WA1 Resources Ltd engages in the mineral exploration business in Western Australia. It explores for iron oxide, copper, and gold deposits. The company's flagship project is the 100% owned West Arunta project comprising three granted exploration tenements covering an area of approximately 267 square kilometers located in the West Arunta Orogen. WA1 Resources Ltd was incorporated in 2021 and is based in Nedlands, Australia.

Australia

WA1 Resources 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. 

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 3ppts over six months and grown 3ppts 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.

In the last 12 months, the return on capital employed (RoCE) grew to 0.0%, below the peers. 

WA1 Resources Ltd reported a return on equity (RoE) of 0.0% in the last 12 months, up from -4.3% in FY24. The market consensus projects an RoE of -5.7% in FY25, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to 0.0% in the last 12 months, an increase from -4.2% in FY24. The market analysts predict that RoA will be -5.7% in FY25, again weaker than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.2 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.

WA1.AX has below average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually 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. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is very high. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, bleak profitability, negligible return on capital, poor working capital management, weak debt servicing capacity, and inadequate interest coverage.

In highly turbulent market conditions, WA1.AX is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, WA1.AX is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

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

WA1 Resources Ltd

A$ 11.88

1

WA1 Resources Ltd

A$ 11.88

1

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

A$ 11.88

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