Charged Alpha Stock Encyclopedia

Credo Technology (CRDO) Q1 FY2027 — The stock fell 20.0% the next session, from $206.63 to $165.22.
Revenue rose 9.6% sequentially and adjusted earnings beat. But the $1,251m DustPhotonics acquisition closed on 28 May, inside this quarter, and neither the release nor the Form 10-Q filed the next day discloses one dollar of the acquired revenue - Credo judged the acquisitions immaterial to its results.
THE CALL: AVOID (3/5, MODERATE) — base-case value ~$134.98 vs ~$165.22 today.
KEY METRICS:
- Revenue $479.0m, +9.6% sequentially and +114.7% year on year; non-GAAP EPS $1.20 vs a $1.17 bar
- GAAP EPS fell to $0.67 from $0.88; operating income fell $35.1m while revenue grew $42.0m
- DustPhotonics closed 28 May for $1,251.1m: $769.6m cash, $169.1m shares, $310.0m contingent
- Goodwill $92.8m to $986.4m in one quarter; goodwill plus intangibles is 45.3% of total assets
- No acquired revenue and no pro forma in the 10-Q - Credo states the acquisitions were immaterial
- Working capital absorbed $123.2m, 95% of net income; the acquired balance sheet explains only 7%
- Consensus needs $732m a quarter after October, a 38% step above the $530m Credo actually guided
What to watch: Credo discloses the acquired revenue since 28 May, or an October print at the top of guidance with organic growth broken out
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

GitLab (GTLB) Q2 FY2027 — Shares closed at $49.59 on September 2, up 9.98% on the print - but they opened at $55.20 and handed back more than half the move before the close, on 28.9M shares against a 5.4M daily norm.
GitLab's revenue rose 21.3% to $286.3M and beat its own guide by $13.3M. Gross profit grew only 16.0%. Gross margin fell to 84.1% from 87.9% - the SIXTH consecutive quarterly decline, 513 basis points over eighteen months. The 10-Q names the cause in its own words: of the $17.1M rise in cost of revenue, $11.0M was 'third party hosting costs for SaaS and cloud usage', and another $3.4M and $3.6M of the same hosting sits in selling and engineering. That is $18.0M of the $50.3M of new revenue - 36 cents in every new dollar - going straight back out as rented compute. The marginal gross margin is 66% against 84% on the average book, and subscription cost of revenue grew 75.9% against subscription revenue up 21.5%. Demand is fine and we say so. The problem is that FY2027 adjusted free cash flow of about $240M sits against $255M of stock compensation, so the owner's cash is negative. Our fair value is $23.50 and we rate GitLab a SELL against a $49.59 close.
THE CALL: SELL (3/5, MODERATE) — base-case value ~$23.5 vs ~$49.59 today.
KEY METRICS:
- Revenue $286.3M +21.3%, $13.3M past the guided midpoint; gross profit $240.6M, up only 16.0%
- Gross margin 84.1% vs 87.9% - the sixth straight quarterly fall (89.2 to 84.1, 513bp since Q4 FY2025)
- 10-Q: $11.0M of the $17.1M cost-of-revenue rise is 'third party hosting costs for SaaS and cloud usage'
- Add $3.4M in selling and $3.6M in engineering: $18.0M of hosting against $50.3M of new revenue = 35.8%
- Marginal gross margin 66% against 84.1% on the average book
- Subscription cost of revenue +75.9% against subscription revenue +21.5%
- Non-GAAP diluted EPS $0.24 vs the $0.18 bar; GAAP a LOSS of $0.22 - a $0.46 per-share gap, $75.0M of it stock comp
- EPS basis PROVEN: Q1 $0.23 + Q2 $0.24 = the filed six-month $0.47; $42.093M over 173.949M shares = $0.24
- The JiHu minority earned +$0.712M, so the loss owned by shareholders is $(36.844)M, worse than the group's $(36.132)M
- Receivables swung $61.2M against a $52.5M fall in operating cash flow; DSO 82.0 days vs 76.5
- FY2027 modelled: revenue ~$1,151M +20.5%, adjusted operating margin 15.2% vs 17.0% last year
- Stock compensation ~$255M = 22.2% of revenue; operating margin after grants is MINUS 6.9%
- Adjusted free cash flow ~$240M less $255M of grants = MINUS $16M of owner's cash
- $1,257M of cash and investments, zero borrowings; $7.27 a share of net financial assets after the minority
- Fair value $23.50 = 60% of a DCF charging stock comp in full ($19.49) + 40% at half rate ($29.55); ignored entirely it is $37.33
- Reverse DCF: the $49.59 close needs a 48% terminal operating margin AFTER grants - GitLab has never posted a positive one
What to watch: One flat gross-margin quarter breaks the six-quarter run and we would say so; a marginal gross margin back above 75% would mean the new pricing is finally catching the compute bill
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

MongoDB (MDB) Q2 FY2027 — The stock fell 13.5% the next session, from $434.21 to $375.40.
