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LGO, Largo Inc.

Metals & Mining capital-intensive UnprofitableDistress / turnaroundCapital build-outCyclical

Largo is a Canadian natural resource company listed on the TSX and NASDAQ.

We are one of the world's preferred vanadium companies focused on the production of vanadium pentoxide (V 2 O 5 ) at our Marac s Menchen Project located in Bahia, Brazil, being the Company's sole material project for the purposes of NI 43-101.

Largo Inc. is in the process of developing and increasing additional revenue streams from the deposit, including increasing its ilmenite concentrate sales, exploring the potential of TiO2 pigment production in the future, and commercializing its iron ore calcine material that is produced as a byproduct of production.

Latest annual: FY2025 40-F · US listing is the ordinary share

LGO · Largo Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$110M

−12.0% YoY · −2% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $110M 5-yr avg $172M

Gross margin 52% 5-yr avg 53%

Operating margin −34.9% 5-yr avg −15.2%

ROIC −13% 5-yr avg −5%

Owner-earnings margin −34% 5-yr avg −17%

Free cash flow margin −34% 5-yr avg −17%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Unprofitable. No sustained operating profit across the record; an earnings multiple has nothing to rest on. What the record does show is revenue, the gross-margin trajectory, and the burn against the cash on hand. Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock. Capital build-out. Capital spending has surged to 25% of sales, today's earnings are charged less depreciation than tomorrow's will be. Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Operating margin has reached 17% at its best but run negative through the cycle (median −12%) on a 52% gross margin — so the question is which reading is truer: whether the median was pulled below zero by one-off charges, by the cycle, or by spending it is still growing into, and whether it settles back at a profit. Inventory runs near 29% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on the commodity price and the cost position. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −3%, above 15% in 0 of 6 years). Owner earnings, the cash-based check, have been thin too. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2020–2025

realized figures from each filing · older years to the left

2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMDec 2025
							Income statement
$120M	$198M	$229M	$199M	$125M	$110M	$110M	RevenueRevenue
59%	62%	59%	48%	45%	52%	52%	Gross marginGross mgn
$7M	$33M	$6M	($23M)	($61M)	($38M)	($38M)	Operating incomeOp. inc.
6.0%	16.6%	2.8%	−11.8%	−48.9%	−34.9%	−34.9%	Operating marginOp. mgn
$7M	$23M	($1M)	($30M)	($50M)	($69M)	($69M)	Net incomeNet inc.
							Cash flow & returns
($60M)	$40M	$3M	$21M	$11M	($10M)	($10M)	Operating cash flowOp. cash
$17M	$22M	$21M	$26M	$27M	$21M	$21M	DepreciationDeprec.
($84M)	($4M)	($16M)	$25M	$34M	$37M	$37M	Working capital & otherWC & other
$18M	$27M	$42M	$54M	$42M	$27M	$27M	CapexCapex
15.1%	13.8%	18.4%	27.0%	33.8%	25.0%	25.0%	Capex / revenueCapex/rev
($78M)	$12M	($39M)	($32M)	($31M)	($38M)	($38M)	Owner earningsOwner earn.
−64.7%	6.2%	−16.9%	−16.3%	−24.9%	−34.3%	−34.3%	Owner earnings marginOE mgn
($78M)	$12M	($39M)	($32M)	($31M)	($38M)	($38M)	Free cash flowFCF
−64.7%	6.2%	−16.9%	−16.3%	−24.9%	−34.3%	−34.3%	Free cash flow marginFCF mgn
4%	12%	1%	-7%	-21%	-13%	-13%	ROICROIC
3%	8%	-1%	-12%	-30%	-53%	-53%	Return on equityROE
3%	8%	−1%	−12%	−30%	−53%	−53%	Retained to equityRetained/eq
							Balance sheet
$79M	$84M	$54M	$43M	$22M	$10M	$10M	Cash & investmentsCash+inv
$19M	$24M	$21M	$26M	$10M	$11M	$11M	ReceivablesReceiv.
$35M	$45M	$64M	$62M	$48M	$50M	$50M	InventoryInvent.
$16M	$20M	$27M	$31M	$31M	$43M	$43M	Accounts payablePayables
$38M	$49M	$59M	$56M	$26M	$18M	$18M	Operating working capitalOper. WC
$137M	$160M	$154M	$137M	$93M	$78M	$78M	Current assetsCur. assets
$44M	$42M	$39M	$42M	$114M	$154M	$154M	Current liabilitiesCur. liab.
3.1×	3.8×	4.0×	3.2×	0.8×	0.5×	0.5×	Current ratioCurr. ratio
$298M	$314M	$356M	$382M	$319M	$319M	$319M	Total assetsAssets
$25M	$15M	$40M	$75M	$92M	$107M	$107M	Total debtDebt
($54M)	($69M)	($14M)	$32M	$70M	$97M	$97M	Net debt / (cash)Net debt
5.3×	29.0×	4.0×	-2.4×	-6.5×	-2.9×	-2.9×	Interest coverageInt. cov.
$247M	$266M	$265M	$249M	$165M	$130M	$130M	Shareholders’ equityEquity
							Per share
56.4M	64.0M	64.4M	64.0M	64.1M	67.8M	83.7M	Shares out (diluted)Shares
$2.13	$3.10	$3.56	$3.10	$1.95	$1.62	$1.31	Revenue / shareRev/sh
$0.12	$0.35	$-0.02	$-0.47	$-0.78	$-1.01	$-0.82	EPS (diluted)EPS
$-1.38	$0.19	$-0.60	$-0.51	$-0.48	$-0.56	$-0.45	Owner earnings / shareOE/sh
$-1.38	$0.19	$-0.60	$-0.51	$-0.48	$-0.56	$-0.45	Free cash flow / shareFCF/sh
$0.32	$0.43	$0.65	$0.84	$0.66	$0.40	$0.33	Cap. spending / shareCapex/sh
$4.38	$4.15	$4.12	$3.88	$2.57	$1.92	$1.56	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	5-yr	5-yr
Revenue / share	−5.3%/yr	−5.3%/yr
Capital spending / share	+4.7%/yr	+4.7%/yr
Book value / share	−15.2%/yr	−15.2%/yr

