Methanex Corporation Common Stock (MEOH)

FairStock Score: 25/100 — RISKY

Key Financials

Strengths

• Generates $450 million in annual free cash flow (9.7% yield on market cap)

Concerns

• Trades significantly above Graham Number ($26) with negative 133% margin of safety—limited downside protection
• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Altman Z-Score of 1.2 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Methanex Corporation Common Stock is a small-cap basic materials company valued at $4.6 billion. Revenue stands at $3.6 billion, though the company is currently unprofitable. From a quality standpoint, Methanex shows distressed Altman Z-Score of 1.2 warrants caution and modest 6% ROE. On valuation, the stock is commanding a steep 64.9x multiple, with trades far above its Graham Number ($26) with no margin of safety. Growth dynamics show revenue growing at 2.1% and profit growth of -296.9%. The 1.2% dividend yield adds an income component for patient holders. Our composite FairStock Score of 25/100 reflects below-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $450 million in annual free cash flow (9.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 65x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer