SSR Mining Inc (SSRM, Financial) has recently experienced a 15.27% loss in daily trading and a 16.88% loss over the last three months. Despite this, the company's Earnings Per Share (EPS) (EPS) stands at 0.8. This begs the question: is SSR Mining (SSRM) significantly undervalued? In this article, we will explore the company's intrinsic value, financial strength, profitability, and growth to answer this question. Keep reading to uncover the true worth of SSR Mining.
Company Overview of SSR Mining Inc (SSRM, Financial)
SSR Mining Inc is a precious metals mining company with operations across the Americas. The company primarily generates its revenue from gold production, with a significant portion derived from silver production. SSR Mining operates the Marigold mine in Nevada, United States; the Seabee Gold Operation in Saskatchewan, Canada; and the Puna mine in Argentina. The majority of the company's gold production comes from the Marigold mine, while the Puna mine primarily contributes to its silver production. With a current share price of $11.76, SSR Mining has a market cap of $2.40 billion. But how does this compare with the company's intrinsic value?
Understanding SSR Mining's GF Value
The GF Value is a unique measure that estimates a stock's intrinsic value based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. The GF Value Line provides an overview of the fair value at which the stock should ideally be traded. If the stock price is significantly above the GF Value Line, it is overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher.
Based on the GF Value calculation, SSR Mining (SSRM, Financial) appears to be significantly undervalued. Given its current price of $11.76 per share and a market cap of $2.40 billion, the stock's future return is likely to be higher. This suggests that the long-term return of SSR Mining's stock is likely to be much higher than its business growth.
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SSR Mining's Financial Strength
Before investing in a company, it's crucial to assess its financial strength. Companies with poor financial strength pose a higher risk of permanent loss. By examining SSR Mining's cash-to-debt ratio and interest coverage, we can gauge its financial strength. SSR Mining's cash-to-debt ratio is 1.12, which is lower than 70.59% of 2642 companies in the Metals & Mining industry. The company's overall financial strength is 7 out of 10, indicating fair financial strength.
Profitability and Growth of SSR Mining
Investing in profitable companies, especially those with consistent long-term profitability, poses less risk. SSR Mining has been profitable for 7 out of the past 10 years. Over the past twelve months, the company generated a revenue of $1.10 billion and had an EPS of $0.8. Its operating margin is 8.88%, which ranks better than 69.43% of 870 companies in the Metals & Mining industry. Overall, GuruFocus ranks SSR Mining's profitability at 7 out of 10, indicating fair profitability.
Growth is a critical factor in a company's valuation. SSR Mining's growth ranks lower than 64.37% of 595 companies in the Metals & Mining industry based on its 3-year average revenue growth rate. The company's 3-year average EBITDA growth rate is 5.6%, which ranks lower than 56.73% of 1851 companies in the Metals & Mining industry.
Evaluating SSR Mining's ROIC and WACC
Comparing a company's return on invested capital (ROIC) to its weighted average cost of capital (WACC) can provide insights into its profitability. SSR Mining's ROIC over the past 12 months is 3.28, while its WACC is 5.94. If the ROIC exceeds the WACC, the company is likely creating value for its shareholders.
Conclusion
In conclusion, SSR Mining (SSRM, Financial) appears to be significantly undervalued. The company's financial condition is fair, and its profitability is fair. However, its growth ranks lower than 56.73% of 1851 companies in the Metals & Mining industry. To learn more about SSR Mining stock, you can check out its 30-Year Financials 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.
