Frontline Ltd. Fundamental Analysis
Frontline Ltd. (FRO) shows strong financial fundamentals with a PE ratio of 8.64, profit margin of 40.19%, and ROE of 36.04%. The company generates $2.3B in annual revenue with weak year-over-year growth of -4.16%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 55.6/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze FRO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentFRO demonstrates superior asset utilization.
Valuation Score
ExcellentFRO trades at attractive valuation levels.
Growth Score
WeakFRO faces weak or negative growth trends.
Financial Health Score
ExcellentFRO maintains a strong and stable balance sheet.
Profitability Score
ExcellentFRO achieves industry-leading margins.
Key Financial Metrics
Is FRO Expensive or Cheap?
P/E Ratio
FRO trades at 8.64 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, FRO's PEG of 0.05 indicates potential undervaluation.
Price to Book
The market values Frontline Ltd. at 2.75 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 4.66 times EBITDA. This is generally considered low.
How Well Does FRO Make Money?
Net Profit Margin
For every $100 in sales, Frontline Ltd. keeps $40.19 as profit after all expenses.
Operating Margin
Core operations generate 38.89 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $36.04 in profit for every $100 of shareholder equity.
ROA
Frontline Ltd. generates $15.97 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Frontline Ltd. generates strong operating cash flow of $927.03M, reflecting robust business health.
Free Cash Flow
Frontline Ltd. generates strong free cash flow of $591.92M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.66 in free cash annually.
FCF Yield
FRO converts 7.54% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.64
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.05
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.75
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.47
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.93
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.03
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.36
vs 25 benchmark
ROA
Return on assets percentage
0.16
vs 25 benchmark
ROCE
Return on capital employed
0.17
vs 25 benchmark
How FRO Stacks Against Its Sector Peers
| Metric | FRO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.64 | 21.16 | Better (Cheaper) |
| ROE | 36.04% | 984.00% | Weak |
| Net Margin | 40.19% | -59500.00% (disorted) | Strong |
| Debt/Equity | 0.93 | -0.48 (disorted) | Distorted |
| Current Ratio | 2.03 | 4.98 | Strong Liquidity |
| ROA | 15.97% | -11018321.00% (disorted) | Strong |
FRO outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Frontline Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
41.41%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
-19.31%
Industry Style: Cyclical, Value, Commodity
DecliningFCF CAGR
-0.72%
Industry Style: Cyclical, Value, Commodity
Declining