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Sierra Metals (SMT) AI Stock Analysis

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TSE:SMT

Sierra Metals

(TSX:SMT)

Rating:61Neutral
Price Target:
$1.00
▼(-12.28% Downside)
Sierra Metals' strong financial performance with improved margins and revenue growth is a key strength. The stock's undervaluation provides potential upside. However, mixed technical signals and acquisition-related uncertainties could impact future performance.

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, development, and production of precious and base metals. Operating primarily in Mexico and Peru, it holds a diverse portfolio of mining assets, including the Bolivar and Cusi mines in Mexico and the Yauricocha mine in Peru. The company is engaged in the extraction and processing of silver, copper, gold, and zinc, catering to the growing demand for these metals in various industrial applications.
How the Company Makes MoneySierra Metals generates revenue primarily through the sale of the metals extracted from its mining operations. The company operates on a revenue model based on the production and sale of precious and base metals, with key revenue streams including silver, copper, gold, and zinc. The pricing of these metals is influenced by market dynamics, and the company benefits from rising commodity prices. Additionally, Sierra Metals may engage in strategic partnerships and joint ventures that enable it to enhance its exploration capabilities and optimize production efficiencies. The company also focuses on cost-effective mining practices and operational improvements to maximize profitability.

Sierra Metals Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q4-2024)
|
% Change Since: 0.88%|
Next Earnings Date:Nov 17, 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 shows a strong revenue growth and profitability improvement, with a healthy gross profit margin. However, the historical volatility in profitability and increasing leverage pose potential risks.
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue272.63M229.54M165.23M272.01M246.89M
Gross Profit65.70M51.84M35.39M81.22M81.58M
EBITDA54.37M48.63M3.32M53.02M96.49M
Net Income15.78M-19.33M-87.50M-27.36M23.42M
Balance Sheet
Total Assets361.01M314.12M310.44M396.82M439.59M
Cash, Cash Equivalents and Short-Term Investments19.83M9.12M5.07M34.93M71.47M
Total Debt95.74M86.01M89.01M83.44M100.46M
Total Liabilities226.56M204.26M194.25M192.19M199.38M
Stockholders Equity101.13M75.26M81.61M169.25M201.00M
Cash Flow
Free Cash Flow5.50M6.19M-30.99M473.00K31.01M
Operating Cash Flow65.15M50.19M7.26M72.25M66.98M
Investing Cash Flow-57.02M-43.99M-38.26M-71.77M-34.25M
Financing Cash Flow2.65M-2.23M1.12M-36.89M-4.07M

Sierra Metals Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price1.14
Price Trends
50DMA
1.17
Negative
100DMA
1.07
Positive
200DMA
0.94
Positive
Market Momentum
MACD
>-0.01
Positive
RSI
46.52
Neutral
STOCH
16.67
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 1.14 is below the 20-day moving average (MA) of 1.15, below the 50-day MA of 1.17, and above the 200-day MA of 0.94, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 46.52 is Neutral, neither overbought nor oversold. The STOCH value of 16.67 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 (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
61
Neutral
$246.39M7.3026.39%25.53%
50
Neutral
C$245.53M-30.68%-41.11%
44
Neutral
AU$1.54B-7.28-22.62%4.34%-3.13%-36.41%
37
Underperform
C$299.88M-5.29%-63.59%
33
Underperform
C$341.31M-57.36%-51.95%
30
Underperform
$282.85M149.61-0.07%97.07%
18
Underperform
C$286.54M75.60%-73.03%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:SMT
Sierra Metals
1.14
0.43
60.56%
TSE:SFR
Sandfire Resources America
0.28
-0.06
-18.84%
TSE:GQC
GoldQuest Mining
0.68
0.44
183.33%
TSE:REG
Regulus Resources
2.39
0.33
16.02%
TSE:NCX
NorthIsle Copper and Gold
1.17
0.67
134.00%
TSE:ALDE
Aldebaran Resources Inc
2.57
1.63
173.40%

Sierra Metals Corporate Events

Delistings and Listing ChangesM&A Transactions
Alpayana Completes Privatization of Sierra Metals Inc.
Neutral
Aug 1, 2025

Alpayana S.A.C. has completed the privatization of Sierra Metals Inc. through an amalgamation with its subsidiary, resulting in Sierra becoming a wholly-owned subsidiary of Alpayana Canada. This transaction will lead to the delisting of Sierra’s shares from the Toronto Stock Exchange and a cessation of its status as a reporting issuer in Canada, marking a significant shift in its operational and regulatory landscape.

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.

Delistings and Listing ChangesM&A TransactionsShareholder Meetings
Sierra Metals Shareholders Approve Acquisition by Alpayana
Positive
Jul 29, 2025

Sierra Metals has announced the results of its 2025 Annual General and Special Meeting, where shareholders approved the second-step acquisition by Alpayana. The acquisition involves the amalgamation of Sierra Metals with a new subsidiary, resulting in Sierra Metals becoming a wholly-owned subsidiary of Alpayana. This transaction was overwhelmingly supported by shareholders, with 99.95% voting in favor. The completion of the amalgamation is expected by August 1, 2025, and will result in the delisting of Sierra Metals from the Toronto Stock Exchange. This strategic move is anticipated to impact Sierra Metals’ operations and market presence significantly.

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’ Subsidiary Reports Q2 2025 Financial Results
Positive
Jul 28, 2025

Sierra Metals’ subsidiary, Sociedad Minera Corona, has reported its unaudited financial results for the second quarter of 2025. The announcement highlights the company’s continued focus on expanding its operations and resource base in Peru and Mexico, which could enhance its market position and provide significant opportunities for stakeholders.

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’ Subsidiary Reports Q2 2025 Financial Results
Positive
Jul 28, 2025

Sierra Metals’ subsidiary, Sociedad Minera Corona, has reported its unaudited financial results for Q2 2025, reflecting the company’s ongoing efforts to enhance its operational efficiency and resource expansion. This announcement underscores Sierra Metals’ strategic focus on growth and exploration, which could potentially strengthen its market position and offer significant benefits to stakeholders.

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 Addresses Alpayana’s Acquisition Allegations
Negative
Jul 21, 2025

Sierra Metals has responded to allegations from Alpayana S.A.C. regarding the change of control entitlements for its senior officers, which were disclosed prior to Alpayana’s acquisition attempt. Alpayana’s hostile takeover bid, which began in December 2024, was marked by aggressive tactics and a refusal to engage in customary negotiations, leading to a protracted and costly acquisition process. Sierra Metals asserts that Alpayana’s actions have been detrimental to both companies and emphasizes the importance of honoring employee entitlements.

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.

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 30, 2025