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Foraco International
(TSX:FAR)
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Rating:55Neutral
Price Target:
C$2.50
▼(-10.07% Downside)
Action:Reiterated
Date:10/29/26
The score is held back mainly by weakened cash generation (negative free cash flow and working-capital absorption) and bearish technical signals (below major moving averages with negative MACD). These are partially offset by a reasonable earnings valuation (P/E ~14) and a constructive earnings-call backdrop focused on strong demand, rising utilization, and planned deleveraging, albeit with ongoing margin pressure and limited formal guidance.
Positive Factors
Strong Revenue Growth
Sustained revenue growth across consecutive quarters indicates strengthening demand for Foraco’s drilling services rather than a single project benefit. Continued expansion supports better fleet economics, increases operating scale, and can improve earnings power if pricing and execution recover.
Negative Factors
Margin Compression
Revenue growth is not yet translating proportionally into profitability, as gross and EBITDA margins remain below the prior year. Persistent pricing, productivity, or contract-execution pressure could limit earnings conversion and weaken the benefits of higher utilization over the coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Revenue Growth
Sustained revenue growth across consecutive quarters indicates strengthening demand for Foraco’s drilling services rather than a single project benefit. Continued expansion supports better fleet economics, increases operating scale, and can improve earnings power if pricing and execution recover.
Read all positive factors
Foraco International (FAR) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$244.63M
Dividend Yield1.9%
Average Volume (3M)59.34K
Price to Earnings (P/E)14.1
Beta (1Y)1.84
Revenue Growth7.69%
EPS Growth-34.65%
CountryCA
Employees2,139
SectorBasic Materials
Sector Strength58
IndustryEngineering & Construction
Share Statistics
EPS (TTM)0.13
Shares Outstanding97,851,600
10 Day Avg. Volume63,972
30 Day Avg. Volume59,338
Financial Highlights & Ratios
PEG Ratio-0.25
Price to Book (P/B)1.75
Price to Sales (P/S)0.66
P/FCF Ratio106.16
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.15
Revenue Forecast (FY)C$310.23M
Foraco International Business Overview & Revenue Model
Company Description
Foraco International SA is a global mineral drilling services company. It operates through the Mining and Water segments. The Mining segment deals in drilling services offered to the mining and energy industry during the exploration, development, ...
How the Company Makes Money
Foraco makes money by contracting with mining and resource companies to provide drilling services on a fee-for-service basis. Its core revenue stream comes from executing drilling programs—typically billed using contract structures tied to measura...
Foraco International Earnings Call Summary
Earnings Call Date:Oct 28, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Mar 04, 2027
Earnings Call Sentiment Positive
The call was broadly positive, supported by three consecutive quarters of revenue growth above 20%, strong market demand, higher utilization, regional growth in the Americas and EMEA, a substantial backlog and continued debt reduction. However, profitability metrics remain below the prior year, Asia Pacific revenue declined, Mining profitability faced consumable-cost and productivity challenges, and working capital continues to absorb cash. Management's tone was confident about demand and future activity but focused on restoring margins, improving cash conversion and reducing leverage.Positive Updates
Strong Third-Quarter Revenue Growth
Revenue reached $86.2 million, up 21.4% from $71 million in Q3 2025. This marked the third consecutive quarter of year-on-year revenue growth exceeding 20%.
Negative Updates
Third-Quarter EBITDA Margin Declined
Although EBITDA increased 8.1% to $15.4 million, EBITDA margin declined to 17.8% from 20% in the prior-year quarter because revenue grew faster than EBITDA. Management identified improving the conversion of higher activity into stronger margins as an important priority.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Third-Quarter Revenue Growth
Revenue reached $86.2 million, up 21.4% from $71 million in Q3 2025. This marked the third consecutive quarter of year-on-year revenue growth exceeding 20%.
