Now Is Not The Time To Buy Tronox Stock

Tronox (NYSE:TROX) stock looks unattractive – making it a bad pick to buy at its current price of around $5.70. We believe there are several major concerns with TROX stock, which makes it unattractive despite its current valuation being very low.

We arrive at our conclusion by comparing the current valuation of TROX stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Tronox along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a very weak operating performance and financial condition, as detailed below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

How Does Tronox’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, TROX stock looks cheap compared to the broader market.

• Tronox has a price-to-sales (P/S) ratio of 0.3 vs. a figure of 3.0 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 2.7 compared to 20.5 for S&P 500

How Have Tronox’s Revenues Grown Over Recent Years?

Tronox’s Revenues have seen a decline over recent years.

• Tronox has seen its top line decline at an average rate of 5.6% over the last 3 years (vs. increase of 5.5% for S&P 500)
• Its revenues have grown 4.2% from $2.9 Bil to $3.1 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
• Also, its quarterly revenues decreased 4.7% to $676 Mil in the most recent quarter from $686 Mil a year ago (vs. 4.8% improvement for S&P 500)

How Profitable Is Tronox?

Tronox’s profit margins are much worse than most companies in the Trefis coverage universe.

• Tronox’s Operating Income over the last four quarters was $203 Mil, which represents a poor Operating Margin of 6.7% (vs. 13.2% for S&P 500)
• TROX Operating Cash Flow (OCF) over this period was $297 Mil, pointing to a poor OCF Margin of 9.8% (vs. 14.9% for S&P 500)
• For the last four-quarter period, TROX Net Income was $-150 Mil – indicating a very poor Net Income Margin of -4.9% (vs. 11.6% for S&P 500)

Does Tronox Look Financially Stable?

Tronox’s balance sheet looks very weak.

• Tronox’s Debt figure was $3.1 Bil at the end of the most recent quarter, while its market capitalization is $898 Mil (as of 5/30/2025). This implies a very poor Debt-to-Equity Ratio of 384.7% (vs. 19.9% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $138 Mil of the $6.1 Bil in Total Assets for Tronox.  This yields a poor Cash-to-Assets Ratio of 2.3% (vs. 13.8% for S&P 500)

How Resilient Is TROX Stock During A Downturn?

TROX stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Inflation Shock (2022)

• TROX stock fell 61.2% from a high of $26.24 on 25 October 2021 to $10.19 on 27 October 2023, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $20.29 on 3 June 2024 and currently trades at around $5.70

Covid Pandemic (2020)

• TROX stock fell 66.7% from a high of $12.11 on 14 January 2020 to $4.03 on 1 April 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 23 November 2020

Putting All The Pieces Together: What It Means For TROX Stock

In summary, Tronox’s performance across the parameters detailed above are as follows:

• Growth: Weak
• Profitability: Very Weak
• Financial Stability: Extremely Weak
• Downturn Resilience: Extremely Weak
• Overall: Very Weak

Hence, despite its very low valuation, we think that the stock is unattractive, which supports our conclusion that TROX is a bad stock to buy.

While you would do well to avoid TROX stock for now, you could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

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