The contracted backlog nearly doubled to $1.52bn and the tape read that as visibility. The 10-Q says 70.5% of it has never been invoiced to anybody and converts at the customers' own discretion - and only 18% of first-half revenue was sitting on the balance sheet when the half began.
THE CALL: SELL (3/5, MODERATE) — base-case value ~$282 vs ~$375.40 today.
KEY METRICS:
- Revenue $771.8m (+30.5%), the fastest in years; cleared its own 28 May guide midpoint by about $40m
- Remaining performance obligations $1,519.2m (+91%) - but $1,071.5m has never been invoiced (70.5%)
- Deferred revenue FELL to $447.7m from $470.7m at the January year end (-4.9%) while revenue grew 28%
- Only 18% of first-half revenue came from deferred revenue held at the start of it, down from 21%
- Adjusted operating margin 24% vs 15%; GAAP operating income $28.4m - guided NEGATIVE for Q3 and FY27
- FY27 guided stock compensation $628.9m EXCEEDS guided adjusted operating income of $616-636m
- H1 free cash flow $335.2m; $317.9m went to buybacks plus vesting tax - and the share count still rose
What to watch: deferred revenue grows faster than revenue for two straight quarters, OR the reported operating line stays positive through a quarter guided to a loss
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

HealthEquity (HQY) Q2 FY2027 — The stock fell 10.6% the same day, from $104.42 to $93.39.
Records on every line, guidance raised - and the filing shows the company has fixed the rate on $3.04bn of future HSA cash at 3.93%, a position now $91.5m underwater that Note 10 feeds back through custodial revenue.
THE CALL: HOLD (3/5, MODERATE) — base-case value ~$101.27 vs ~$97.00 today.
KEY METRICS:
- Revenue $350.7m (+7.6%); custodial/interest revenue $175.9m (+10.0%) = 50.2% of the company
- Net income $65.6m (+9.7%) but comprehensive income $28.3m (-52.8%)
- Non-GAAP EPS $1.24 (+14.8%); GAAP EPS $0.78 (+14.7%)
- Adjusted EBITDA $167.0m at a record 48% margin; service costs FELL to $73.2m
- Hedge book: 23 Treasury bond forwards, $3.04bn notional at 3.93%, $91.5m unrealised loss
- FY27 guide: revenue +$1m, adj EBITDA +$3m, non-GAAP EPS UNCHANGED at $4.66-$4.73
- HSA assets $37.9bn (+14%); 10.7m accounts (+8%); $231m of buybacks in H1
What to watch: the hedge notional stops growing AND the second half beats $2.25 adjusted EPS
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Science Applications International (SAIC) Q2 FY2027 — Shares gapped 11.5% on results day and touched a 52-week high of $142.66, then handed the whole move back to close at $128.22, up just 1.79% on 4.6x volume; one session later they sit at $126.78.
