A strong performer from today's evening trading session is Cameco, whose shares rose 2.2% to $52.4 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Cameco's Valuation Is in Line With Its Sector Averages:
Cameco Corporation provides uranium for the generation of electricity. The company belongs to the Basic Materials sector, which has an average price to earnings (P/E) ratio of 22.71 and an average price to book (P/B) ratio of 3.12. In contrast, Cameco has a trailing 12 month P/E ratio of 134.4 and a P/B ratio of 3.72.
Cameco's PEG ratio is 2.18, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
Good EPS Growth and Similar Gross Margins to the Industry Average of 20.5%:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $2,092 | $1,863 | $1,800 | $1,475 | $1,868 | $2,588 |
| Gross Margins | 14% | 13% | 6% | 0% | 12% | 22% |
| Net Margins | 8% | 4% | -3% | -7% | 5% | 14% |
| Net Income (M) | $166 | $74 | -$53 | -$103 | $89 | $361 |
| Net Interest Expense (M) | $72 | $62 | $66 | $39 | $39 | $51 |
| Depreciation & Amort. (M) | $328 | $276 | $209 | $190 | $177 | $220 |
| Earnings Per Share | $0.42 | $0.19 | -$0.13 | -$0.26 | $0.22 | $0.83 |
| EPS Growth | n/a | -54.76% | -168.42% | -100.0% | 184.62% | 277.27% |
| Avg. Price | $10.33 | $10.15 | $9.82 | $19.27 | $24.15 | $52.4 |
| P/E Ratio | 24.6 | 53.42 | -75.54 | -74.12 | 109.77 | 63.13 |
| Free Cash Flow (M) | $668 | $527 | $57 | $458 | $305 | $688 |
| Total Debt (M) | $996 | $997 | $996 | $996 | $997 | $1,284 |
| Net Debt / EBITDA | 0.71 | -0.18 | 0.59 | -4.63 | -0.76 | 1.43 |
| Current Ratio | 2.38 | 6.51 | 6.4 | 5.18 | 5.92 | 1.55 |
Cameco has a strong EPS growth trend and generally positive cash flows. Additionally, the company's financial statements display a decent current ratio of 1.55 and healthy leverage levels. Furthermore, Cameco has similar gross margins to its peers.