The record, charted

FY2020–2025

Each measure over its full record; the current point and the worst year marked.

Share count

68Mpeak FY2025

ROIC

−13%low FY2024

Gross margin

52%low FY2024

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

($38M)owner earningsvs.($69M)net incomelow FY2020

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2021FY2024

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned a $69M loss into ($38M) of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	($69M)	($50M)	($30M)	($1M)	$23M
Depreciation & amortizationnon-cash charge added back	+$21M	+$27M	+$26M	+$21M	+$22M
Working capital & othertiming of cash in and out, other non-cash items	+$37M	+$34M	+$25M	−$16M	−$4M
Cash from operations	($10M)	$11M	$21M	$3M	$40M
Capital expenditurecash put back in to keep running and to grow	−$27M	−$42M	−$54M	−$42M	−$27M
Owner earnings	($38M)	($31M)	($32M)	($39M)	$12M
Owner-earnings marginowner earnings ÷ revenue	-34%	-25%	-16%	-17%	6%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 40-F · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -2.9×

Does not cover its interest

Operating income ($38M) ÷ interest expense $13M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $97M

Net debt against an operating loss

Cash $10M − debt $107M

What this means
Netting $10M of cash and short-term investments against $107M of debt leaves $97M owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 85d

Long (60+ days)

DSO 37 + DIO 344 − DPO 295 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital -7%

Below average through the cycle

6-yr median, range -21%–12%; -13% latest = NOPAT ($30M) ÷ invested capital $228M

Industry peers: median 2%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 6 years (it ran -13% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin -25%

Consumes cash through the cycle

6-yr median margin, range -65%–6%; latest ($38M) = operating cash ($10M) − maintenance capex $27M

Industry peers: median 2%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -34% of revenue this year, a -25% median across 6 years.
Are earnings backed by cash? ($10M)

Loss, and burning cash

Net income ($69M) · cash from operations ($10M)

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did not.

How is the cash used?