SAIC's income before income taxes ROSE 10.2% to $119M. Its net income FELL 19.7% to $102M. The entire $36M gap is one line: the base quarter carried a $47M tax benefit from settling an IRS audit of fiscal 2016-2019, which the 10-Q names outright. That is $1.00 per prior-year diluted share. It is why adjusted EPS of $3.01 against $3.63 reads as -17.1% - and why, against a base cleaned of that credit ($2.63), the same quarter is +14.5%. The same dollar sits inside FY2026's $10.75 full-year adjusted EPS, so guidance of $10.65-$10.75 looks flat and is really about +10%. But the operating business is barely growing: book-to-bill was 0.6 in the quarter and 0.8 over twelve months against 1.1 at the January year end, and SAIC's own raised revenue guidance implies a second half that SHRINKS 4.2% after a first half that grew 3.8%. We rate SAIC a HOLD, fair value $127.83 against $126.78.
THE CALL: HOLD (3/5, MODERATE) — base-case value ~$127.83 vs ~$126.78 today.
KEY METRICS:
- Revenue $1,880M +6.3% (5.3% organic) beat consensus by $116M; operating income $152M +9.4%, margin 8.1% vs 7.9%
- Income before income taxes $119M, +10.2% - but net income $102M, -19.7%
- The tax line swung $36M: a $17M charge this year against a $19M net CREDIT last year
- Effective tax rate 14.2% this quarter vs NEGATIVE 17.2% in the base quarter (10-Q tax note)
- The cause, quoted in the 10-Q: a $47M tax benefit from settling an IRS audit of fiscal 2016-2019
- $47M across the 46.8M prior-year diluted shares = $1.00 per share of non-repeating base
- Adjusted EPS $3.01 vs $3.63 = -17.1%; vs a cleaned $2.63 base = +14.5%
- EPS basis PROVEN quarterly: H1 GAAP $5.00 less Q2 $2.38 = the filed Q1 $2.62; H1 adj $6.24 less $3.01 = the filed $3.23
- Of the $0.38 of real adjusted EPS growth, $0.25 was the buyback and only $0.13 the business
- Adjusted operating margin 10.2% vs 10.3%; adjusted EBITDA margin 10.3% vs 10.5% - BOTH lower
- SG&A $87M, +16.0%, on revenue up 6.3% - the line that erased a 50bp segment margin gain
- Book-to-bill 0.6 in the quarter, 0.8 TTM, vs 1.1 at the January year end; backlog $22.1B, -$486M in six months
- Guidance raised to $7.2B-$7.3B revenue and $10.65-$10.75 adjusted EPS - but the EPS raise ($0.70) is EXACTLY the quarter's beat
- That guide implies H2 revenue of $3.46B, -4.2%, after H1 grew +3.8% - an 8.0 point swing
- H1 operating cash flow $273M vs $222M - and last year's included $101M pulled forward by selling receivables, this year's $0
- Net debt $2,359M = 3.13x guided adjusted EBITDA; tangible book value is NEGATIVE $2,204M
- Fair value $127.83: DCF $130.08, 10.25x guided EBITDA $125.10, 12x guided adjusted EPS $128.40, weighted 35/35/30
What to watch: Trailing book-to-bill back above 1.0 would make the guided H2 decline a phasing problem rather than a trend, and make us buyers at an 11.1% free cash flow yield; a third quarter below 1.0 turns it into a run-rate
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Sasol Limited (SSL) FY2026 — SSL closed at $12.45, +3.6% against the $12.02 prior close, on 1.99m shares - about 2.4x the prior session. The ADR has risen 79% in twelve months and is still 12.9% below the $14.29 it reached on 5 May.
Secunda - the coal-to-liquids complex behind almost all of Sasol's profit - had its highest annual output in five years and beat guidance. Sasol wrote it down anyway: R7.7bn, the third consecutive impairment of the same refinery, R27.3bn in three years. The company's own explanation is that management actions did improve the recoverable amount, and 'these benefits were offset by the stronger forecast Rand/US$ exchange rate'.
THE CALL: HOLD (3/5, MODERATE) — base-case value ~$11.65 vs ~$12.45 today.
