skip to content
  1. Home
  2. >
  3. Questions
  4. >
  5. IE: What are your current thoughts on these 2 materials plays ? [Ivanhoe Electric Inc.]
You can view 2 more answers this month. Sign up for a free trial for unlimited access.

Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: What are your current thoughts on these 2 materials plays ? How were recent financials and outlooks for each ? Thank you.

Asked by Paul on November 22, 2022
5i Research Answer:

MP has been growing strongly over the last few years since its IPO in 2020. It is profitable, has strong free cash flows, and a reasonable debt balance. Its cash position is solid at $1.3B. The company reported EPS of $0.36 beating estimates of $0.292 and revenues of $124.45M beating estimates of $115.64M. Sales grew 25% year-over-year and net income increased by 48%, demonstrating solid margin expansion. The company did not release specific guidance but it is in a strong financial position, although the one concern that we have is its relatively high valuation (12.6X forward sales and 32.5X forward P/E).

IE announced after over five years of property acquisition, it is beginning its exploration drill program at its Tintic Copper-Gold project in Utah. Its balance sheet grew substantially for the quarter, with a cash balance of $177.7M, and an equity position of $243.5M. Sales increased by 13%, and its net loss widened from $20.1M in the previous year to $43.9M. It is issuing shares and debt to fund its operations, and we feel a lot of this company's valuation will depend on the results of its future drilling programs. 

Overall, we would prefer to own MP today due to its larger size, better balance sheet and sales growth, and strong profit margins.