SSR Mining Inc (SSRM, Financial) has experienced a daily loss of 3.69%, alongside a three-month decline of 20.19%, leaving investors with concerns about its current market position. Despite these setbacks, the company boasts an Earnings Per Share (EPS) of $0.99. The pressing question remains: is SSR Mining significantly undervalued? This valuation analysis aims to shed light on that query and invites you to delve into the financial intricacies that could reveal the true worth of SSR Mining.
Company Introduction
SSR Mining Inc is a prominent minerals company with a focus on mining precious metals in the Americas. A substantial portion of its revenue stems from gold production, primarily from the Marigold mine in Nevada, USA. Silver production, largely from the Puna mine in Argentina, also contributes significantly to the company's earnings. With its current stock price at $11.22 and a Fair Value (GF Value) of $18.69, SSR Mining appears to be significantly undervalued, presenting a potential opportunity for investors.
Summarize GF Value
The GF Value is a proprietary measure of a stock's intrinsic value, computed by considering historical trading multiples, a GuruFocus adjustment factor based on past performance and growth, and future business performance estimates. SSR Mining (SSRM, Financial) is currently trading below this calculated fair value, suggesting that the stock may be significantly undervalued. This underpricing could indicate a higher potential for future returns, given the company's business growth.
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Financial Strength
Investing in companies with robust financial strength is crucial to minimize the risk of capital loss. SSR Mining's financial fortitude is reflected in its cash-to-debt ratio of 1.4, although it falls short compared to 69.18% of its peers in the Metals & Mining industry. Nevertheless, with a financial strength rank of 8 out of 10, SSR Mining's fiscal health remains strong.
Profitability and Growth
SSR Mining's profitability is impressive, with 7 out of the last 10 years being profitable. The company's operating margin of 15.99% ranks well within its industry, underscoring its strong profitability. However, SSR Mining's growth metrics suggest there is room for improvement, with its 3-year average annual revenue growth at 5.9% and EBITDA growth rate at 5.6%.
ROIC vs. WACC
An examination of SSR Mining's Return on Invested Capital (ROIC) against its Weighted Average Cost of Capital (WACC) reveals that the company's ROIC of 4.31 is currently below its WACC of 5.29. This comparison is critical as it indicates the efficiency of the company in generating cash flow relative to its capital investments.
Conclusion
In conclusion, SSR Mining (SSRM, Financial) presents signs of being significantly undervalued. The company's financial condition is robust, and its profitability is noteworthy. While its growth could be more competitive, the current valuation suggests that SSR Mining's stock might offer a promising opportunity for value investors. For a more detailed financial overview, SSR Mining's 30-Year Financials can be reviewed here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
