Largo Inc. (LGO)
Market price: $0.38
3 valuation methods
- P / B: $1.10 to $2.28 (midpoint $1.67)
- EV / Revenue: $1.53 to $5.00 (midpoint $3.26)
- EV / Gross Profit: $2.17 to $14.47 (midpoint $5.66)
How each method works
P / B: $1.10 to $2.28 (midpoint $1.67)
Values the stock at a peer multiple of its book (net asset) value — most meaningful for asset-heavy and financial companies whose balance sheet drives value.
- How it’s calculated
- We take book value per share (total assets minus total liabilities, from the latest balance sheet, divided by shares outstanding) and multiply it by the range of price-to-book multiples the peer group trades at.
- Why it fits this industry
- Where the balance sheet is the business — lenders, insurers, asset-heavy operators — the price the market pays for a dollar of net assets is a natural yardstick.
- Reading this bar
- The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together. Asset-light companies (brands, software) legitimately trade far above book value, so for them a P/B bar well below the price is usually structure, not signal.
P / B = (0.70/1.07/1.46)× book_value_per_share 1.56 ≈ 1.10/1.67/2.28 (per_share)
EV / Revenue: $1.53 to $5.00 (midpoint $3.26)
Values the whole business at a peer multiple of sales — used when earnings are thin, volatile, or not yet meaningful, so revenue is the most reliable yardstick.
- How it’s calculated
- We multiply the company's last-twelve-month revenue by the range of EV/Revenue multiples its peer group trades at, subtract net debt and any minority interests or preferred stock ranking ahead of common shareholders, and divide by shares outstanding for a per-share range.
- Why it fits this industry
- When profits are thin, volatile, or still to come, revenue is the most dependable figure a company reports — this method values the business on the scale of what it actually sells.
- Reading this bar
- The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together. A pound of revenue is worth more at a high margin than a low one, so the peer group here is narrowed to companies earning a similar margin wherever enough of them exist. Where too few do, the bar falls back to the wider group and is the bluntest of the multiples — weigh it alongside the earnings-based bars.
EV / Revenue = (3.08/4.40/5.72)× revenue 109,887,000 ≈ 338,503,933.58/483,577,047.97/628,650,162.36 (enterprise_value); enterprise_value -> per share: equity (127,906,933.58/272,980,047.97/418,053,162.36) / 83,673,905 shares [EV bridge: minus net debt 204,416,000, minus minority interest & preferred 6,181,000]
EV / Gross Profit: $2.17 to $14.47 (midpoint $5.66)
Values the business at a peer multiple of gross profit — useful where reported operating costs vary a lot across peers but gross economics are comparable.
- How it’s calculated
- We take last-twelve-month gross profit (revenue minus the direct cost of the goods or services sold), multiply it by the peer range of EV/Gross-Profit multiples, subtract net debt and any minority interests or preferred stock ranking ahead of common shareholders, and divide by shares outstanding.
- Why it fits this industry
- Gross profit sits between revenue and operating earnings: it credits the margin a company's products earn while ignoring overhead and investment choices that legitimately differ across peers.
- Reading this bar
- The bar is the per-share value range this method implies: a conservative low, a central estimate, and an optimistic high. If the current price sits below the bar, the market is pricing the shares below what this method's inputs suggest; if it sits above, the market is pricing them higher. No single bar is a verdict — methods disagree for good reasons, so read the whole field together.
EV / Gross Profit = (6.84/11.93/24.79)× gross_profit 57,328,000 ≈ 392,171,837.72/684,092,303.67/1,421,236,012.23 (enterprise_value); enterprise_value -> per share: equity (181,574,837.72/473,495,303.67/1,210,639,012.23) / 83,673,905 shares [EV bridge: minus net debt 204,416,000, minus minority interest & preferred 6,181,000]
3 methods not shown
- EV / EBITDA: EBITDA is non-positive — an EBITDA multiple yields no meaningful enterprise value (loss-making at the EBITDA line)
- P / E: diluted EPS is non-positive — P/E is not meaningful for a loss-making period
- DCF (FCFF): base unlevered FCF is non-positive (-25,848,011.98) — nothing to discount; a standard FCFF DCF does not apply
Debt is most of what funds this company — its shares are about 13% of its total enterprise value. The enterprise-value bars here (2) value the whole business and then subtract the debt, so a small difference in the business's value becomes a large one per share. That is arithmetic, not a fault in the estimate, but it is why those ranges are wide.