Is Vizsla riskier than MP Materials Corp (USA Stocks:MP)?
 | By Rifka Kats | Macroaxis Story |
Analyzing key indicators for Vizsla Resources and MP Materials allows for a comparison of how market volatility affects both companies' prices. It also helps determine if combining them in a portfolio can diversify market risk. Pair trading strategies can be utilized, matching a long position in MP Materials with a short position in Vizsla Resources. For more information, refer to our pair correlation module.
Examining the assets, one method to assess Vizsla's asset utilization is by determining the profit generated per dollar of reported assets. Vizsla Resources Corp has a negative asset utilization of -0.0494%, losing $0.000494 for each dollar of assets held. This poor asset utilization suggests the company is not effectively using its assets, indicating inefficient operations for each dollar spent on its assets.
Main Takeaways
Investing in Vizsla Resources Corp presents a unique risk profile, particularly when compared to MP Materials Corp. With a market capitalization of 336M, Vizsla Resources Corp is significantly smaller than many of its industry peers, which could potentially expose investors to higher levels of volatility. Furthermore, the company's high probability of bankruptcy at 84.36% is a significant red flag, indicating a high level of financial risk. On the other hand, the company's book value per share of 1.10X and price to book ratio of 1.98X suggest that the stock may be undervalued, providing potential upside for risk-tolerant investors. However, with a net income from continuing operations showing a loss of 13.6M, the company's financial performance leaves much to be desired. In comparison, MP Materials Corp, with its larger market capitalization and more stable financial performance, may present a safer investment opportunity for those with a lower risk tolerance.Macroaxis uses a strict editorial review process to publish stories and blog posts. Our publishers support our company and may receive a small commission when the partner links or references are utilized. Commissions do not affect the opinions or evaluations of our editorial team. The information our editors and media partners deliver is confidential and licensed for your sole use as a Macroaxis user. We reserve all rights to the content of this article, and therefore copying or distributing this story in whole or in part is strictly prohibited.
Reviewed by Gabriel Shpitalnik
In the world of investing, not all that glitters is gold. This is particularly true when comparing the investment risks of Vizsla Resources Corp and MP Materials Corp, two players in the Basic Materials sector, specifically in the Metals & Mining industry. Vizsla Resources Corp, with a market capitalization of $336M and an enterprise value of $310.9M, has been navigating through turbulent waters. The company's operating income reflects a loss of $13.5M, and its gross profit stands at a loss of $269.2K. This financial performance has led to a negative return on equity of 0.09 and a negative return on assets of 0.05, indicating the company's struggle to generate profits from its investments and assets. The company's stock has seen a 52-week high of $1.68, but its 50-day moving average stands at $1.2895, and the 200-day moving average is at $1.162, suggesting a potential downtrend. The company's book value is $1.099, which is a critical factor for investors to consider. Vizsla Resources Corp's probability of bankruptcy stands at a concerning 84.36%, a figure that cannot be ignored by potential investors. The company's Z score, a predictor of bankruptcy, is at -0.11, further emphasizing the financial risk involved. In conclusion, while Vizsla Resources Corp operates in a lucrative industry, its financial performance and high bankruptcy risk make it a potentially risky investment. Investors should weigh these factors against their risk tolerance and investment objectives before making a decision. Many prudent traders are steering clear of the metals and mining sector. However, it's worth taking a closer look at Vizsla Resources Corp to understand its position relative to MP Materials and similar companies. We will examine some competitive aspects of both Vizsla and MP Materials.Investment perspective, in general, refers to a viewpoint or opinion regarding investment opportunity in Vizsla Resources. It encompasses the assessment of an investment's potential risks and rewards, and expectations for its performance over time. Several factors influence the investment perspective on Vizsla Resources, including investment goals, risk tolerance, time horizon, market conditions, and research and analysis. Investors have varying goals, such as capital preservation, income generation, or long-term growth. Risk tolerance plays a significant role in shaping an investor's perspective, with some being more risk-averse and others willing to take on higher risks for potential returns.
How important is Vizsla Resources's Liquidity
Vizsla Resources financial leverage refers to using borrowed capital as a funding source to finance Vizsla Resources Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Vizsla Resources financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Vizsla Resources' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Vizsla Resources' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Vizsla Resources's total debt and its cash.
Vizsla Resources Gross Profit
Vizsla Resources Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Vizsla Resources previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Vizsla Resources Gross Profit growth over the last 10 years. Please check Vizsla Resources' gross profit and other fundamental indicators for more details.
An Additional Perspective On Vizsla Resources Corp
As Warren Buffet wisely said, risk comes from not knowing what you're doing. When comparing the investment risks of Vizsla Resources Corp and MP Materials Corp, it's clear that Vizsla carries a higher level of risk. With a high beta of 1.96, Vizsla's stock price is likely to experience larger swings compared to the market, indicating a higher level of volatility. Furthermore, the company's high probability of bankruptcy at 84.36% is a significant red flag for potential investors. However, it's worth noting that Vizsla has a strong current ratio of 4.13X, suggesting it is well-positioned to meet its short-term obligations. Despite these risks, investors should also consider the potential upside of 6.15, which could offer substantial returns if the company can navigate its challenges successfully.
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