NRC: Hold + Reduce
Published 23 Sep 2026, 00:56 BST. This is the frozen version, not the current recommendation.
Why this assessment was issued
First recorded assessment.
The central target is 24.1% below the price. The decline falls short of the 25% Sell requirement.
Supporting evidence
More cash remains for each dollar of profit
Cash after capital spending / profit: 3.7× for NRC, against 2.6× across 4 comparable peers.
Compare the stock with its market
Over one year, the stock changed +38.9% against +14.8% for US stocks (SPY). The gap is +24.2 percentage points. These are price returns, before dividends.
Opposing evidence
The latest quarter was loss-making
Net income was -3.3m, compared with -0.1m in the same quarter last year. Amounts are in USD.
The profit margin narrowed
The latest quarterly operating margin was -9.1%, -13.8 percentage points from a year earlier. Compare the sales and margin contributions below.
The original scenarios
| Scenario | Sales growth | Profit margin | Model value |
|---|---|---|---|
| Weaker | -4.8% | 22.7% | $10.04 |
| Central | 0.2% | 25.8% | $15.62 |
| Stronger | 5.2% | 28.8% | $23.04 |
Method: Cash flow across the cycle. Loss periods, gaps or differences in the earnings basis make P/E less useful here. This assessment uses operating profit, capital spending and the balance sheet instead. Loss years remain in the margin history. The earnings method could not pass its required checks; the cash-flow method passed its own input checks. These scenarios are not probability intervals.
Original assumptions and checks
| tax | 25 |
|---|---|
| price | 20.56 |
| years | 1.2320328542094456 |
| claims | 0.0 |
| growth | 0.17537260077467032 |
| margin | 10.527368443609506 |
| profit | 5857000.0 |
| shares | 22139315.0 |
| cash_ok | True |
| debt_ok | True |
| growths | [-3.3808872386163813, -4.638812117270907, 3.731632440165722, 3.977907045067286] |
| revenue | 139997000.0 |
| discount | 7.962068144360023 |
| downside | 51.16383512200138 |
| interest | 5405000.0 |
| leverage | 1.9389212943341012 |
| net_debt | 86701000.0 |
| terminal | 2 |
| free_cash | 21641000.0 |
| ppe_ratio | 0.2821274741601606 |
| buy_hurdle | 34.12410926312197 |
| extra_debt | 0 |
| volatility | 58.248218526243946 |
| basis_notes | [] |
| capex_ratio | 0.05620120431152096 |
| cash_profit | 5857000.0 |
| share_ratio | Not available |
| annual_years | 5 |
| capital_cost | {'tax': 25.0, 'beta': 0.5683468802115199, 'debt': 90028000.0, 'beta_end': '2026-09-18', 'discount': 7.962068144360023, 'debt_cost': 6.51, 'risk_free': 5.01, 'beta_start': '2023-09-29', 'beta_weeks': 156, 'source_url': 'https://home.treasury.gov/resource-center/data-chart-center/interest-rates', 'debt_weight': 16.51246629834938, 'equity_cost': 8.571156267371732, 'equity_value': 455184316.4, 'adjusted_beta': 0.7122312534743466, 'credit_spread': 1.5, 'equity_premium': 5.0, 'risk_free_date': '2026-09-18', 'observed_interest': 6.003687741591505} |
| depreciation | 6.164417808953049 |
| normal_capex | 7.14062622227183 |
| tax_measured | False |
| current_capex | 5.620120431152096 |
| working_ratio | 0.0 |
| financial_date | 2026-06-30 |
| interest_cover | 6.676429376318913 |
| operating_cash | 29509000.0 |
| terminal_share | 80.40523270419395 |
| reporting_basis | quarterly |
| uncapped_growth | 0.17537260077467032 |
| projected_margin | 25.77633862083025 |
| capital_inventory | {'date': '2026-06-30', 'values': {'physical_ppe': 39497000.0, 'total_assets': 136152000.0, 'total_equity': 6549000.0, 'cash_and_equivalents': 3327000.0, 'total_current_assets': 22806000.0, 'financial_debt_current': 4016000.0, 'financial_debt_noncurrent': 86012000.0, 'total_current_liabilities': 35019000.0, 'net_deferred_tax_liability': 5999000.0}, 'version': 'capital-scope-3', 'currency': 'USD', 'evidence': {'physical_ppe': [{'end': '2026-06-30', 'tag': 'PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization', 'unit': 'USD', 'filed': '2026-08-04', 'value': 39497000.0, 'accession': '0001437749-26-025624', 'source_url': 'https://www.sec.gov/Archives/edgar/data/70487/000143774926025624/0001437749-26-025624-index.html'}], 'total_assets': [{'end': '2026-06-30', 'tag': 'Assets', 'date': '2026-06-30', 'unit': 'USD', 'field': 'total_assets', 'filed': '2026-08-04', 'scope': 'consolidated statement', 'start': None, 'value': 136152000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/70487/000143774926025624/nrc20260630_10q.htm', 'statement_table': 24, 'statement_verified': True}], 'total_equity': [{'end': '2026-06-30', 'tag': 'StockholdersEquity', 'date': '2026-06-30', 'unit': 'USD', 'field': 'total_equity', 'filed': '2026-08-04', 'scope': 'consolidated statement', 'start': None, 'value': 6549000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/70487/000143774926025624/nrc20260630_10q.htm', 