Sierra Metals (SMT) AI Stock Analysis

• Market Cap: C$188.98M
• Dividend Yield: N/A
• Average Volume (3M): 290.04K
• Price to Earnings (P/E): 8.1
• Beta (1Y): 0.12
• Revenue Growth: 17.12%
• EPS Growth: N/A
• Country: CA
• Employees: 1,170
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): 0.11
• Shares Outstanding: 212,339,250
• 10 Day Avg. Volume: 486,215
• 30 Day Avg. Volume: 290,038
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.47
• Price to Cash Flow (P/CF): 1.80
• P/FCF Ratio: 1.60
• 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$1.10
• Price Target Upside: 23.76% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

Sierra Metals' overall score reflects its strong financial performance, particularly in profitability and operational efficiency, tempered by historical volatility and high leverage. Technical indicators suggest a positive trend, while valuation metrics indicate the stock is undervalued, providing potential upside. Despite uncertainties from a takeover bid, strategic advancements and positive earnings outcomes support a favorable outlook.

Sierra Metals Business Overview & Revenue Model

Company Description

Sierra Metals Inc., together with its subsidiaries, focuses on the production, exploration, and development of precious and base metals in Peru and Mexico. It primarily focuses on exploration of silver, copper, lead, zinc, and gold deposits. The company's flagship property is the 81.84% owned polymetallic Yauricocha Mine covering an area of 18,778 hectares located in the Yauyos province in Peru. It also holds 100% interest in the Bolivar mine, comprising of 12 mining concessions covering an area 15,217 hectares; and Cusi Mines that comprises of 73 concessions covering 11,977 hectares in Mexico. The company was formerly known as Dia Bras Exploration Inc. and changed its name to Sierra Metals Inc. in December 2012. Sierra Metals Inc. was incorporated in 1996 and is headquartered in Toronto, Canada.

How the Company Makes Money

Sierra Metals generates revenue through the extraction and sale of mined metals such as copper, zinc, lead, silver, and gold. The company's primary revenue streams include the sale of these commodities to various customers and partners in the metals market. Sierra Metals' earnings are significantly influenced by the global demand and pricing of these metals. Additionally, the company may engage in strategic partnerships and joint ventures to enhance its mining operations and expand its market reach, contributing to its revenue generation.

Sierra Metals Financial Statement Overview

Summary

Sierra Metals has demonstrated significant financial improvements, especially in profitability and operational efficiency. The positive trends in revenue and profit margins are encouraging, although historical volatility in earnings and cash flow highlights the need for cautious financial management. The balance sheet remains stable, but high leverage and asset declines pose potential risks. Ensuring steady cash flow and managing debt levels will be crucial for sustained growth.

Income Statement

Sierra Metals has shown a notable recovery from previous years, with revenue growing by 18.76% from 2023 to 2024. The gross profit margin improved to 24.09% in 2024, indicating better cost management. The net profit margin turned positive at 5.79% after a negative margin in 2023, showing significant improvement in profitability. The EBIT and EBITDA margins also improved to 8.71% and 19.94%, respectively, reflecting operational efficiency. However, the company experienced fluctuations in profitability over the years, highlighting potential volatility.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.95, indicating a balanced approach to leveraging. The equity ratio at 28.01% in 2024 reflects a stable capital structure. Return on Equity (ROE) improved significantly to 15.60% in 2024, signaling enhanced shareholder returns. Nonetheless, the decline in total assets over the years and relatively high debt levels could pose financial risks if not managed carefully.

Cash Flow

Sierra Metals improved its free cash flow to $5.5 million in 2024, a growth of -11.18% from 2023, despite fluctuations in operating cash flow. The operating cash flow to net income ratio is strong at 4.13, which is a positive indicator of cash generation relative to net income. However, capex remains high relative to cash generation, potentially limiting future liquidity. The company needs to ensure consistent cash flow to sustain operations and growth.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
272.63M	229.54M	192.12M	272.01M	246.89M
	Gross Profit
65.70M	51.84M	5.47M	81.22M	81.58M
	EBIT
23.74M	13.66M	-75.82M	40.91M	51.12M
	EBITDA
54.37M	48.02M	3.32M	86.98M	91.39M
	Net Income Common Stockholders
15.78M	-19.33M	-87.50M	-22.11M	23.42M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
19.83M	9.12M	5.07M	34.93M	71.47M
	Total Assets
361.01M	314.12M	310.44M	396.82M	439.59M
	Total Debt
95.74M	86.01M	89.01M	83.44M	100.46M
	Net Debt
75.91M	76.89M	83.93M	48.51M	28.99M
	Total Liabilities
226.56M	204.26M	194.25M	192.19M	199.38M
	Stockholders Equity
101.13M	75.26M	81.61M	169.25M	201.00M
Cash Flow		Free Cash Flow
5.50M	6.19M	-30.99M	473.00K	31.01M
	Operating Cash Flow
65.15M	50.19M	7.26M	72.25M	66.98M
	Investing Cash Flow
-57.02M	-43.99M	-38.26M	-71.77M	-34.25M
	Financing Cash Flow
2.65M	-2.23M	1.12M	-36.89M	-4.07M

Sierra Metals Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SMT, the sentiment is Positive. The current price of 0.89 is above the 20-day moving average (MA) of 0.84, above the 50-day MA of 0.83, and above the 200-day MA of 0.79, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 53.72 is Neutral, neither overbought nor oversold. The STOCH value of 22.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SMT.

