Assessing TMC The Metals (TMC) Valuation After Mixed Returns And A Deeply Negative Price To Book Ratio
TMC the metals (TMC) has seen mixed share performance, with a 3.2% move over the past week, a 5.4% gain over the past month, and a 34.5% decline across the past 3 months.
Over a longer horizon, reported total returns of 5.1% over the past year and a very large 3-year figure contrast with a 39.4% decline across 5 years, highlighting how timing has mattered for shareholders.
See our latest analysis for TMC the metals.
With the share price at $7.0, recent trading has been choppy. Short term share price returns contrast sharply with the very large 1 year and 3 year total shareholder returns, suggesting momentum has cooled after earlier enthusiasm and changing views on risk and reward.
If TMC the metals has you thinking about where growth stories might emerge next, it could be worth scanning other resource focused names or even broadening out to fast growing stocks with high insider ownership for fresh ideas.
With TMC the metals showing mixed recent returns and reporting rapid growth in revenue and net income, and with a share price around $7.00, is this a misunderstood growth story, or is the market already pricing in the future?
TMC the metals currently reports negative shareholders’ equity, which results in a P/B ratio of -71.2x compared with 2.5x for the US Metals and Mining industry and 11.7x for its peer group.
P/B usually helps you compare a company’s market value with the net value of its assets, but once equity turns negative, that comparison stops being meaningful. Instead of signalling a bargain or an expensive stock, a deeply negative P/B mainly reflects a balance sheet where liabilities exceed assets.
For TMC, that negative equity position, together with no meaningful revenue and ongoing losses of US$295.5m, means traditional multiple based valuation tools provide limited insight into what the current US$7.00 share price implies about future cash generation.
Against industry averages, the contrast is stark, but it does not translate neatly into under or overvaluation in the usual way, because the ratio is being driven by the capital structure rather than profitable operations or asset backing.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-book of -71.2x (ABOUT RIGHT as a reflection of negative equity rather than a clean valuation signal)
However, you also need to weigh risks such as ongoing losses of US$295.5m with no meaningful revenue, as well as execution hurdles in deep sea minerals extraction and regulation.
