TMC the metals (TMC) has been back in focus after US regulators confirmed its deep sea mining application is fully compliant, while a new Allseas agreement mapped out the first commercial nodule collection system.
See our latest analysis for TMC the metals.
The latest regulatory green light and Allseas agreement have come after a period where the share price has risen 14.31% over the past month yet is still down 11.65% year to date. At the same time, the 1 year total shareholder return of 46.81% and very large 3 year total shareholder return around 7x suggest longer term momentum has been much stronger than the recent pullback.
If this kind of mining story has your attention, it can be useful to see what else is moving in related materials and resource themes via the 28 best rare earth metal stocks.
So, with TMC still lossmaking, a value score of 1, a recent rally, and analyst targets sitting well above the last close at US$5.99, is the stock on sale, or is the market already pricing in future growth?
Most Popular Narrative: 46.5% Undervalued
With the most followed narrative pointing to a fair value of $11.20 against a last close of $5.99, the gap to bridge is all about future cash generation, permitting and project scale.
The pre feasibility study and initial assessment outline a large resource with an estimated combined NPV of US$23.6b, targeted steady state revenue of about US$600 per dry ton and an EBITDA margin per ton of roughly 43%. If the company moves closer to these project economics while remaining in the first quartile of the cost curve, that cost position could support resilient margins and long term EBITDA and earnings power.
Want to see what sits behind that valuation gap? This narrative leans heavily on rapid revenue build out, healthier margins and a rich profit multiple on future earnings.
Result: Fair Value of $11.20 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this hinges on securing a NOAA Commercial Recovery Permit and managing ongoing cash burn, where funding shortfalls or tighter permit conditions could quickly change the story.
Find out about the key risks to this TMC the metals narrative.
Next Steps
With mixed sentiment around both the upside potential and the risks, it makes sense to move quickly and weigh the evidence for yourself using the 2 key rewards and 6 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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