Today we're going to take a closer look at Small-Cap Basic Materials company 5N Plus, whose shares are currently trading at $2.9. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
5N Plus's Valuation Is in Line With Its Sector Averages:
5N Plus Inc. produces and sells specialty metals and chemicals in North America, Europe, and Asia. The company belongs to the Basic Materials sector, which has an average price to earnings (P/E) ratio of 10.03 and an average price to book (P/B) ratio of 2.08. In contrast, 5N Plus has a trailing 12 month P/E ratio of -16.1 and a P/B ratio of 2.07.
The Business Is Unprofitable and Its Balance Sheet Is Highly Leveraged:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (k) | $195,971 | $177,192 | $209,990 | $264,223 |
| Gross Margins | 17.7% | 20.5% | 18.5% | 18.4% |
| Operating Margins | 4.2% | 7.6% | 6.1% | -4.9% |
| Net Margins | 0.91% | 1.23% | 1.48% | -8.7% |
| Net Income (k) | $1,785 | $2,186 | $3,110 | -$22,999 |
| Net Interest Expense (k) | -$4,079 | -$3,490 | -$3,713 | -$5,192 |
| Depreciation & Amort. (k) | -$11,139 | -$11,725 | -$12,535 | -$17,732 |
| Earnings Per Share | $0.02 | $0.03 | $0.04 | -$0.18 |
| EPS Growth | n/a | 50.0% | 33.33% | -550.0% |
| Diluted Shares (k) | 83,959 | 82,468 | 82,787 | 88,455 |
| Free Cash Flow (k) | -$7,581 | $28,251 | $4,344 | $6,686 |
| Capital Expenditures | -$10,262 | -$8,554 | -$5,926 | -$17,055 |
| Net Current Assets (k) | $32,068 | $42,593 | -$41,821 | -$48,047 |
| Current Ratio | 3.91 | 4.13 | 3.01 | 2.98 |
| Long Term Debt (k) | $55,000 | $50,000 | $116,000 | $121,000 |
| Net Debt / EBITDA | 1.92 | 0.52 | 3.3 | 17.35 |
5N Plus suffers from slimmer gross margins than its peers, weak operating margins with a negative growth trend, and declining EPS growth. The firm's financial statements also exhibit an unconvincing cash flow history and a highly leveraged balance sheet. On the other hand, the company benefits from growing revenues and increasing reinvestment in the business and an excellent current ratio.
