NexGen Energy Ltd., an exploration and development stage company, engages in the acquisition, exploration, and evaluation and development of uranium properties in Canada. Its principal asset is the Rook I project comprising 32 contiguous mineral claims totaling an area of 35,065 hectares located in the southwestern Athabasca Basin of Saskatchewan. The company is headquartered in Vancouver, Canada.

Canada

NexGen Energy Ltd.

Basic Materials

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. 

NXE reported revenue of CAD 0mn in the last 12 months, down 0% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 21% from FY24 to CAD -0.15. Market expects EPS to reach CAD -0.19 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 15ppts over six months and grown 17ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

NexGen Energy Ltd. reported a return on equity (RoE) of -12.3% in the last 12 months, up from -15.1% in FY22. The market consensus projects an RoE of -24.0% in FY23, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to -8.8% in the last 12 months, an increase from -11.7% in FY22. The market analysts predict that RoA will be -18.1% in FY23, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to -11.4%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -1.4 in the past several years. This ratio implies a fragile 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.

NXE boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually very stable and remains favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, and inadequate interest coverage. We note an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, NXE is moderately volatile. In other words, the stock will fall more 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 moderate. 

In normal market circumstances, NXE is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from significant to immense. 

From both historical and forecast perspectives, the stock is considerably overpriced compared to similar stocks. 

NexGen Energy Ltd.

$ 6.34

2

NexGen Energy Ltd.

$ 6.34

2

Risk factor

Profitability factor

Risk / Profitability

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About

Risk factor

Profitability factor

$ 6.34

About

About

NexGen Energy Ltd.

$ 6.34

2

NexGen Energy Ltd.

$ 6.34

2

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 6.34

About

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