Where do the earnings go? —

Not enough data

What this means
The filing data didn't include the inputs for this check.
Investing or harvesting? 1.30×

Expanding

Capex $27M ÷ depreciation $21M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $110M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.51×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $107M vs ($76M) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (6-yr record) · 4 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −633%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.59/share (latest year $-0.82), the averaged base the calculator's gate runs on, and book value is $1.56/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2020–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 2 of 6

What this means
Lost money in 4 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 6 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 8% → −32% (3-yr avg ends)

What this means
Through the cycle the operating margin slipped — about 8% early to −32% lately, median −12% — competition or costs are biting in.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Worst year 2024 · −48.9% op. margin

What this means
Operations went underwater in 2024, understand why before trusting the good years.
Share count +3.8%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of fiscal year-end, Dec 31, 2025

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$78M

Cash & short-term investments$10M
Receivables$11M
Inventory$50M
Other current assets$8M

Current liabilities$154M

Debt due within a year$107M
Accounts payable$43M
Other current liabilities$4M

Current ratio0.51×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.19×stricter: inventory excluded

Cash ratio0.06×strictest: cash alone against what's due

Working capital($76M)the cushion left after near-term bills

Debt due this year vs. cash$107M due · $10M cash cash alone won't cover the maturities; it leans on refinancing or operating cash · both figures from the Dec 31, 2025 balance sheet

Cash runway0.3 yrsthe business is consuming cash; this is how long the cash on hand lasts at that rate

Deeper floors

Tangible book value$129Mequity stripped of goodwill & intangibles

Net current asset value($104M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$107Mno operating-lease liability tagged this quarter, so debt alone

From the company's latest filing.

How the cash was used, 2020–2025

Over the record, the business generated $6M of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$211M · 3597%

Source of funding−$205M
Reinvestment and shareholder returns ran $205M beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $25M to $107M, and cash and short-term investments drew down $69M.
Net change in share count48.4%
The diluted count rose from 56M to 84M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Inverting the record

Invert: instead of why Largo Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2020–2025.

2 of the 4 tests turned up something to look into; the other 2 came back clean.

Look hereDid the share count rise anyway?48.4%
Diluted shares grew 48.4% over 2020–2025. Owners were diluted on net; each share owns less of the business than it did. Read the buyback line beside this one, not on its own.
Look hereDid debt outgrow the business?$25M → $107M
Debt rose from $25M to $107M while owner earnings went from about ($35M) to ($34M): the borrowing grew and the earnings that would carry it are not there now. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

And these came back clean

Is it less profitable than it was?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

How much of the revenue rides on one buyer?
≈$11M · 10% of revenue on the largest customers (TTM)
“In the year ended December 31, 2025, the Company's revenues were from transactions with multiple customers, including two customers who represented more than 10% of revenues.”verify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Metals & Mining

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
MDUMDU Resources Group, Inc.	$1.9B	—	9.9%	5%	-0%
HLHecla Mining Company	$1.4B	22%	10.0%	-0%	2%
CMPCompass Minerals Intl Inc	$1.2B	—	8.3%	4%	4%
LEUCentrus Energy Corp.	$449M	26%	11.0%	—	7%
USLMUnited States Lime & Minerals Inc.	$373M	30%	22.1%	21%	18%
IPIIntrepid Potash Inc	$298M	—	-2.1%	-1%	-3%
LGOLargo Inc.	$110M	55%	-4.5%	-3%	-21%
UUUUEnergy Fuels Inc.	$66M	37%	-122.6%	-16%	-102%
Group median	—	30%	9.1%	-0%	1%

The price

What a price has to assume.

What the price implies

reverse-DCF

Enter the US price, in dollars: the NYSE/Nasdaq quote you hold. Largo Inc.'s US listing is the ordinary share itself. The record tables elsewhere on this page remain as filed.

Largo Inc. is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

Today’s price $

The assumptions Required return 9% Years to get there 10 Revenue growth 0%

Revenue, delivered−5%/yr’20→’25

Mature owner-earnings margin 15%

Enter a price to run it.

Owner earnings it must reach—

Margin the price demands—

Owner-earnings margin today−34%

Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

Weigh LGO against another business →

Cite: Owner Scorecard, "Largo Inc. (LGO), the owner's record," https://ownerscorecard.com/c/LGO, data as of 2026-07-09.

Manual order: ← LGCL its page in the Manual LI →

Industry order: ← LEU the Metals & Mining chapter LZM →