Allkem Ltd
ASX:AKE
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EV/EBITDA
Enterprise Value to EBITDA (EV/EBITDA) ratio compares a company`s total enterprise value to its earnings before interest, taxes, depreciation, and amortization. It shows how much investors are paying for each dollar of the company`s earnings, including both equity and debt.
Enterprise Value to EBITDA (EV/EBITDA) ratio compares a company`s total enterprise value to its earnings before interest, taxes, depreciation, and amortization. It shows how much investors are paying for each dollar of the company`s earnings, including both equity and debt.
Valuation Scenarios
If EV/EBITDA returns to its 3-Year Average (4.4), the stock would be worth AU$9.07 (8% downside from current price).
| Scenario | EV/EBITDA Value | Implied Price | Upside/Downside |
|---|---|---|---|
| Current Multiple | 4.8 | AU$9.83 |
0%
|
| 3-Year Average | 4.4 | AU$9.07 |
-8%
|
| 5-Year Average | 4.6 | AU$9.44 |
-4%
|
| Industry Average | 12.1 | AU$24.82 |
+152%
|
| Country Average | 16.5 | AU$33.82 |
+244%
|
Forward EV/EBITDA
Today’s price vs future ebitda
| Today's Enterprise Value | EBITDA | Forward EV/EBITDA | ||
|---|---|---|---|---|
|
AU$5.5B
|
/ |
Jul 2023
$806.9m
|
= |
|
|
AU$5.5B
|
/ |
Jun 2024
$661.6m
|
= |
|
|
AU$5.5B
|
/ |
Jun 2025
$792.2m
|
= |
|
|
AU$5.5B
|
/ |
Jun 2026
$1.1B
|
= |
|
|
AU$5.5B
|
/ |
Jun 2027
$1.3B
|
= |
|
|
AU$5.5B
|
/ |
Jun 2028
$1.2B
|
= |
|
Forward EV/EBITDA shows whether today’s EV/EBITDA still looks high or low once future ebitda are taken into account.
Peer Comparison
| Market Cap | EV/EBITDA | P/E | ||||
|---|---|---|---|---|---|---|
| AU |
A
|
Allkem Ltd
ASX:AKE
|
6.3B AUD | 4.8 | 10 | |
| AU |
|
BHP Group Ltd
ASX:BHP
|
284B AUD | 7.5 | 19.5 | |
| AU |
|
Rio Tinto Ltd
ASX:RIO
|
282.1B AUD | 8.4 | 20.1 | |
| UK |
|
Rio Tinto PLC
LSE:RIO
|
121B GBP | 7.6 | 16 | |
| MX |
|
Grupo Mexico SAB de CV
BMV:GMEXICOB
|
1.6T MXN | 9.6 | 18.9 | |
| CH |
|
Glencore PLC
LSE:GLEN
|
64.3B GBP | 11.3 | 234.4 | |
| SA |
|
Saudi Arabian Mining Company SJSC
SAU:1211
|
248.9B SAR | 18.1 | 33.9 | |
| CN |
|
CMOC Group Ltd
SSE:603993
|
434.1B CNY | 10.1 | 21.4 | |
| UK |
|
Anglo American PLC
LSE:AAL
|
43.7B GBP | 10.5 | -15.5 | |
| CN |
C
|
China Molybdenum Co Ltd
OTC:CMCLF
|
53.5B USD | 8.5 | 18.1 | |
| ZA |
A
|
African Rainbow Minerals Ltd
JSE:ARI
|
46.3B ZAR | -76.6 | 35.9 |
Market Distribution
| Min | 0 |
| 30th Percentile | 10 |
| Median | 16.5 |
| 70th Percentile | 24.5 |
| Max | 6 797.5 |
Other Multiples
Allkem Ltd
Glance View
Allkem Ltd., a name that resonates within the lithium sector, is a company born out of a strategic fusion and a vision to supply the world's growing demand for this transformative metal. Established from a merger of Orocobre Limited and Galaxy Resources in 2021, Allkem crafts its identity around the production of lithium chemicals, which are essential to powering the world's shift towards clean energy and electrification. In essence, the company's operations revolve around mining, extraction, and refining processes. Its portfolio, though concentrated, is geographically diverse, with operational footprints spanning from the brine-rich flats of Argentina to the mineral-rich grounds of Western Australia and Canada. The company's revenue streams primarily flow from the sale of lithium carbonate and lithium hydroxide, key components for lithium-ion batteries used in electric vehicles and consumer electronics. Allkem leverages its geographically varied operations to meet global demand. For instance, its flagship project, the Salar de Olaroz in Argentina, is a marvel of efficient brine extraction technology, producing lithium carbonate that's highly coveted in the global market. Meanwhile, the Mt Cattlin operation in Australia focuses on high-purity spodumene concentrate, represented forwardly in their financial statements as they expand their influence in an electrified world. By anchoring its business model in both strategic resource deployment and responding to a surge in battery-powered innovation, Allkem stands as a pivotal player in the evolving landscape of sustainable energy solutions.
