The Mosaic Company (MOS)

Conclusion

The Mosaic Company produces concentrated phosphate and potash crop nutrients through its Phosphates, Potash and Mosaic Fertilizantes segments, and sells them to distributors, retail chains and cooperatives. On 2026-11-09 the shares closed at 22.77 USD, giving a market capitalisation of 7.24 billion USD and an enterprise value of 12.88 billion USD.

The verdict is undervalued. The fair value band runs from 29.43 to 44.15 USD with a midpoint of 36.79 USD, a margin of safety of 61.6% at the current price. EV/EBITDA of 9.65x is above its ten-year median of 7.42x, a premium of 30.0%, while price-to-sales of 0.63x and price-to-book of 0.64x sit well below their medians of 1.06x and 1.04x. The DCF value and the reverse DCF implied growth are not available, because free cash flow is negative. Revenue compounded at 6.8% over five years, but EPS compounded at -0.6% over the same period.

What holds the case up is the asset-based pricing: price-to-book of 0.64x and a current ratio of 1.50. What would break it is leverage and returns: net debt to EBITDA of 4.23, interest coverage of 0.73, and ROIC of 0.64% against a WACC of 6.49%. An operating margin of -2.34% against a ten-year median of 7.50% shows the earnings base is currently weak.

Financial health

Financial strength is red, held up by a current ratio of 1.50 and dragged down by net debt to EBITDA of 4.23, interest coverage of 0.73 and an Altman Z-score of 1.71. The quick ratio is 0.38 and debt to equity is 0.52. The Altman Z-score of 1.71 sits in the distress zone; the model was designed for manufacturers, and Mosaic is a manufacturer, so the reading applies. Insolvency risk: low, about 0.3% by the estimate of the Ohlson model over one to two years, based on 2025 year-end figures. Taken together, the balance sheet has limited room to absorb a further fall in earnings.

Earnings quality

Earnings quality is yellow. The Piotroski score of 8 out of 9 and a Beneish M-score of -2.65, which reads as unlikely manipulation, hold it up. Free cash flow conversion of 57.9% over five years and a negative trailing free cash flow after stock-based compensation of -837.5 million USD pull it down. Trailing free cash flow conversion is not available. The accrual ratio is -1.2% and stock-based compensation is 0.25% of revenue. The share count fell at a compound rate of 3.5% over five years, which points to buybacks. Over the last eight quarters the company beat estimates three times and missed five times, with an average surprise of -82.6%. The current-year earnings estimate was cut by 54.0% over 90 days, with eight downward and one upward revision in the last 30 days.

Profitability

Profitability is red, with all four measures assessed as bad. Gross margin is 7.84% against a ten-year median of 14.33%, operating margin is -2.34% against 7.50%, and net margin is -3.82% against 4.69%. ROIC is 0.64% against a WACC of 6.49%, a ROIC minus WACC value of -5.85%, which the model reads as destroying value. The five-year median ROIC is 6.18%. Return on equity is -3.9% on a trailing basis. The 2025 DuPont split shows a net margin of 4.49%, asset turnover of 0.49 and an equity multiplier of 2.03, so leverage is part of the return profile. Margins are below their medians, and returns are below the cost of capital.

Growth

Growth is yellow. Revenue growth over five years is neutral, and EPS growth is assessed bad, though the next-year EPS estimate is assessed good. Revenue compound growth is -14.3% over three years, 6.8% over five years and 3.1% over ten years. EPS compound growth is -44.8% over three years, -0.6% over five years and -4.8% over ten years. Revenue grew in five of the ten comparable years. The next-year growth estimate is 339.5%, but the next-year estimate was cut by 16.4% over the last 90 days, so that figure rests on a recovery that analysts have been lowering.

Valuation

Valuation is green, based on a verdict of undervalued and a margin of safety of 61.6%. Against their ten-year medians, EV/EBITDA is 9.65x versus 7.42x, a premium of 30.0%; price-to-sales is 0.63x versus 1.06x, a premium of -40.7%; and price-to-book is 0.64x versus 1.04x, a premium of -38.1%. Price-to-free-cash-flow and price-to-earnings are not meaningful at present, with an earnings yield of -6.1%. The fair value from historical multiples is 36.79 USD. The DCF value is not available, because free cash flow is negative, though the discount rate is 9.18% and the long-term growth rate is 2.5%. The fair value band is an order-of-magnitude estimate built on fixed assumptions, not a price target. The dividend yield is 3.88% and the forward yield is 3.94%, but free cash flow is negative, so the dividend is not covered by free cash flow.

Risks

The weakest numbers point to a fragile balance sheet. Net debt to EBITDA of 4.23 means a further fall in earnings would raise leverage, and interest coverage of 0.73 means current earnings do not cover interest. Negative free cash flow and an operating margin of -2.34% keep ROIC below WACC, so value destruction continues while margins stay below their medians. Downward estimate revisions reduce confidence in a recovery. Values not available include the DCF value, the reverse DCF implied growth and trailing free cash flow conversion. This analysis has limits: there is no debt maturity schedule and no revenue by segment, so the Phosphates, Potash and Mosaic Fertilizantes businesses cannot be compared.