Andean Precious Metals (APM) AI Stock Analysis

• Market Cap: C$267.11M
• Dividend Yield: N/A
• Average Volume (3M): 161.54K
• Price to Earnings (P/E): 10.2
• Beta (1Y): 1.69
• Revenue Growth: 127.44%
• EPS Growth: N/A
• Country: CA
• Employees: N/A
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Mining
• EPS (TTM): 0.17
• Shares Outstanding: 149,221,300
• 10 Day Avg. Volume: 236,142
• 30 Day Avg. Volume: 161,537
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.68
• Price to Cash Flow (P/CF): 1.70
• P/FCF Ratio: 1.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$2.75
• Price Target Upside: 54.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Andean Precious Metals' overall stock score is driven by strong financial performance and robust earnings call highlights. The company's valuation is attractive, with a low P/E ratio indicating potential undervaluation. Despite some operational challenges and mixed short-term technical indicators, the positive financial outlook and strategic initiatives contribute to a solid stock score.

Positive Factors

Financial Performance

Andean reported strong Q4 financial and operating results from both of its assets with Golden Queen producing 11.8Koz AuEq and San Bartolome producing 1.4Moz AgEq.

Profitability

The highlight from the quarter was the increased profitability at San Bartolome which posted $14.4M in operating income.

Valuation

APM stock trades at only 2.6x 2025E EBITDA with a long-term track record of growth and successful acquisitions.

Negative Factors

Production

Production was lower than expected but APM stated it remains on track to achieve its 2025 guidance, noting that Q1 is typically its weakest quarter.

Production Estimates

Q1 AuEq produced came in at 11,189oz (-3% YoY) consisting of 10,309oz Au and 79Koz Ag, which came in below our estimate of 14,642oz AuEq produced.

Andean Precious Metals Business Overview & Revenue Model

Company Description

Andean Precious Metals (APM) is a mining company focused on the exploration, extraction, and production of precious metals, primarily silver and gold. The company operates in the mining sector, with its core products including silver and gold bullion, which are sold to various markets globally. APM is committed to sustainable and responsible mining practices, aiming to minimize environmental impact and promote community engagement in the regions where it operates.

How the Company Makes Money

Andean Precious Metals makes money through the sale of precious metals extracted from its mining operations. The company's primary revenue streams include the sale of silver and gold that are refined and sold to market participants such as jewelers, manufacturers, and investors. APM's earnings are significantly influenced by global commodity prices for silver and gold, which fluctuate based on market demand and supply dynamics. Additionally, the company may engage in strategic partnerships with other mining entities and financial institutions to optimize its production processes and financial performance. APM focuses on maintaining cost-effective mining operations to enhance its profitability and shareholder value.

Andean Precious Metals Financial Statement Overview

Summary

Andean Precious Metals shows strong revenue growth and profitability, supported by improved margins and a stable balance sheet. The company has substantial cash reserves, but rising debt levels require careful management to ensure long-term sustainability. The income statement, balance sheet, and cash flow are robust, indicating a strong financial position.

Income Statement

The income statement shows significant improvement in revenue and profitability. The TTM revenue increased by 83.5% compared to the previous year, indicating strong growth. The gross profit margin improved to 19.23%, while the net profit margin rose to 24.16%, showing enhanced efficiency and profitability. Strong EBITDA and EBIT margins of 21.52% and 9.55% respectively demonstrate robust operational performance. However, the EBIT margin is relatively lower compared to other margins, indicating room for operational cost efficiency.

Balance Sheet

The balance sheet is stable with a debt-to-equity ratio of 0.49, indicating manageable leverage. The equity ratio of 45.84% shows a strong capital structure. Return on Equity (ROE) is impressive at 38.17%, reflecting high profitability relative to equity. The company's liquidity position is strong with substantial cash reserves, but a higher debt level compared to previous years could pose potential risk if not managed carefully.