KEY METRICS:
- PERIOD: the year ended 30 June 2026. Form 20-F accession 0001104659-26-104048, filed 1 September 2026; KPMG unmodified opinion. Sasol reports in SOUTH AFRICAN RAND
- TURNOVER R272.1bn (+9.2%) - ADJUSTED EBITDA R60.7bn (+17%) - OPERATING PROFIT BEFORE WRITE-DOWNS R43.0bn - EBIT R25.7bn (+37%) - gross margin 46%
- HEADLINE EPS R38.31 (+9%) vs BASIC EPS R18.99 (+79%). Attributable earnings rose R5.4bn; R3.3bn of that is only a smaller impairment charge. 61% of the increase is the write-down shrinking
- IMPAIRMENTS R16.8bn: Secunda refinery R7.7bn, Mozambique gas R3.8bn, polyethylene R3.7bn. Secunda impaired R7.8bn / R11.8bn / R7.7bn in three straight years = R27.3bn; R112.4bn group-wide
- SASOL'S OWN WORDS: management actions improved the recoverable amount and 'these benefits were offset by the stronger forecast Rand/US$ exchange rate'. The test assumed R17.09; spot R16.18
- EVERYTHING ELSE IN THAT MODEL HELPED: Brent raised to $76.80/bbl from $72.16, refining margin to $9.81, SA discount rate CUT 14.50% to 11.50%. It impaired anyway
- CASH: cash generated by operating activities R42.0bn, DOWN 12%, in the year profit rose 79%. Net working capital 18.3% of turnover vs a 15.5-16.5% tatarget - the only miss
- FREE CASH FLOW R11.9bn (-5%), capex down 18% to R20.9bn. SEGMENTS: Fuels EBIT R19.9bn from R5.2bn; Chemicals Africa swung to a R3.3bn LOSS from R5.0bn of profit
- NO DIVIDEND FOR A THIRD YEAR: policy pays 30% of free cash flow only below $3.0bn net debt. It is $3.3bn, about $300m short, and FY2027 guidance is 'lower than $3.3 billion'
- FY2027 GUIDANCE: capex R23-26bn (UP from R20.9bn), SA break-even $53-58/bbl (UP from $49), International Chemicals EBITDA $450-600m (DOWN from $604m), net debt below $3.3bn
- AT $12.45: market cap $7.97bn on 640.1m shares; EV R199.8bn = 3.29x EBITDA; 5.3x headline earnings; 0.79x book; 9.2% FCF yield. One ADS = ONE ordinary share
What to watch: A rand back through R18 to the dollar - which lifts rand earnings, lifts the recoverable amount in the impairment test and shrinks the dollar net debt against the dividend gate at once. Against that: a fourth Secunda write-down next September, or International Chemicals at the $450m floor.
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Yext (YEXT) Q2 FY2027 — YEXT closed the reaction session at $6.53, -3.5% on 2.90m shares, 2.2x the prior session - a beat, sold.
Adjusted diluted EPS went $0.12 to $0.21 against a $0.17 bar. Decomposed, 4.4 cents of the 8.1-cent rise is the smaller share count and only 3.8 cents is higher profit - so 54% of the growth came from the denominator, and the share-count effect is larger than the 4.0-cent beat itself. Run the same profit over last year's diluted count and it is $0.162: a miss.
THE CALL: HOLD (3/5, MODERATE) — base-case value ~$6.58 vs ~$6.53 today.
