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Sierra Metals Us (TSE:SMT)
:SMT

Sierra Metals (SMT) AI Stock Analysis

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Sierra Metals

(OTC:SMT)

Rating:66Neutral
Price Target:
C$1.00
▼(-13.04%Downside)
Sierra Metals has demonstrated strong financial performance with significant revenue and profitability growth. The undervaluation based on P/E ratio offers potential upside, but the ongoing acquisition and historical financial volatility present risks. Technical indicators are mixed, suggesting caution.

Sierra Metals (SMT) vs. iShares MSCI Canada ETF (EWC)

Sierra Metals Business Overview & Revenue Model

Company DescriptionSierra Metals Inc. is a Canadian mining company focused on the exploration and production of precious and base metals. Operating primarily in Latin America, the company has mining projects in Mexico and Peru, where it extracts minerals such as copper, zinc, lead, silver, and gold. Sierra Metals is dedicated to maintaining sustainable mining practices and delivering high-quality mineral products to global markets.
How the Company Makes MoneySierra Metals generates revenue through the extraction and sale of mineral commodities such as copper, zinc, lead, silver, and gold. The company operates several mines, notably the Yauricocha Mine in Peru, and the Bolivar and Cusi Mines in Mexico. Revenue is primarily driven by the production and sale of concentrates and doré bars containing the extracted metals. Sierra Metals' earnings are influenced by global commodity prices, production volumes, and operational efficiencies. The company may also engage in strategic partnerships and joint ventures to optimize its mining operations and access new markets.

Sierra Metals Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q4-2024)
|
% Change Since: 1.77%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Sierra Metals' strong operational and financial performance in 2024, with record revenue and production increases. Despite high capital expenditures and uncertainties due to an unsolicited takeover bid, the company showed significant growth and improvement, particularly in operational capabilities and resource expansion. The overall sentiment is positive due to the outweighing positive developments.
Q4-2024 Updates
Positive Updates
Record Revenue and Production
Sierra Metals achieved record revenues of over $272 million in 2024, a 19% increase over 2023. The company also exceeded 2024 production guidance, with throughput rates 11% higher than in 2023.
Operational Improvements at Yauricocha and Bolivar
Yauricocha achieved throughput rates 31% higher in Q4 2024 compared to Q4 2023. Bolivar consistently produced at its capacity of 5,000 tonnes per day and beyond, with a 10% increase in throughput rates compared to 2023.
Strong Financial Performance
Adjusted EBITDA from continuing operations was $74.2 million in 2024, a significant increase of 44% from 2023. Cash flow from operating activities before movements in working capital was $69.5 million, 60% higher than in 2023.
Debt Refinancing
Refinancing long-term debt into a $95 million facility enhanced working capital and financial flexibility.
Exploration and Resource Expansion
Nearly 44,000 meters were drilled at Bolivar in 2024 to expand resources. At Yauricocha, over 20,000 meters of diamond drilling was conducted to replace depleted resources.
Negative Updates
Flat and Lower Metal Production in Certain Areas
Bolivar's Q4 2024 copper production was flat compared to Q4 2023, and gold production was 19% lower.
Uncertainty Due to Unsolicited Takeover Bid
The unsolicited takeover bid has been a distraction and has adversely impacted Sierra Metals' value.
High Capital Expenditures
CapEx in 2024 was high at around $60 million, with expectations to remain high in 2025 at around $75 million.
Company Guidance
During the Sierra Metals Inc. Q4 and full-year 2024 results conference call, significant achievements were outlined, including surpassing production guidance for the year. The company reported an 11% increase in throughput rates over 2023, leading to a 10% rise in copper production. Yauricocha achieved record Q4 throughput of 798,000 tonnes, a 31% increase from the previous year, while Bolivar consistently operated at its capacity of 5,000 tonnes per day. Financially, Sierra Metals recorded a 19% increase in revenues to over $272 million and a 44% rise in adjusted EBITDA to $74.2 million. The company also managed to reduce its net debt-to-EBITDA ratio to one times. Looking forward, Sierra Metals anticipates further production growth in 2025, with expectations to increase copper, zinc, silver, and lead output while reducing all-in sustaining costs at Yauricocha by 20%. EBITDA is projected to grow to around $100 million, reflecting a 76% increase over 2024.