Read all positive updates
Company Guidance
Management is not able to provide specific guidance on margin target for Q4 2026 or into 2027, but expects pricing adjustments to progressively take effect and operational performance to improve; a 60% utilization rate is “certainly achievable from an operating capacity standpoint,” though it is not formal guidance. Management expects opportunities to further increase utilization in 2027, some normalization of working capital as contracts progress and outstanding receivables are collected, and further reduction of the leverage ratio following the completion of the major investment program, although it cannot give guidance on exactly where it will land; capital expenditures for 2026 are “all but complete.”Foraco International Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
62
Positive
Cash Flow
44
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 284.97M | 262.71M | 293.45M | 370.09M | 330.56M | 269.69M |
| Gross Profit | 42.81M | 44.58M | 63.06M | 93.86M | 71.27M | 46.82M |
| EBITDA | 46.38M | 45.22M | 59.91M | 86.30M | 67.08M | 77.63M |
| Net Income | 12.39M | 15.84M | 27.81M | 28.71M | 19.76M | 35.49M |
Balance Sheet | ||||||
| Total Assets | 278.14M | 252.46M | 226.02M | 279.73M | 249.54M | 228.79M |
| Cash, Cash Equivalents and Short-Term Investments | 17.29M | 27.25M | 24.36M | 34.29M | 29.41M | 23.92M |
| Total Debt | 102.97M | 98.18M | 85.31M | 99.49M | 105.57M | 109.66M |
| Total Liabilities | 171.44M | 148.83M | 142.71M | 181.67M | 174.05M | 166.26M |
| Stockholders Equity | 101.98M | 98.60M | 77.50M | 85.92M | 65.19M | 55.98M |
Cash Flow | ||||||
| Free Cash Flow | -4.16M | 1.62M | 10.36M | 29.08M | 17.39M | 10.43M |
| Operating Cash Flow | 25.76M | 24.76M | 29.23M | 55.22M | 37.43M | 29.02M |
| Investing Cash Flow | -29.92M | -23.14M | -18.87M | -26.14M | -20.04M | -18.59M |
| Financing Cash Flow | 1.05M | 324.58K | -18.75M | -23.94M | -10.68M | -7.80M |
Foraco International Technical Analysis
Negative
2.78
Price Trends
2.68
Negative
2.67
Negative
2.80
Negative
Market Momentum
-0.07
Positive
42.79
Neutral
34.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FAR, the sentiment is Negative. The current price of 2.78 is above the 20-day moving average (MA) of 2.51, above the 50-day MA of 2.68, and below the 200-day MA of 2.80, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 42.79 is Neutral, neither overbought nor oversold. The STOCH value of 34.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:FAR.
Foraco International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
55 Neutral | C$244.63M | 14.14 | 12.49% | 1.90% | 7.69% | -34.65% | |
54 Neutral | C$133.04M | -7.38 | -10.61% | 2.25% | 12.59% | -194.85% | |
48 Neutral | C$200.79M | 48.56 | 7.81% | ― | 108.81% | ― | |
47 Neutral | C$43.61M | -29.01 | -2.18% | ― | 7.49% | -119.48% | |
43 Neutral | C$343.72M | -46.95 | -19.18% | ― | ― | -240.00% | |
41 Neutral | C$269.15M | -8.87 | -11.46% | ― | ― | -29.28% |
* Basic Materials Sector Average
TSE:FAR
Foraco International
2.50
0.40
19.05%
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Foraco International Corporate Events
Business Operations and StrategyFinancial Disclosures
Foraco lifts revenue on higher rig utilization but margins remain under pressure
Neutral
Oct 28, 2026
Foraco International reported third-quarter 2026 revenue of US$86.2 million, a 21.4% year-on-year increase, as higher rig utilization lifted activity across most regions, led by North America. The company also saw year-to-date revenue climb 21.5% ...
Business Operations and StrategyFinancial Disclosures
Foraco to Release Q3 2026 Results and Host Investor Call
Neutral
Oct 21, 2026
Foraco International SA will publish its third-quarter 2026 financial results before the Toronto Stock Exchange opens on Wednesday, October 28, 2026. Management, led by chief executive Tim Bremner and chief financial officer Fabien Sevestre, will ...
Business Operations and StrategyStock Buyback
Foraco Launches New Share Buyback Program on TSX
Positive
Sep 24, 2026
Foraco International SA has received Toronto Stock Exchange approval to launch a normal course issuer bid allowing the repurchase of up to 1,000,000 common shares, or about 1% of its outstanding stock, between September 28, 2026 and September 27, ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.