KEY METRICS:
- PERIOD: Q2 of fiscal 2027, the three months ended 31 July 2026
- REVENUE $111.1m (-1.8%) - and $197,000 under the $111.3m consensus
- ADJUSTED EPS $0.21 diluted vs a $0.17 bar - but $0.162 at last year's share count, which is a MISS
- EPS BRIDGE: of the 8.1-cent rise, 3.8 cents is profit and 4.4 cents is the buyback = 54%
- ADJUSTED EBITDA $34.0m (+29.0%), a record 30.6% margin vs 23.3%
- ANNUAL RECURRING REVENUE $440.8m (-0.8%) - $50K+ cohort $405.9m (+1.6%), NRR 98%
- FIRST HALF: Adjusted EBITDA +19.4% while free cash flow -0.7% - the cash did not follow
- SELF-TENDER: 24,347,825 shares at $5.75 for $140m, completed 23 March 2026 - the FLOOR of a $5.75-$6.50 range
- THE CEO HAD OFFERED $9.00 a share and WITHDREW it on 2 February 2026
- BALANCE SHEET: cash $154m to $87m, debt $98m to $148m, equity $159m to $36m
- VALUATION: EV $707m = 1.60x ARR, 5.8x annualised Adjusted EBITDA, 12.2x trailing free cash flow
- FAIR VALUE $6.58 (HOLD, 3/5) vs $6.53 - DCF $6.14, EBITDA $7.39, FCF $6.67
What to watch: Total annual recurring revenue actually printing a positive year - our cohort arithmetic only gets there in year two. Against that: the $50K-plus cohort stalling, cash falling toward the $35m covenant floor, or more borrowing at 9.5% to buy a 8.2% free-cash-flow yield.
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

MiniMed Group (MMED) Q1 FY2027 — MMED closed the reaction session at $22.42, +10.7% - the highest close it has ever had, on 6.07m shares, 5.1x the twenty-day median and 21.7% of the entire public float.
MiniMed Flex - the insulin pump behind a U.S. growth acceleration to 13.1% and a +10.7% session - was developed on $324m of funding from Blackstone Life Sciences. For the first two years after U.S. approval and commercial launch, Blackstone earns the greater of a mid-to-high single-digit royalty on net sales or a minimum payment: $157m on Flex and $162m on the MiniMed Fit patch pump. Flex launched in the quarter just reported and Fit was filed with the FDA on the morning of this print, so both clocks are now running. The earnings release does not contain the word Blackstone.
THE CALL: HOLD (3/5, MODERATE) — base-case value ~$23.97 vs ~$22.42 today.
KEY METRICS:
- PERIOD: Q1 of fiscal 2027, ended 31 July 2026, in a year ending 30 April 2027. The SEC submissions metadata says December - it is wrong
- NET SALES $843m (+16.6% reported, +15.8% organic) - CGM $431m (+19.9%, now 51% of revenue) - CONSUMABLES $261m (+13.8%) - PUMPS $144m (+21.5%) - U.S. $240m (+13.1%) - INTERNATIONAL $603m (+18.1%)
- THIS WAS A 14-WEEK QUARTER: 25 April to 31 July 2026, 98 days against 91. The calendar moved off Medtronic's 52/53-week year to month-end; the company puts the benefit at 4-6%
- THE GUIDANCE RAISE IS CLEAN: the June guide said ~10% organic 'includes a 1.0 to 1.5% expected benefit from the extra week'; today's says ~10.5% on identical treatment. 50bp of genuine upgrade
- OPERATING INCOME $5m on $843m - a 0.59% margin. Gross profit +$56m, other operating expense -$38m, SG&A -$29m, litigation +$19m, R&D +$10m. Every one of those moved more than the entire result
- GAAP EPS $0.00 vs -$0.08. $4m of pre-tax income against a $4m tax provision - a 100% effective rate. MiniMed publishes NO adjusted EPS; any $0.12 you see has no counterpart in the filing
- GROSS MARGIN 55.2% vs 56.6%, down 141bp - in a quarter carrying an extra week, which should have helped. Incremental gross margin 46.7%, ten points below the book it was added to
- BLACKSTONE (10-K Note 11): $324m of development funding recognised, $212m tied to Flex and Fit. Minimums $157m and $162m; then royalties until a low single-digit multiple of the funding is repaid, then five more years
- BALANCE SHEET at 24 April 2026: $298m cash, no borrowings, $500m revolver undrawn, $455m still due from Medtronic. FY2026 operating cash flow -$197m, capex $223m, free cash flow -$420m
- OWNERSHIP: Medtronic holds 252,813,348 shares, approximately 90%, and has announced its intention to divest. The float is 28.0m shares and 21.7% of it traded on the day of this print
- VALUATION: enterprise $6.00bn, 1.93x FY2026 sales, 1.75x the guided FY2027 - against Insulet at 3.50x on almost identical revenue. DCF $19.57, peers on profit $17.01, peers on revenue $39.73, weighted $23.97
- STREET, by firm and date: BTIG $28 (1 Sep, raised), Wells Fargo $26 (1 Sep, raised from $22), UBS $25 (28 Jul, initiated Buy), Piper Sandler $16 (4 Jun). Average $23.75, a 75% spread
What to watch: Gross margin rising year on year in any single quarter, or operating expense held within 2% of the prior year in dollars for two consecutive quarters - which is what a 16% adjusted margin actually requires. Against that: a second straight quarter of falling gross margin, or cash below $200m once the royalty starts settling.