Cash Flow

Cash flow from operations is robust at $36.87 million, translating to a healthy operating cash flow to net income ratio of 0.66. Free cash flow has turned positive, showing a growth rate of over 1000% from the previous negative position, indicating improved cash efficiency. However, the free cash flow to net income ratio is relatively moderate at 0.33, suggesting room for further improvement in cash generation relative to profits.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
230.02M	125.32M	108.05M	144.21M	130.67M	88.66M
	Gross Profit
44.24M	27.01M	9.70M	38.81M	37.62M	18.77M
	EBIT
21.98M	22.00K	-10.22M	20.19M	29.71M	-10.54M
	EBITDA
49.50M	48.77M	-2.68M	30.72M	39.95M	4.63M
	Net Income Common Stockholders
55.59M	38.54M	-10.09M	4.27M	45.96M	-12.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
71.35M	70.07M	86.07M	91.45M	41.02M	14.11M
	Total Assets
278.31M	269.89M	133.86M	140.29M	115.78M	100.84M
	Total Debt
59.92M	47.46M	0.00	0.00	10.00K	42.49M
	Net Debt
18.43M	-17.45M	-80.73M	-87.28M	-38.53M	28.43M
	Total Liabilities
149.90M	137.92M	39.43M	37.73M	41.54M	72.98M
	Stockholders Equity
128.40M	131.97M	94.43M	102.56M	74.24M	27.86M
Cash Flow		Free Cash Flow
18.36M	-1.85M	-4.94M	30.23M	35.26M	7.52M
	Operating Cash Flow
36.87M	4.17M	-2.74M	33.62M	37.44M	11.08M
	Investing Cash Flow
-59.25M	-15.02M	-3.72M	-3.91M	30.24M	-36.81M
	Financing Cash Flow
1.66M	-9.32M	724.00K	19.40M	-43.99M	25.08M

Andean Precious Metals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.78
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:APM, the sentiment is Positive. The current price of 1.78 is above the 20-day moving average (MA) of 1.62, above the 50-day MA of 1.60, and above the 200-day MA of 1.37, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 63.10 is Neutral, neither overbought nor oversold. The STOCH value of 95.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:APM.

Andean Precious Metals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
APM	79 Outperform	C$267.11M	10.19	13.46%	―	127.44%	―
SIL	76 Outperform	$2.18B	18.49	18.48%	―	25.05%	0.44%
FVI	76 Outperform	$2.78B	15.92	9.74%	―	28.18%	―
SSRM	64 Neutral	$3.05B	―	-8.06%	0.76%	-29.09%	-157.10%
MAG	54 Neutral	$2.28B	21.30	14.17%	―	―	61.66%
EDR	54 Neutral	$1.48B	―	-7.23%	―	6.18%	-515.57%
Sector *	47 Neutral	$2.53B	-3.19	-22.23%	3.49%	4.01%	-27.90%

Andean Precious Metals Corporate Events

Andean Precious Metals Releases Phase 2 Drilling Results and Announces Management Changes

Andean Precious Metals has reported initial results from its Phase 2 exploration drilling program at the Golden Queen mine, highlighting significant intersections of gold and silver. The drilling program aims to extend the mine’s life by adding to its mineral resources and reserves. Additionally, the company announced a management change with Sylvain Lessard stepping down as General Manager, and the interim supervision by COO Marcos Holanda.

Andean Precious Metals Secures Oxide Material from Bolivian Trapiche Concession

Andean Precious Metals has signed an exclusive agreement to purchase up to 100,000 tonnes of oxide material from the Trapiche Concession in Bolivia. This strategic agreement allows the company to enhance its raw material supply for its operations, potentially strengthening its market position in the region by leveraging the undeveloped silver and base metal deposits of the Trapiche Concession.

Andean Precious Metals Initiates Automatic Share Purchase Plan

Andean Precious Metals has established an automatic share purchase plan (ASPP) with Desjardins Securities Inc. to facilitate the repurchase of common shares under its normal course issuer bid (NCIB). This plan allows for share repurchases during blackout periods, adhering to TSX rules and Canadian securities laws, and aims to enhance shareholder value. The ASPP’s initiation reflects Andean’s strategic approach to capital management and market positioning, potentially impacting shareholder confidence and market perception.

Andean Precious Metals to Uplist on Toronto Stock Exchange

Andean Precious Metals has received approval from the Toronto Stock Exchange for uplisting its common shares, which will start trading under the ticker symbol APM on January 9, 2025. This transition is a significant step in the company’s growth strategy, enhancing visibility, liquidity, and access to a broader base of institutional investors, marking a milestone in its strategy to increase market presence and investor engagement.

Andean Precious Metals Renews Share Buyback Program

Andean Precious Metals has renewed its normal course issuer bid program, aiming to repurchase up to 5% of its outstanding shares to reflect the company’s underlying value. The purchases will be made on the open market, and the company believes this repurchase strategy is an effective use of corporate funds.

Andean Precious Metals Disputes Contract Termination

Andean Precious Metals is contesting allegations of a contract default by Silver Elephant, which it claims wrongfully terminated their agreement. The company is working with legal counsel and securing alternative supplies to maintain operations. Andean remains focused on growth in the Americas with its current projects in Bolivia and California.

Andean Precious Metals’ Strong Q3 2024 Financial Results

Andean Precious Metals reported a strong third quarter in 2024 with consolidated revenue of $68.4 million and a record $98.1 million in cash and investments. The company’s financial health was bolstered by free cash flow of $17 million and an operating cash flow of $23.4 million, driven by high gold and silver prices and reduced operating costs.