ITFS

How does the current valuation (EV/EBITDA, P/E) compare to its historical averages and to peers?

Created August 06, 2025 at 09:11 PM

Answer

The press release you quoted reports Itafos Inc.’s (ticker ITFS) Q2 2025 operating and financial results, but it does not include any valuation multiples such as EV/EBITDA, P/E, nor any discussion of how those figures compare to the company’s historical averages or to its peer group. Consequently, a direct comparison cannot be drawn from the information in the release alone.

Below is a step‑by‑step guide on how you can obtain the required valuation metrics and perform the comparison you’re looking for:

1. Gather the Necessary Data

Data Needed	Where to Find It
Current market price (share price)	Real‑time market data feeds (e.g., Bloomberg, Reuters, Yahoo! Finance, your brokerage platform).
Shares outstanding	Latest quarterly or annual filing (Form 10‑K, 10‑Q, or SEDAR filing) – usually listed in the “Capital Stock” or “Share Capital” section.
Net debt (total debt – cash & cash equivalents)	Balance sheet in the Q2 2025 or Q1 2025 financial statements (available on the company’s website or SEDAR).
EBITDA for the latest period	Income statement in the Q2 2025 results (or the most recent twelve‑month EBITDA, which may be disclosed in the MD&A or footnotes).
Historical EBITDA and earnings (to compute historical multiples)	Prior quarterly/annual reports (e.g., Q2 2024, Q2 2023) – all are on the company’s SEDAR archive.
Peer group financials (market cap, debt, EBITDA, earnings)	Comparable companies in the specialty chemicals / petrochemicals sector (e.g., Husky Energy, Westlake Chemical, BASF, Orion Engineered Carbons). Use the same sources as above for each peer.

2. Calculate the Valuation Ratios

a. EV/EBITDA

[
\text{EV} = \text{Market Capitalisation} + \text{Net Debt}
]

[
\text{EV/EBITDA} = \frac{\text{EV}}{\text{EBITDA}}
]

Market Capitalisation = Current share price × Shares outstanding.
Net Debt = Total interest‑bearing debt (short‑term + long‑term) – Cash & cash equivalents.

b. P/E (Price‑to‑Earnings)

[
\text{P/E} = \frac{\text{Current share price}}{\text{EPS}}
]

EPS = Net income ÷ Shares outstanding (use the most recent twelve‑month net income for a smoother figure, or the trailing‑12‑month (TTM) net income if you prefer).

3. Compare to Historical Averages

Create a time series of EV/EBITDA and P/E for Itafos over the past 3–5 years (e.g., Q2 2020 – Q2 2025).
Compute the mean (average) and median of each ratio across that period.
Calculate the standard deviation to gauge volatility.
Benchmark the current ratio against these statistics:
- If the current EV/EBITDA is below the historical mean, the stock may be trading at a discount relative to its own past valuation.
- If it’s above the historical mean, the market is pricing the company at a premium (perhaps reflecting growth expectations, improved margins, or sector dynamics).

4. Compare to Peer Group

Company	EV/EBITDA (most recent)	P/E (most recent)
Itafos (ITFS)	[Your calculation]	[Your calculation]
Peer A (e.g., Westlake)	7.2×	12.5×
Peer B (e.g., Husky)	6.8×	11.9×
Peer C (e.g., BASF)	5.9×	9.8×
Peer D (e.g., Orion)	8.1×	13.2×

Populate the table with the actual numbers you retrieve from the same date (or the nearest quarter) for each peer.

Interpretation

Metric	How to read the comparison
EV/EBITDA	A lower EV/EBITDA than peers suggests Itafos is cheaper on a cash‑flow basis, assuming comparable growth and risk profiles. A higher EV/EBITDA may indicate the market expects stronger future cash‑flow growth or superior margins.
P/E	A lower P/E relative to peers points to a more “discounted” earnings price, possibly reflecting lower growth expectations or higher perceived risk. A higher P/E can be justified by higher expected earnings growth, better profit margins, or a stronger competitive position.

5. Contextual Factors to Consider

Factor	Why It Matters
Margin profile (e.g., gross margin, EBITDA margin)	Higher margins can justify a premium EV/EBITDA or P/E.
Growth outlook (organic capacity expansions, new contracts)	Faster earnings or cash‑flow growth can push multiples above historical averages.
Capital‑intensity (CAPEX plans)	Heavy future capex may increase net debt, raising EV and potentially widening EV/EBITDA.
Commodity price exposure (e.g., oil, petrochemical feedstocks)	Volatility in input costs can affect earnings stability and thus multiples.
Geographic exposure (U.S., Canada, Latin America)	Regional demand cycles and currency effects can impact valuation.
Peer valuation cycles	The whole sector may be in a high‑multiple or low‑multiple phase; relative valuation matters as much as absolute numbers.

6. Where to Find the Data Quickly

SEDAR filings – All Canadian public companies file quarterly and annual reports on SEDAR (www.sedarplus.ca). Look for the “Financial Statements” and “Management’s Discussion and Analysis” sections.
Company website – The Q2 2025 results press release mentions that the full financial statements are posted at www.itafos.com.
Financial data platforms – Bloomberg, Refinitiv, FactSet, or even free sites like Yahoo! Finance and Google Finance can provide market cap, debt, cash, and earnings figures for the latest filing date.
Industry reports – Market‑research firms (e.g., IHS Markit, S&P Global) often publish peer‑group valuation tables for specialty chemicals and petrochemicals.

7. Sample Calculation (Illustrative Only)

Assume the following (you will replace with actual numbers):

Item	Value
Current share price	US $12.30
Shares outstanding	45 million
Total debt	US $250 million
Cash & cash equivalents	US $80 million
Net income (TTM)	US $150 million
EBITDA (TTM)	US $300 million

Step‑by‑step:

Market cap = 12.30 × 45 M = US $553.5 M
Net debt = 250 M – 80 M = US $170 M
EV = 553.5 M + 170 M = US $723.5 M
EV/EBITDA = 723.5 M / 300 M = 2.41×
EPS = 150 M / 45 M = US $3.33
P/E = 12.30 / 3.33 = 3.70×

Now compare 2.41× EV/EBITDA and 3.70× P/E to Itafos’ 5‑year historical averages (e.g., 3.8× EV/EBITDA, 7.2× P/E) and to peers (e.g., peers averaging 6.5× EV/EBITDA, 12× P/E). In this illustrative case, Itafos would be trading at a *significant discount** relative to both its own history and its peers, suggesting potential undervaluation—subject to confirming the assumptions and reviewing the qualitative factors above.*

Bottom Line

The Q2 2025 press release does not contain EV/EBITDA, P/E, or comparative valuation data.
To answer your question, you’ll need to pull the latest market price, share count, debt, cash, net income, and EBITDA from the company’s recent filings and a reliable market data source.
Once you have those numbers, compute the ratios, then benchmark them against Itafos’ own historical averages (e.g., 3‑5 year mean) and against a set of comparable specialty‑chemical peers.
Interpret the results in the context of margin trends, growth expectations, capital‑expenditure plans, and sector‑wide valuation cycles.

If you need assistance locating any of the specific filings (e.g., the Q2 2025 Form 10‑Q on SEDAR) or guidance on selecting appropriate peers, feel free to let me know and I can point you to the exact URLs or suggest a shortlist of comparable companies.