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

NIO Inc (NIO) Q2 2026 — NIO closed the reaction session at $4.06, -4.0% - the lowest close in twelve months, on 81m shares. It is 49.4% below its $7.89 high of 2 October 2025.
NIO delivered 24,193 more vehicles in the June quarter than in the March quarter - a 29.0% jump, and 49.4% more than a year ago. Those extra cars brought RMB1,047m of incremental gross profit and cost RMB1,086m of incremental operating expense, so the operating loss WIDENED, from RMB309m to RMB347m. SG&A per vehicle fell just 1.9% on 29.0% more volume. And the volume is now gone: 35,934 cars in July, 35,836 in August, and a Q3 guide of 108,000-111,000 that is only +0.3% to +3.1% sequential.
THE CALL: SELL (3/5, MODERATE) — base-case value ~$2.44 vs ~$4.06 today.
KEY METRICS:
- PERIOD: the THREE MONTHS ended 30 June 2026. NIO is a foreign private issuer: it files a 6-K, reports in RMB and translates at one rate, RMB6.7851 to US$1.00 (30 June H.10 noon buying rate). One ADS = ONE ordinary share
- DELIVERIES 107,658 (+29.0% QoQ, +49.4% YoY) - but July 35,934 and August 35,836 against a Q2 monthly average of 35,886. Still 13.7% under the Q4 2025 peak of 124,807
- THE INCREMENTAL BRIDGE: +RMB1,047m gross profit vs +RMB1,086m opex = a RMB38m gap, exactly the widening in the operating loss. Incremental gross margin 15.9% vs 18.4% blended
- REVENUE $4,736m (+69.1% YoY) - GROSS MARGIN 18.4%, up 840bp in a year - VEHICLE MARGIN 18.5% - OPERATING LOSS $51m - NET LOSS $78m - GAAP EPS -$0.04 vs a -$0.07 estimate
- EARNINGS QUALITY: the RMB24.8m 'adjusted net profit attributable' is a RMB722m loss plus RMB554m stock comp plus RMB192m of accretion on redeemable NCI. Strip that last add-back and it is a RMB168m LOSS
- BALANCE SHEET: RMB56.7bn ($8,352m) of cash - but trade and notes payable are $8,900m, MORE than the whole cash pile, and 209 days of cost of sales. NIO equity is 2.97% of assets. No cash flow statement in this release
- GUIDANCE Q3 2026: 108,000-111,000 vehicles (+0.3% to +3.1% sequential) and RMB33,285m-RMB34,051m revenue. The company frames it as +53% to +56% YoY
- VALUATION: EV $7.89bn = 0.42x annualised sales. 2028 scenarios $1.15 / $2.43 / $4.72 weighted to $2.44. The price implies a 5.15% operating margin vs the 0.64% just posted
- WALL STREET: not one house has published since this print. Newest target 22 May 2026 (102 days before). Bernstein $6.00, CMB Int'l $7.00, BofA $6.80, HSBC $6.80; average $6.65. We are at $2.44
What to watch: Two consecutive months above 38,000 deliveries, or a quarter where SG&A per vehicle falls faster than volume rises. Against that: September deliveries below 36,230 would miss the guide outright.