Sierra Metals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMT	71 Outperform	C$188.98M	8.10	21.30%	―	17.12%	―
TLO	52 Neutral	C$88.80M	―	-0.96%	―	―	7.41%
Sector *	47 Neutral	$2.49B	-2.97	-22.82%	3.51%	4.13%	-28.53%

Sierra Metals Corporate Events

Sierra Metals Urges Shareholders to Reject Amended Hostile Bid

Sierra Metals has reiterated its recommendation for shareholders to reject Alpayana’s amended hostile takeover bid, which has increased the offer price from C$0.85 to C$1.11 per share. The board of directors believes the revised offer still undervalues the company, citing strong financial performance and potential for greater value in its assets. The company has addressed Alpayana’s claims regarding its financial guidance and potential financing, emphasizing its improved balance sheet and significant operational turnaround.

Spark’s Take on TSE:SMT Stock

According to Spark, TipRanks’ AI Analyst, TSE:SMT is a Neutral.

Sierra Metals’ overall score reflects its strong financial performance, particularly in profitability and operational efficiency, though tempered by historical volatility and high leverage. Technical indicators suggest a neutral market position, while valuation metrics indicate the stock is undervalued, providing potential upside. The lack of dividend yield may deter income investors. Despite uncertainties from a takeover bid, the company’s strategic advancements and positive earnings outcomes support a favorable outlook.

To see Spark’s full report on TSE:SMT stock, click here.

Sierra Metals Responds to Alpayana’s Revised Takeover Bid

Sierra Metals Inc. has acknowledged a press release from Alpayana S.A.C. regarding an intention to revise its unsolicited all-cash takeover bid for Sierra’s common shares. The company advises its shareholders to take no action until the Board of Directors provides a recommendation on the amended bid. Sierra remains committed to its long-term strategy of delivering superior value and is actively exploring additional alternatives through negotiations with third parties.

Sierra Metals Achieves Record Revenue and Growth in 2024

Sierra Metals reported a record revenue of $272 million for the full year 2024, marking a 19% increase over the previous year. The company also achieved an adjusted EBITDA of $74.2 million, a 40% increase from 2023, and exceeded its annual production guidance. The fourth quarter was particularly strong, with record revenue of $81 million and a 19% increase in throughput rates. These results reflect Sierra Metals’ improved operational efficiency and cost management, positioning the company for continued growth and enhanced shareholder value in 2025.

Sierra Metals Reports Record Growth and Rejects Hostile Takeover Bid

Sierra Metals has reported record production levels and significant financial growth, with an expected 85% increase in EBITDA in 2025 compared to 2024. The company has rejected a hostile takeover bid, emphasizing its strong financial position and future growth potential, supported by strategic investments and operational enhancements. The company continues to focus on exploration to extend mine life and maintain its growth trajectory, while refinancing efforts have improved its financial flexibility.

Sierra Metals Reschedules Q4 and FY 2024 Financial Results Release

Sierra Metals announced a change in the release date for its Q4 2024 and fiscal year 2024 financial and operating results, now scheduled for March 26, 2026, after market hours. The company will hold a conference call and webcast on March 27, 2025, to discuss these results. This announcement is significant for stakeholders as it reflects the company’s ongoing operational activities and its commitment to transparency in financial reporting, which could impact investor confidence and market positioning.

Sierra Metals’ Subsidiary Reports Q4 2024 Financial Results

Sierra Metals’ subsidiary, Sociedad Minera Corona, reported its financial results for the fourth quarter of 2024, reflecting the company’s ongoing efforts to enhance its mining operations. The announcement underscores Sierra Metals’ strategic focus on expanding production and resource potential, which may strengthen its position in the mining industry and offer growth opportunities for stakeholders.

Sierra Metals Updates Shareholder Rights Plan Amid Hostile Bid

Sierra Metals has announced that the Toronto Stock Exchange (TSX) will defer its decision on the company’s shareholder rights plan adopted in response to a hostile takeover bid by Alpayana S.A.C. The plan remains effective and aims to protect shareholder interests against the unsolicited bid for Sierra’s common shares. The TSX’s deferral is a standard procedure in takeover situations, and the rights plan will stay in effect for at least six months unless terminated earlier.

Sierra Metals Unveils Promising Drill Results at Bolivar Mine

Sierra Metals has announced promising drill results from its Bolivar Mine in Mexico, revealing higher copper grades than previously reported. These findings suggest a significant potential for resource expansion, with the mineralized body potentially extending by additional meters both along the strike and vertically. This could enhance the mine’s value and align with Sierra Metals’ strategy of resource replacement and growth, benefiting stakeholders.

Sierra Metals Surpasses 2024 Production Guidance with Record Q4 Throughput

Sierra Metals announced record throughput for Q4 2024 and annual production results that exceeded guidance for copper, silver, gold, and zinc, with lead production meeting expectations. This achievement underscores the company’s strong operational performance and strategic investments aimed at increasing throughput and resource growth at its Latin American mines. The company anticipates continued exploration and optimization efforts to expand mineral resources, ensuring robust cash flows and long-term value for shareholders.

Sierra Metals Rejects Hostile Bid, Projects Robust Growth

Sierra Metals’ Board of Directors has unanimously rejected a hostile takeover bid by Alpayana S.A.C., citing that the offer undervalues the company’s assets and growth potential. The company is poised for significant growth in 2025, with an expected increase in EBITDA to approximately $130 million, driven by higher production at its Yauricocha and Bolivar mines.