The average target price of LMN.V is 47 and suggests 2% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 54.0. This translates into 13% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 45.0. This is equivalent to 6% downside potential in the worst case. 

Lumine Group Inc. offers communications and media software worldwide. The company was founded in 2022 and is headquartered in Mississauga, Canada.

Canada

Lumine Group Inc.

Technology

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

LMN.V reported revenue of USD 706mn in the last 12 months, up 6% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. Market expects EPS to reach USD 0.51 in FY25.

Over the past six months, the stock has consistently climbed, resulting in 21% total increase. When compared to its international counterparts in the same sector and industry (as shown above), the stock has exceeded their performances, leading by 25ppts in total. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 32.8% in the last 12 months, up from -543.8% in FY23. 

Historically, LMN.V has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 9.4%, a growth from -565.6% in FY23. 

Lumine Group Inc. reported a return on equity (RoE) of -4.2% in the last 12 months, down from 153.2% in FY23. The market consensus projects an RoE of 97.5% in FY24, this time above its peers. 

Another important profitability metric, return on assets (RoA), amounted to 5.4% in the last 12 months, an increase from -366.9% in FY23. The market analysts predict that RoA will be -326.6% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -5.4%, below the peers. The consensus estimate for FY24 for RoCE is 105.2%, however, this time ahead of the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 4.2 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

LMN.V has average trading liquidity. The average private investor can sell his common position in the stock in a single trading day. Liquidity is relatively stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to bleak profitability, negligible return on capital, poor working capital management, and inadequate interest coverage. We note resilient historical revenue growth, low margin volatility, solid cash flow generation, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, LMN.V is not volatile. In other words, the stock will fall far less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be very low. 

In normal market circumstances, LMN.V is not overly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will remain relatively stable. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to mild. We would also like to highlight the mild intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is considerably overpriced compared to similar stocks. Specifically, the stock is 'expensive' on P/E, overvalued on EV/EBITDA, overpriced on P/FCF. 

Lumine Group Inc.

CA$ 46.57

4

Lumine Group Inc.

CA$ 46.57

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CA$ 46.57

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