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Sibanye Stillwater (SBSW) H1 2026 — SBSW went in at $11.85 and closed the reaction session at $11.66 (-1.6%) - a record half-year, and the tape shrugged. It is 44.8% below its January close of $21.12 and 45.8% above its July low of $8.00.
Every one of Sibanye-Stillwater's four producing operations mined LESS metal in the six months to 30 June 2026 - SA PGM 4E -1.8%, SA gold -2.2%, US PGM 2E -2.3%, Century zinc -11.8%. Revenue still rose 64% to a record R90.0bn and the group swung from a $211m loss to a $1,147m profit, because the 4E basket rose 67% and gold rose 35%. Unit costs rose everywhere too. Nothing here was earned at the rock face - so we value it as a claim on a price deck, not as an operator.
THE CALL: BUY (3/5, MODERATE) — base-case value ~$14.93 vs ~$11.66 today.
KEY METRICS:
- PERIOD: the SIX MONTHS ended 30 June 2026 - a semi-annual foreign private issuer filing a 6-K, not a 10-Q. There is no quarterly Street EPS bar here
- PRODUCTION FELL AT ALL FOUR OPERATIONS: SA PGM 789,647oz 4E (-1.8%), SA gold 293,665oz (-2.2%), US PGM 137,930oz 2E (-2.3%), Century zinc 45kt (-11.8%)
- PRICES ROSE AT ALL FOUR: 4E basket +67% to R43,996/4Eoz ($2,681), gold +35% ($4,597/oz), US 2E basket +70% to $1,672, zinc +12%
- Revenue R89,977m (+64%, a record); adjusted EBITDA R31,843m (+111%); profit R18,807m ($1,147m) vs a R3,906m ($211m) loss
- Attributable to owners $1,082m; NCI R1,062m. Basic EPS 627 SA cents/ordinary share = $1.53 per ADR (1 ADR = 4 ordinary shares)
- Part of the swing is an absence: H1 2025 carried $526m of impairments, H1 2026 none. Headline earnings, which strip impairments from BOTH years, still roughly tripled to $1,036m
- CASH QUALITY: operating cash R19,614m, but R9,361m (48%) is a working-capital swing in payables. Notional free cash flow is $881m vs negative $123m a year ago
- Costs rose everywhere: SA PGM AISC +10% to R26,252/4Eoz, SA gold +14%, US PGM +12% to $1,347/2Eoz - and the filing guides costs HIGHER in H2
- Balance sheet repaired: gross debt -20% y/y to $1.99bn, net debt -56% since December to $593m, net debt/EBITDA 0.18x. Interim dividend 49.73 US cents per ADR ($352m), the TOP of policy
- Recycling was the only genuine grower and it is not a mine (+536% underlying ex-45X). Keliber lithium lost $15m, EUR719m spent, nothing sold yet
- VALUATION: EV $8,844m at 4.0x EV/adjusted EBITDA on each reported half annualised - H1 2026 deck $21.11, H2 2025 $13.82, H1 2025 $8.41; weighted 30/50/20 = $14.93. You pay 2.28x / 3.41x / 5.41x today
- That fair-value range $8.41-$21.11 is almost exactly the ADR's own 12-month range of $8.00-$21.12 - this stock is a derivative on a price deck
- STREET, all PRE-print: BMO Market Perform $12 (cut from $18, 14 Jul); RBC Outperform $16.50 (29 Jun); HSBC Buy $24.80 (23 Jan). Average $17.77 vs our $14.93 - we are 16% BELOW the Street, 28% above the tape
What to watch: H2 unit costs inside guidance rather than at the top, Keliber's first lithium sale, or gross debt past the halfway mark of the 50% reduction target. Against that: a 4E basket back below R35,000/4Eoz, a fresh Keliber impairment, or H2 costs at the top while the basket falls.
Also on YouTube: @ChargedAlpha
DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.