Sierra Metals Financial Statement Overview

Summary
Sierra Metals exhibits strong revenue growth and profitability improvement in the latest period, with a solid operating cash flow position. However, the company faces challenges related to historical profitability fluctuations and increasing leverage. Continued focus on managing capital expenditures and maintaining profitability will be key to sustaining financial health.
Income Statement
72
Positive
Sierra Metals shows a healthy revenue growth with a recent increase in total revenue from 2024 to TTM (Trailing-Twelve-Months). The gross profit margin improved to 27.4% in TTM from 24.1% in 2024. Net profit margin is also positive at 7.6% in TTM, marking a significant rebound from past losses. However, historical volatility in profitability, particularly in 2022 and 2023, suggests potential risks.
Balance Sheet
65
Positive
The company maintains a moderate debt-to-equity ratio of 0.76 in TTM, reflecting a balanced capital structure. Return on Equity (ROE) is 20.7% in TTM, indicating efficient use of equity capital to generate profits. However, the equity ratio has decreased over the years, suggesting increasing leverage and potential financial risk.
Cash Flow
70
Positive
Sierra Metals shows strong cash generation with operating cash flows exceeding net income. The free cash flow growth rate is significant, improving from 2024 to TTM, which enhances liquidity. Despite this, capital expenditures are high, which may constrain free cash flow in the future.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
295.57M272.63M229.54M192.12M272.01M246.89M
Gross Profit
80.97M65.70M51.84M5.47M81.22M81.58M
EBIT
37.99M23.74M13.66M-75.82M40.91M51.12M
EBITDA
69.55M54.37M48.02M3.32M86.98M91.39M
Net Income Common Stockholders
22.56M15.78M-19.33M-87.50M-22.11M23.42M
Balance SheetCash, Cash Equivalents and Short-Term Investments
22.36M19.83M9.12M5.07M34.93M71.47M
Total Assets
378.93M361.01M314.12M310.44M396.82M439.59M
Total Debt
82.97M95.74M86.01M89.01M83.44M100.46M
Net Debt
60.61M75.91M76.89M83.93M48.51M28.99M
Total Liabilities
234.00M226.56M204.26M194.25M192.19M199.38M
Stockholders Equity
109.17M101.13M75.26M81.61M169.25M201.00M
Cash FlowFree Cash Flow
7.96M5.50M6.19M-30.99M473.00K31.01M
Operating Cash Flow
75.89M65.15M50.19M7.26M72.25M66.98M
Investing Cash Flow
-65.75M-57.02M-43.99M-38.26M-71.77M-34.25M
Financing Cash Flow
970.00K2.65M-2.23M1.12M-36.89M-4.07M

Sierra Metals Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price1.15
Price Trends
50DMA
1.04
Positive
100DMA
0.94
Positive
200DMA
0.85
Positive
Market Momentum
MACD
0.05
Positive
RSI
48.59
Neutral
STOCH
4.17
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SMT, the sentiment is Neutral. The current price of 1.15 is below the 20-day moving average (MA) of 1.21, above the 50-day MA of 1.04, and above the 200-day MA of 0.85, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 48.59 is Neutral, neither overbought nor oversold. The STOCH value of 4.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:SMT.

Sierra Metals Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSSMT
66
Neutral
C$242.02M7.3626.39%25.53%
51
Neutral
$2.02B-1.12-21.36%3.65%2.87%-30.54%
TSGQC
50
Neutral
C$177.82M-30.68%
TSREG
37
Underperform
C$274.25M-5.65%-43.69%
TSNCX
33
Underperform
C$242.49M-57.36%-62.76%
30
Underperform
$205.92M149.61-0.07%
TSSFR
18
Underperform
$286.54M75.60%-73.03%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:SMT
Sierra Metals
1.15
0.24
26.37%
TSE:SFR
Sandfire Resources America
0.28
-0.08
-22.22%
TSE:GQC
GoldQuest Mining
0.57
0.33
137.50%
TSE:REG
Regulus Resources
2.33
0.61
35.47%
TSE:NCX
NorthIsle Copper and Gold
1.09
0.71
186.84%
TSE:ALDE
Aldebaran Resources Inc
1.85
0.85
84.50%

Sierra Metals Corporate Events

Shareholder Meetings
Sierra Metals Announces Combined Annual and Special Shareholder Meeting
Neutral
Jun 2, 2025

Sierra Metals has announced an annual general and special meeting of shareholders to be held on July 29, 2025, which will address both the annual business and specific matters requested by Alpayana S.A.C. The decision to combine the meetings was made to avoid the costs of holding separate meetings while still addressing the requisitioned matters. The Board of Directors is committed to operating in the best interests of stakeholders and is open to engaging with Alpayana on a transition plan.

