The Chemours Co (CC, Financial) experienced a daily loss of -3.97% and a 3-month loss of -14.56%, with a Loss Per Share of 0.62. With these figures, is the stock modestly undervalued? This article provides a comprehensive valuation analysis of The Chemours Co, aiming to answer this question. We encourage you to delve into the following analysis.
Company Introduction
The Chemours Co is a global provider of chemicals, delivering customized solutions with a variety of industrial and specialty chemicals products. Its operating segments include Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials, with the Titanium Technologies segment generating maximum revenue. The company's stock price currently stands at $28.56, with a market cap of $4.20 billion. When compared to the GF Value of $35.08, an estimation of fair value, The Chemours Co appears to be modestly undervalued.
Understanding GF Value
The GF Value is the estimated intrinsic value of a stock, calculated based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. If the stock price is significantly above the GF Value Line, it is overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher. The Chemours Co's stock appears to be modestly undervalued, suggesting that the long-term return of its stock is likely to be higher than its business growth.
Financial Strength
Companies with poor financial strength pose a high risk of permanent capital loss to investors. Evaluating a company's financial strength involves reviewing its cash-to-debt ratio and interest coverage. The Chemours Co has a cash-to-debt ratio of 0.19, ranking worse than 80.19% of 1504 companies in the Chemicals industry. Its overall financial strength is 4 out of 10, indicating poor financial strength.
Profitability and Growth
Consistent profitability over the long term reduces risk for investors. The Chemours Co has been profitable 8 over the past 10 years, with a revenue of $6.30 billion and an operating margin of 1.14% over the past twelve months. This margin ranks worse than 74.21% of 1524 companies in the Chemicals industry. Overall, the profitability of The Chemours Co is ranked 7 out of 10, indicating fair profitability.
Growth is a crucial factor in a company's valuation. The Chemours Co's 3-year average revenue growth rate is worse than 53.21% of 1447 companies in the Chemicals industry. However, its 3-year average EBITDA growth rate of 46.6% ranks better than 88.65% of 1339 companies in the Chemicals industry, indicating strong growth.
ROIC vs WACC
Comparing a company's return on invested capital (ROIC) to its weighted average cost of capital (WACC) can also evaluate its profitability. The Chemours Co's ROIC of 4.11 is lower than its WACC of 9.32 during the past 12 months, indicating a potential challenge in creating value for its shareholders.
Conclusion
In summary, the stock of The Chemours Co appears to be modestly undervalued. Its financial condition is poor, and its profitability is fair. However, its growth ranks better than 88.65% of 1339 companies in the Chemicals industry. For more details about The Chemours Co's stock, check out its 30-Year Financials here.
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