Friday, H.C. Wainwright adjusted its price target on shares of Largo Resources Ltd. (NASDAQ:LGO) to $4.80, up from the previous $4.70, while maintaining a Buy rating on the stock. The firm's decision follows Largo Resources' announcement of its first-quarter financial results for 2024 on May 15, 2024.
Largo Resources reported revenue of $42.2 million for the quarter, which resulted in a net loss of $13.0 million, or $0.20 per share. These figures represent a significant decline from the first quarter of 2023, where the company had posted revenue of $57.4 million and a net loss of $1.2 million, or $0.02 per share.
The year-over-year decrease in revenue of 27% was primarily due to a substantial drop in the average vanadium price, which fell to $6.91 per pound, marking a 24% decrease compared to the same period last year.
The company's net loss was further impacted by an increase in operating costs, which rose to $49.7 million, an 8% increase from the previous year. This was partly due to a scheduled plant shutdown in the first quarter of 2024, which led to lower global recoveries and increased operational expenditures.
InvestingPro Insights
Amidst the financial performance of Largo Resources Ltd. (NASDAQ:LGO), the market reflects a cautious stance, with a Market Cap of $107.2 million and a Price to Book ratio of 0.43 as of the last twelve months ending Q4 2023. This indicates that the stock is trading below its book value, which can be a sign of undervaluation. Despite the company's revenue decline of 13.33% over the last twelve months, an InvestingPro Tip notes that Largo's liquid assets exceed its short-term obligations, suggesting a degree of financial flexibility in the near term.
However, investors should be aware of the company's volatility, as Largo's stock price movements have been quite erratic, with a significant fall of 58.35% over the last year, but also a strong return of 15.97% over the last month. This aligns with another InvestingPro Tip highlighting the company's quick cash burn and the analysts' expectations of non-profitability for this year. For those considering an investment in Largo Resources, additional insights are available, with a total of 10 InvestingPro Tips found on the company's profile at https://www.investing.com/pro/LGO. To access these valuable insights, users can apply the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
On the horizon, the next earnings date is set for May 16, 2024, which could provide further clarity on the company's trajectory. With an InvestingPro Fair Value estimate of $2.17, compared to the analyst targets of $4.7, investors should weigh these figures carefully against the broader market context and their investment strategy.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.