SilverCrest Metals Inc. (SILV) Soars to 52-Week High, Time to Cash Out?

Shares of SilverCrest Metals Inc. (SILV) have been strong performers lately, with the stock up 17.8% over the past month. The stock hit a new 52-week high of $8.75 in the previous session. SilverCrest Metals Inc. has gained 29.6% since the start of the year compared to the -0.3% move for the Zacks Basic Materials sector and the -7.4% return for the Zacks Mining - Miscellaneous industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on March 11, 2024, SilverCrest Metals reported EPS of $0.24 versus consensus estimate of $0.15.

For the current fiscal year, SilverCrest Metals is expected to post earnings of $0.54 per share on $256.25 million in revenues. This represents a -31.65% change in EPS on a 4.54% change in revenues. For the next fiscal year, the company is expected to earn $0.48 per share on $239.7 million in revenues. This represents a year-over-year change of -11.57% and -6.46%, respectively.

Valuation Metrics

SilverCrest Metals may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

SilverCrest Metals has a Value Score of C. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 15.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.7X. On a trailing cash flow basis, the stock currently trades at 9X versus its peer group's average of 7.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, SilverCrest Metals currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if SilverCrest Metals passes the test. Thus, it seems as though SilverCrest Metals shares could still be poised for more gains ahead.

How Does SILV Stack Up to the Competition?

Shares of SILV have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Newmont Corporation (NEM). NEM has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of B, and a Momentum Score of B.

Earnings were strong last quarter. Newmont Corporation beat our consensus estimate by 57.14%, and for the current fiscal year, NEM is expected to post earnings of $2.40 per share on revenue of $16.08 billion.

Shares of Newmont Corporation have gained 10% over the past month, and currently trade at a forward P/E of 17.72X and a P/CF of 14.12X.

The Mining - Miscellaneous industry may rank in the bottom 67% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for SILV and NEM, even beyond their own solid fundamental situation.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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