Gem Diamonds (GEMD) AI Stock Analysis

• Market Cap: £4.69M
• Dividend Yield: N/A
• Average Volume (3M): 986.38K
• Price to Earnings (P/E): 2.0
• Beta (1Y): 1.40
• Revenue Growth: -19.24%
• EPS Growth: -1347.92%
• Country: UK
• Employees: 716
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Other Precious Metals
• EPS (TTM): -0.07
• Shares Outstanding: 139,922,730
• 10 Day Avg. Volume: 1,938,892
• 30 Day Avg. Volume: 986,381
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £3.50
• Price Target Upside: 4.48% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 58 Neutral
• Price Target: 3.50p ▲(4.48% Upside)

Gem Diamonds' overall stock score reflects a mix of solid financial performance and significant market challenges. The company's strong cash flow management and operational improvements are positive, but bearish technical indicators and market uncertainties weigh heavily on the stock. The undervaluation based on P/E ratio offers some potential upside, but the lack of dividend yield and negative earnings call sentiment limit its appeal.

Gem Diamonds Business Overview & Revenue Model

Company Description

Gem Diamonds Limited (GEMD) is a leading global diamond mining and exploration company, primarily focused on the extraction and sales of high-value diamonds. The company operates the Letšeng mine in Lesotho, known for producing some of the world's largest and highest-quality diamonds. With a commitment to sustainable mining practices and ethical sourcing, Gem Diamonds also engages in the exploration of potential new mines, contributing to its portfolio in the diamond sector.

How the Company Makes Money

Gem Diamonds generates revenue primarily through the sale of rough diamonds extracted from its mining operations, particularly at the Letšeng mine, which is recognized for its exceptional diamond quality. The company often sells these diamonds through auctions, attracting high-end buyers, including jewelry manufacturers and luxury retailers. Additionally, Gem Diamonds may engage in partnerships with other mining companies or stakeholders to explore new mining opportunities and share resources, thereby enhancing its revenue potential. Fluctuations in diamond prices, market demand, and the company's ability to produce high-quality stones are significant factors influencing its earnings.

Gem Diamonds Financial Statement Overview

Summary

Gem Diamonds exhibits solid financial performance with improving revenue growth and profitability margins. The company shows strong operational efficiency and cash flow management, although revenue has yet to return to pre-2020 levels.

Income Statement

Gem Diamonds has shown a positive trend in revenue growth with a notable increase of 9.94% from 2023 to 2024. The gross profit margin improved to 27.76% in 2024, and the net profit margin turned positive at 1.88% from a loss in the previous year. The EBIT and EBITDA margins stand at 11.66% and 42.56%, respectively, indicating strong operational efficiency. However, the revenue has not yet returned to 2021 levels, suggesting room for further growth.

Balance Sheet

Gem Diamonds maintains a moderate debt-to-equity ratio of 0.18, reflecting prudent financial leverage. The return on equity (ROE) has improved to 2.03%, although it remains low, indicating limited profitability relative to equity. The equity ratio is at 40.83%, showcasing a stable financial structure with adequate equity to support assets. However, the decrease in cash and cash equivalents raises potential liquidity concerns.

Cash Flow

The company has demonstrated strong cash flow management, with free cash flow turning positive to 23.14 million in 2024 from negative in 2023. The free cash flow growth rate is significant, and the operating cash flow to net income ratio is robust at 17.69, indicating efficient cash generation relative to net income. Such performance highlights resilience in cash flow operations, despite past volatility.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	154.21M	140.29M	188.94M	201.86M	189.65M
Gross Profit	42.81M	31.18M	44.50M	58.35M	56.00M
EBITDA	65.63M	57.51M	38.56M	51.17M	53.60M
Net Income	2.89M	-2.13M	10.18M	14.77M	13.64M
Balance Sheet
Total Assets	349.10M	384.71M	366.24M	384.62M	414.20M
Cash, Cash Equivalents and Short-Term Investments	12.88M	16.50M	8.74M	30.93M	49.82M
Total Debt	25.79M	44.52M	13.84M	15.87M	22.82M
Total Liabilities	126.20M	166.59M	133.19M	137.97M	166.71M
Stockholders Equity	142.58M	138.87M	152.62M	159.81M	163.07M
Cash Flow
Free Cash Flow	23.14M	-22.13M	3.16M	2.60M	47.49M
Operating Cash Flow	51.20M	35.02M	63.03M	71.31M	96.23M
Investing Cash Flow	-27.64M	-57.15M	-59.67M	-68.69M	-48.72M
Financing Cash Flow	-26.73M	28.02M	-24.91M	-19.02M	-12.99M

Gem Diamonds Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:GEMD, the sentiment is Negative. The current price of 3.35 is below the 20-day moving average (MA) of 4.85, below the 50-day MA of 5.84, and below the 200-day MA of 8.20, indicating a bearish trend. The MACD of -0.90 indicates Positive momentum. The RSI at 31.89 is Neutral, neither overbought nor oversold. The STOCH value of 50.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:GEMD.

Gem Diamonds Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GEMD	58 Neutral	£4.69M	1.97	-8.98%	―	-19.24%	-1347.92%
BOD	46 Neutral	3.29M	―	0.00%	―	0.00%	0.00%
KDR	41 Neutral	1.23M	-3.91	0.00%	―	0.00%	33.33%
PDL	40 Neutral	36.90M	―	0.00%	―	0.00%	0.00%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%

Gem Diamonds Corporate Events

Gem Diamonds Announces Total Voting Rights Update

Gem Diamonds Limited announced that as of 30 July 2025, it has 141,442,898 Ordinary Shares issued, with 1,520,170 held in treasury, resulting in 139,922,728 total voting rights. This information is crucial for shareholders to determine their notification requirements under the FCA’s Disclosure Guidance and Transparency Rules.

Gem Diamonds Implements Strategic Measures Amid Market Challenges

Gem Diamonds has announced its H1 2025 trading update, highlighting significant operational and cost management measures in response to challenging market conditions. The company reported a decline in key performance metrics, including a 43% drop in total revenue compared to H1 2024, due to prolonged weakness in global diamond prices and adverse exchange rate movements. In response, Gem Diamonds has revised its 2025 guidance, reduced waste mining volumes, and implemented workforce rationalization, affecting approximately 20% of its workforce. The company remains committed to its long-term strategy and anticipates a strong recovery when market conditions improve.

Gem Diamonds Successfully Passes All AGM Resolutions

Gem Diamonds announced that all resolutions were passed at its Annual General Meeting held on 4 June 2025. The resolutions included receiving the 2024 Annual Report, approving the Directors’ Remuneration report, and re-electing several board members, among other decisions. The successful passing of these resolutions reflects strong shareholder support and positions the company for continued stability and governance in the diamond industry.

Gem Diamonds Announces Total Voting Rights Update

Gem Diamonds Limited has announced its total voting rights as of May 31, 2025, confirming 141,416,648 Ordinary Shares in issue, with 1,520,170 held in treasury, resulting in 139,896,478 voting rights. This information is crucial for shareholders to determine their notification requirements under the FCA’s Disclosure Guidance and Transparency Rules.