Mosaic's 15.6x Forward PE Prices a Recovery FCF Denies
Mosaic trades at 15.6x forward PE despite trailing losses and negative $746 million free cash flow, a valuation premised entirely on a nutrient pricing recovery. Three consecutive EPS misses, the most
Mosaic's 15.6x Forward PE Prices a Recovery FCF Denies
NEW YORK, September 21 —
The Mosaic Company (MOS) trades at 15.6x forward earnings while trailing EPS sits at negative $2.02, a gap that makes the valuation itself the thesis. Three consecutive misses, including a -77.1% miss two quarters ago, and free cash flow of negative $746 million have not persuaded the market to price in doubt.
- Trailing EPS negative $2.02; forward P/E 15.6x; stock at $24.48 vs. $26.77 analyst consensus target.
- Free cash flow negative $746 million; gross margin 11.2%; total debt $6.08 billion vs. $290 million cash.
- Three consecutive EPS misses; short interest 12.1% of float; SVP sold $508,760 in open-market August sale.
What That Multiple Is Actually Buying
The Mosaic Company makes the crop nutrients that underpin modern agriculture: diammonium phosphate (DAP), monoammonium phosphate (MAP), and MicroEssentials from its Phosphates segment, and K-Mag from Potash, distributed to cooperatives and wholesalers across more than 15 countries including Brazil, Canada, and India. In the trailing twelve months, that franchise produced 11.2% gross margins on $12.25 billion in revenue, down 6.0% year over year. The forward multiple requires a specific recovery thesis: phosphate and potash pricing must rebound enough to expand margins materially, a scenario worth stress-testing in a DCF calculator rather than pricing on the assumption that the rebound is already locked in.
Six Filings in August, One Open-Market Sale
Between August 10 and August 28, Mosaic filed two 424B5 prospectus supplements and four 8-K reports related to debt financing, capped by an August 28 debt redemption with make-whole provision. An August 17 8-K disclosed creation of a material direct financial obligation under Item 2.03. During that same window, SVP and Chief Administrative Officer Walter F. Precourt III sold 23,000 shares at $22.12 for proceeds of $508,760. The stock has since risen $2.36 above his exit price. Insider ownership is 0.3% of shares outstanding; zero purchases over the trailing 90 days makes that single sale the full story of insider conviction.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| MOS | $7.8B | 15.6x | -26.8% |
| CF | $19.3B | 11.9x | +49.1% |
| NTR | $36.8B | 15.6x | +35.2% |
| IPI | $504M | 26.5x | +31.0% |
| BG | $22.2B | 10.2x | +49.8% |
| FCX | $102.7B | 17.3x | +58.4% |
The Miss That Would Break the Thesis
Three consecutive misses, the deepest a -77.1% gap two quarters ago, have reset the expectation bar, but the buffer behind them has not widened: total debt stands at $6.08 billion against $290 million in cash. The forward multiple holds only if nutrient pricing recovery lifts gross margins materially from their current trajectory; a fourth consecutive miss would invalidate the forward earnings estimate underpinning the entire valuation. Short interest at 12.1% reflects that risk already. The specific checkpoint is next quarter's EPS print: any result above consensus for the first time in four quarters shifts the recovery story from assumption to evidence. Run the free The Mosaic Company deep-dive →
Basis Report is independent research for informational purposes. It is not investment advice and not a recommendation to buy or sell any security.
Frequently Asked Questions
Why does Mosaic trade at 15.6x PE despite losses?
Mosaic's valuation is built entirely on an assumption that phosphate and potash prices will recover enough to expand margins. The company's trailing EPS is negative at $2.02 per share and free cash flow is negative at $746 million, so the entire 15.6x multiple depends on this recovery thesis becoming reality.
What are Mosaic's recent earnings results?
Mosaic has recorded three consecutive EPS misses, with the deepest being a 77.1% shortfall two quarters ago. Trailing EPS stands at negative $2.02 per share, though consensus forecasts are priced at a 15.6x multiple assuming the streak will reverse.
Does Mosaic generate positive cash flow?
No. Mosaic generated negative free cash flow of $746 million in the trailing twelve months. The company holds $6.08 billion in total debt versus $290 million in cash.
What does Mosaic do?
Mosaic produces crop nutrients including diammonium phosphate (DAP), monoammonium phosphate (MAP), and MicroEssentials from its Phosphates segment, and K-Mag from its Potash segment. The company distributes these products to cooperatives and wholesalers across more than 15 countries including Brazil, Canada, and India.
Are insiders buying or selling Mosaic stock?
Insiders have not been buying. SVP and Chief Administrative Officer Walter F. Precourt III sold 23,000 shares at $22.12 in August for $508,760, and insider ownership stands at just 0.3% with zero purchases in the past 90 days.
Mosaic trades at a 15.6x forward P/E multiple while trailing EPS stands at negative $2.02 and free cash flow runs at negative $746 million. Three consecutive earnings misses and gross margins compressed to 11.2% have not deterred the market from pricing a recovery the company's own numbers have yet to confirm.