Lucara Diamond (LUC) AI Stock Analysis

• Market Cap: C$104.18M
• Dividend Yield: N/A
• Average Volume (3M): 82.34K
• Price to Earnings (P/E): 1.6
• Beta (1Y): -0.16
• Revenue Growth: 14.23%
• EPS Growth: N/A
• Country: CA
• Employees: 324
• Sector: Basic Materials
• Sector Strength: 69
• Industry: Other Precious Metals
• EPS (TTM): 0.00
• Shares Outstanding: 452,935,270
• 10 Day Avg. Volume: 55,795
• 30 Day Avg. Volume: 82,336
• PEG Ratio: 0.09
• Price to Book (P/B): 0.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.16
• Enterprise Value/Market Cap: 2.51
• Enterprise Value/Revenue: 0.35
• Enterprise Value/Gross Profit: 3.23
• Enterprise Value/Ebitda: 1.17
• 1Y Price Target: C$0.40
• Price Target Upside: 81.82% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 62 Neutral
• Price Target: C$0.00 ▼(-100.00%Downside)

Lucara Diamond's overall score reflects solid valuation but is weighed down by weak technical indicators and financial challenges, particularly in cash flow and debt management. Recent corporate events add both positive and negative elements, with governance improvements but also revenue and liquidity issues.

Positive Factors

Market Position

Lucara remains a premium diamond producer amongst its peers with a unique diamond production mix from Karowe, known for its large and high-value diamonds.

Negative Factors

Financial Guidance

The company has negatively revised its 2025 guidance for production, sales, and revenue.

Financial Strategy

Lucara is exploring options to raise additional debt or equity financing, as it believes its working capital is insufficient to fund the Karowe underground project.

Production Challenges

Lucara has announced its Q1/25 results with lower-than-expected production from its Karowe mine due to higher-than-expected precipitation and migrating geological boundaries.

Lucara Diamond Business Overview & Revenue Model

Company Description

Lucara Diamond Corp., a diamond mining company, focuses on the development and operation of diamond properties in Africa. The company holds 100% interests in the Karowe mine located in Botswana. It also operates Clara Platform, a digital platform for the sale of rough diamonds. The company was formerly known as Bannockburn Resources Limited and changed its name to Lucara Diamond Corp. in August 2007. Lucara Diamond Corp. was incorporated in 1981 and is based in Vancouver, Canada.

How the Company Makes Money

Lucara Diamond Corp. generates revenue primarily through the sale of rough diamonds extracted from its Karowe Mine. The company's revenue model is centered around the mining, recovery, and sale of diamonds, particularly large, high-value stones that command premium prices. Lucara leverages its proprietary digital sales platform, Clara Diamond Solutions, which enhances the sales process by matching diamond supply to specific customer demand, thereby optimizing prices. The company also engages in partnerships with luxury brands and participates in select auctions and tenders to maximize the value of its diamond inventory. Additionally, strategic partnerships and joint ventures, such as those with technology providers for diamond recovery and exploration, contribute to operational efficiencies and cost management, further impacting its profitability.

Lucara Diamond Financial Statement Overview

Summary

Lucara Diamond's financial performance shows solid profitability with a strong gross profit margin and improved net profit margin. However, inconsistent revenue growth and increasing debt levels are concerning. Cash flow challenges are significant, as indicated by negative free cash flow, despite strong operating cash flow conversion.

Income Statement

Lucara Diamond has demonstrated consistent revenue performance with its TTM (Trailing-Twelve-Months) revenue at $194.67 million, showing resilience despite fluctuations. The gross profit margin is solid, reflecting strong cost control. The net profit margin improved significantly, indicating enhanced profitability. However, revenue growth has been inconsistent, with a notable decline in the latest TTM period compared to previous years.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio, indicating manageable leverage. The return on equity is improving, suggesting better utilization of equity to generate profits. The equity ratio has remained stable, reflecting a balanced capital structure. However, the increasing debt levels over time may pose future risks if not managed carefully.

Cash Flow

Lucara Diamond's cash flow statement reveals fluctuating free cash flow, with the latest TTM period showing a negative free cash flow. The operating cash flow to net income ratio is strong, indicating good cash conversion, but the free cash flow to net income ratio is negative, highlighting potential cash flow challenges. Despite consistent operating cash flow, high capital expenditures remain a concern.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	203.88M	172.40M	212.93M	230.08M	125.26M
Gross Profit	84.45M	62.35M	84.60M	75.14M	-7.73M
EBITDA	66.61M	53.50M	87.18M	100.29M	18.97M
Net Income	39.90M	-20.19M	40.43M	23.83M	-26.28M
Balance Sheet
Total Assets	660.83M	575.80M	495.84M	411.95M	333.85M
Cash, Cash Equivalents and Short-Term Investments	22.79M	13.34M	26.42M	27.01M	4.92M
Total Debt	195.83M	137.99M	78.60M	48.90M	32.27M
Total Liabilities	389.10M	333.67M	225.78M	162.98M	125.66M
Stockholders Equity	271.73M	242.13M	270.06M	248.97M	208.19M
Cash Flow
Free Cash Flow	-38.71M	-52.33M	77.15M	68.10M	-35.48M
Operating Cash Flow	56.30M	63.36M	96.23M	83.39M	-1.53M
Investing Cash Flow	-94.35M	-115.79M	-125.42M	-97.54M	-33.95M
Financing Cash Flow	47.76M	39.66M	29.14M	36.80M	29.37M

Lucara Diamond Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.22
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LUC, the sentiment is Negative. The current price of 0.22 is below the 20-day moving average (MA) of 0.23, below the 50-day MA of 0.25, and below the 200-day MA of 0.39, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 41.35 is Neutral, neither overbought nor oversold. The STOCH value of 55.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:LUC.

Lucara Diamond Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	62 Neutral	$10.32B	9.99	0.09%	2.85%	2.25%	-33.42%
LUC	62 Neutral	C$104.18M	1.57	19.74%	―	14.23%	―
MPVDF	―	$8.52M	―	-39.12%	―	―	―
DMIFF	―	$1.23M	―		―	―	―
TAI	50 Neutral	C$2.56M	―	-1087.65%	―	―	-17.78%

Lucara Diamond Corporate Events

Lucara Diamond Corp. Announces Key Resolutions from Annual Meeting

Lucara Diamond Corp. announced the results of its Annual General and Special Meeting of shareholders, where key resolutions were passed, including the election of board members and amendments to various share plans. The re-appointment of PricewaterhouseCoopers LLP as auditors and approval of executive compensation were also confirmed. These decisions reflect the company’s strategic focus on enhancing its governance and operational frameworks, potentially impacting its market positioning and stakeholder relations positively.

The most recent analyst rating on (TSE:LUC) stock is a Hold with a C$0.50 price target. To see the full list of analyst forecasts on Lucara Diamond stock, see the TSE:LUC Stock Forecast page.

Lucara Diamond Reports Q1 2025 Revenue Decline Amid Operational Adjustments

Lucara Diamond Corp. reported a decrease in revenue for Q1 2025 to $30.3 million, down from $39.5 million in Q1 2024, primarily due to lower carat sales resulting from processing lower-grade stockpile material and a shift in mining operations. The company is addressing liquidity concerns with a $28 million draw from the Cost Overrun Reserve Account, supported by its largest shareholder. Despite challenges, Lucara made significant progress in its underground project at the Karowe Mine, with advancements in shaft development and consistent recovery of large diamonds, reinforcing its operational expertise.