89.68% of its industry peers.
- TRQ has a better Return On Invested Capital (2.66%) than 90.68% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for TRQ is significantly below the industry average of 12.04%.
- The last Return On Invested Capital (2.66%) for TRQ is above the 3 year average (2.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.8% | ||
| ROE | 6.12% | ||
| ROIC | 2.66% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)2.58%
ROIC(5y)N/A
1.3 Margins
- TRQ's Profit Margin of 32.99% is amongst the best of the industry. TRQ outperforms 98.11% of its industry peers.
- In the last couple of years the Profit Margin of TRQ has grown nicely.
- The Operating Margin of TRQ (30.81%) is better than 96.89% of its industry peers.
- TRQ's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.81% | ||
| PM (TTM) | 32.99% | ||
| GM | N/A |
OM growth 3Y54.65%
OM growth 5Y93.75%
PM growth 3Y-8.57%
PM growth 5Y8.76%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), TRQ is destroying value.
- The number of shares outstanding for TRQ remains at a similar level compared to 1 year ago.
- The debt/assets ratio for TRQ has been reduced compared to a year ago.
2.2 Solvency
- TRQ has an Altman-Z score of 0.49. This is a bad value and indicates that TRQ is not financially healthy and even has some risk of bankruptcy.
- The Altman-Z score of TRQ (0.49) is comparable to the rest of the industry.
- TRQ has a Debt/Equity ratio of 0.37. This is a healthy value indicating a solid balance between debt and equity.
- TRQ's Debt to Equity ratio of 0.37 is on the low side compared to the rest of the industry. TRQ is outperformed by 78.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.49 |
ROIC/WACC0.27
WACC9.68%
2.3 Liquidity
- A Current Ratio of 0.42 indicates that TRQ may have some problems paying its short term obligations.
- TRQ has a Current ratio of 0.42. This is in the lower half of the industry: TRQ underperforms 77.36% of its industry peers.
- A Quick Ratio of 0.24 indicates that TRQ may have some problems paying its short term obligations.
- The Quick ratio of TRQ (0.24) is worse than 82.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.42 | ||
| Quick Ratio | 0.24 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 6.49% over the past year.
- Measured over the past years, TRQ shows a very strong growth in Earnings Per Share. The EPS has been growing by 21.15% on average per year.
- The Revenue for TRQ has decreased by -11.63% in the past year. This is quite bad
- TRQ shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.37% yearly.
EPS 1Y (TTM)6.49%
EPS 3Y7.52%
EPS 5Y21.15%
EPS Q2Q%35.29%
Revenue 1Y (TTM)-11.63%
Revenue growth 3Y18.65%
Revenue growth 5Y10.37%
Sales Q2Q%-40.94%
3.2 Future
- TRQ is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 37.99% yearly.
- The Revenue is expected to grow by 20.56% on average over the next years. This is a very strong growth
EPS Next Y-22.59%
EPS Next 2Y-40.66%
EPS Next 3Y7.83%
EPS Next 5Y37.99%
Revenue Next Year-25.18%
Revenue Next 2Y-22.26%
Revenue Next 3Y3.52%
Revenue Next 5Y20.56%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 11.37, the valuation of TRQ can be described as reasonable.
- Based on the Price/Earnings ratio, TRQ is valued cheaply inside the industry as 92.23% of the companies are valued more expensively.
- TRQ is valuated cheaply when we compare the Price/Earnings ratio to 28.32, which is the current average of the S&P500 Index.
- TRQ is valuated quite expensively with a Price/Forward Earnings ratio of 34.55.
- 87.90% of the companies in the same industry are more expensive than TRQ, based on the Price/Forward Earnings ratio.
- TRQ is valuated rather expensively when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.37 | ||
| Fwd PE | 34.55 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, TRQ is valued cheaper than 89.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 14.78 |
4.3 Compensation for Growth
- TRQ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.54
EPS Next 2Y-40.66%
EPS Next 3Y7.83%
5. Dividend
5.1 Amount
- No dividends for TRQ!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Turquoise Hill Resources Ltd / TRQ.CA FAQ
What is the fundamental rating for TRQ stock?
ChartMill assigns a fundamental rating of 3 / 10 to TRQ.CA.
Can you provide the valuation status for Turquoise Hill Resources Ltd?
ChartMill assigns a valuation rating of 6 / 10 to Turquoise Hill Resources Ltd (TRQ.CA). This can be considered as Fairly Valued.
Can you provide the profitability details for Turquoise Hill Resources Ltd?
Turquoise Hill Resources Ltd (TRQ.CA) has a profitability rating of 2 / 10.
What is the financial health of Turquoise Hill Resources Ltd (TRQ.CA) stock?
The financial health rating of Turquoise Hill Resources Ltd (TRQ.CA) is 0 / 10.
What is the expected EPS growth for Turquoise Hill Resources Ltd (TRQ.CA) stock?
The Earnings per Share (EPS) of Turquoise Hill Resources Ltd (TRQ.CA) is expected to decline by -22.59% in the next year.