'statement_table': 24, 'statement_verified': True}], 'cash_and_equivalents': [{'end': '2026-06-30', 'tag': 'CashAndCashEquivalentsAtCarryingValue', 'date': '2026-06-30', 'unit': 'USD', 'field': 'cash_and_equivalents', 'filed': '2026-08-04', 'scope': 'consolidated statement', 'start': None, 'value': 3327000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/70487/000143774926025624/nrc20260630_10q.htm', 'statement_table': 24, 'statement_verified': True}], 'total_current_assets': [{'end': '2026-06-30', 'tag': 'AssetsCurrent', 'date': '2026-06-30', 'unit': 'USD', 'field': 'total_current_assets', 'filed': '2026-08-04', 'scope': 'consolidated statement', 'start': None, 'value': 22806000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/70487/000143774926025624/nrc20260630_10q.htm', 'statement_table': 24, 'statement_verified': True}, {'end': '2026-06-30', 'unit': 'USD', 'value': 22806000.0, 'financial_period_id': 6038775}], 'financial_debt_current': [{'end': '2026-06-30', 'tag': 'LongTermDebtCurrent', 'unit': 'USD', 'filed': '2026-08-04', 'value': 4016000.0, 'accession': '0001437749-26-025624', 'source_url': 'https://www.sec.gov/Archives/edgar/data/70487/000143774926025624/0001437749-26-025624-index.html'}], 'financial_debt_noncurrent': [{'end': '2026-06-30', 'tag': 'LongTermDebtNoncurrent', 'unit': 'USD', 'filed': '2026-08-04', 'value': 86012000.0, 'accession': '0001437749-26-025624', 'source_url': 'https://www.sec.gov/Archives/edgar/data/70487/000143774926025624/0001437749-26-025624-index.html'}], 'total_current_liabilities': [{'end': '2026-06-30', 'tag': 'LiabilitiesCurrent', 'date': '2026-06-30', 'unit': 'USD', 'field': 'total_current_liabilities', 'filed': '2026-08-04', 'scope': 'consolidated statement', 'start': None, 'value': 35019000.0, 'source_url': 'https://www.sec.gov/Archives/edgar/data/70487/000143774926025624/nrc20260630_10q.htm', 'statement_table': 24, 'statement_verified': True}, {'end': '2026-06-30', 'unit': 'USD', 'value': 35019000.0, 'financial_period_id': 6038775}], 'net_deferred_tax_liability': [{'end': '2026-06-30', 'tag': 'DeferredIncomeTaxLiabilitiesNet', 'unit': 'USD', 'filed': '2026-08-04', 'value': 5999000.0, 'accession': '0001437749-26-025624', 'source_url': 'https://www.sec.gov/Archives/edgar/data/70487/000143774926025624/0001437749-26-025624-index.html'}]}, 'conflicts': []} |
| cash_profit_basis | Reported net profit |
| historical_margin | 25.77633862083025 |
| year5_value_share | 80.40523270419395 |
| depreciation_ratio | 0.06164417808953049 |
| net_debt_at_target | 86701000.0 |
| non_operating_assets | 0 |
| non_operating_profit_material | False |
Recent price · Passed. Weekly close dated 2026-09-18.
Current financials · Passed. Statements through 2026-06-30; factor prices dated 2026-09-18.
Price risk · Passed. Risk uses the latest 52 weekly price changes.
Operating history · Passed. 5 annual results, retaining operating losses and unusually strong years.
Quarterly operating results · Passed. Four quarters through 2026-06-30.
Cash-flow and ownership inputs · Passed. Capital spending, depreciation estimate, operating capital, debt, cash and other ownership claims are recorded.
Depreciation basis · Passed. Four matching quarters of operating income and reported depreciation are required. An unrelated EBITDA-minus-EBIT difference is not treated as depreciation.
Matching currency · Passed. USD statements and share price.
Operating totals · Passed. Quarterly sales and operating profit agree with the trailing snapshot within 5%.
Operating discount rate · Passed. The operating cash-flow discount rate needs a current USD Treasury rate, at least two years of matching market returns, and dated debt and share inputs. An equity return hurdle is not used as the company's funding cost.
Continuing growth and funding cost · Passed. The funding cost must exceed continuing growth in every valuation scenario.
Scenario consistency · Passed. The weaker, central and stronger assumptions must give an ordered range. When growth costs more capital than it earns, a tailored operating review is required before publishing a target.
Target publication review · Passed. The model estimate is within SM's automatic publication range of one quarter to four times the current price. This is a review threshold, not evidence that the market price is correct.
Cash-flow value dependence · Passed. Cash flows beyond year five account for 80.4% of the absolute present value. This is within SM's 90% automatic publication limit.
Investment assets and operating capital · Passed. No material unvalued investment balance was identified in the available capital inventory. This does not establish that every asset has been independently appraised.
Policy sm-review-2-research · Model sm-assessment-14-operating-capital · Data 06b98160f77b.