The most recent analyst rating on (TSE:SMT) stock is a Hold with a C$1.10 price target. To see the full list of analyst forecasts on Sierra Metals stock, see the TSE:SMT Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Sierra Metals Urges Shareholders to Act on Alpayana Offer Before Deadline
Negative
May 21, 2025

Sierra Metals has reminded its shareholders of the impending deadline to tender shares to Alpayana’s all-cash offer of $1.15 per common share. Alpayana has extended the offer period until May 23, 2025, and has already acquired approximately 86.7% of Sierra’s common shares. Despite Sierra’s efforts to negotiate a full acquisition, Alpayana has not committed to a second-step transaction to acquire 100% of the shares. Shareholders are advised to tender their shares promptly, as remaining minority shareholders could face reduced liquidity and market value of their shares, and potential conflicts of interest with Alpayana as the controlling shareholder.

The most recent analyst rating on (TSE:SMT) stock is a Hold with a C$1.10 price target. To see the full list of analyst forecasts on Sierra Metals stock, see the TSE:SMT Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Sierra Metals Reports Strong Q1 2025 Financial Results with Increased Metal Production
Positive
May 7, 2025

Sierra Metals reported a strong financial performance for Q1 2025, with revenues increasing by 36% to $86.1 million compared to Q1 2024, driven by higher metal production, particularly at the Yauricocha mine. The company’s adjusted EBITDA saw a significant rise of 114%, reflecting improved operational efficiency and increased metal output, positioning Sierra Metals favorably within the mining sector and enhancing its financial stability.

M&A Transactions
Sierra Metals Evaluates Enhanced Takeover Bid from Alpayana
Neutral
May 6, 2025

Sierra Metals has responded to an increased takeover bid from Alpayana S.A.C., raising the offer price to C$1.15 per share. Despite the premium offered, the Board has made no recommendation to shareholders, citing the conditionality and uncertainty of the offer. The Board encourages shareholders to review the details carefully, as the offer provides a significant premium to market price and offers liquidity and certainty of value amidst volatile markets.

M&A Transactions
Sierra Metals Reviews Amended Takeover Bid from Alpayana
Neutral
May 2, 2025

Sierra Metals has acknowledged receipt of an amended bid from Alpayana S.A.C., which has increased its offer price to acquire all common shares of the company from C$1.11 to C$1.15 per share. The company’s board of directors is reviewing the bid and plans to make a recommendation to shareholders soon. The bid’s expiry has been extended to May 12, 2025, but remains subject to numerous conditions at Alpayana’s discretion, which could impact Sierra Metals’ operations and stakeholder decisions.

Financial Disclosures
Sierra Metals’ Subsidiary Reports Q1 2025 Financial Results
Neutral
May 1, 2025

Sierra Metals’ subsidiary, Sociedad Minera Corona, has filed its unaudited financial results for Q1 2025 at the Lima Stock Exchange. The company holds an 81.84% interest in Corona. This announcement highlights Sierra Metals’ ongoing financial transparency and commitment to its stakeholders, potentially impacting its market position and investor confidence.

M&A Transactions
Sierra Metals Agrees to All-Cash Takeover Bid by Alpayana
Positive
Apr 23, 2025

Sierra Metals has reached an agreement in principle with Alpayana for an all-cash take-over bid, where Alpayana Canada will acquire all common shares of Sierra Metals for CDN $1.15 per share. The bid has the unanimous support of Sierra Metals’ Board of Directors and a fairness opinion from BMO Capital Markets. The agreement is expected to be finalized by April 30, 2025, with an extended deadline for shareholders to tender their shares by May 12, 2025. This acquisition could significantly impact Sierra Metals’ operations and market positioning, offering potential growth and stability for stakeholders.

Business Operations and StrategyFinancial Disclosures
Sierra Metals Announces Strong Q1 2025 Production Results
Positive
Apr 16, 2025

Sierra Metals reported a strong start to 2025 with an 18% increase in consolidated ore throughput and a 14% rise in copper production compared to the previous year. The Yauricocha mine in Peru saw a significant boost in copper output, more than doubling due to higher throughput and improved grades, while the Bolivar mine in Mexico experienced declines in production due to lower grades and weather-related disruptions. These results reflect successful operational improvements and position the company for continued growth and value delivery to shareholders.

M&A TransactionsBusiness Operations and Strategy
Sierra Metals Urges Shareholders to Reject Amended Hostile Bid
Negative
Apr 9, 2025

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.

M&A TransactionsBusiness Operations and Strategy
Sierra Metals Responds to Alpayana’s Revised Takeover Bid
Neutral
Apr 3, 2025

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.

Business Operations and StrategyFinancial Disclosures
Sierra Metals Achieves Record Revenue and Growth in 2024
Positive
Mar 26, 2025

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.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Sierra Metals Reports Record Growth and Rejects Hostile Takeover Bid
Positive
Mar 17, 2025

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.

Financial Disclosures
Sierra Metals Reschedules Q4 and FY 2024 Financial Results Release
Neutral
Mar 14, 2025

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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.