A Look at First Majestic Silver (TSX:AG) Valuation Following Record Q3 Silver Production and Operational Gains

First Majestic Silver (TSX:AG) just released its third-quarter operating results, revealing record-breaking silver production. The company’s silver output jumped 96% from last year. This update is a key focus for investors.

See our latest analysis for First Majestic Silver.

First Majestic Silver’s momentum is clear, with a 129.34% year-to-date share price return and a remarkable 130.33% total shareholder return over the past year. Recent record silver production, new mineral discoveries, and the launch of a fresh share repurchase program have further contributed to the rally, signaling renewed investor confidence in the company’s long-term growth story.

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With the stock rallying on stellar operating results, is there still more upside for First Majestic Silver’s shares, or are investors already pricing in all the future growth potential?

Most Popular Narrative: 23.1% Overvalued

With First Majestic Silver trading at CA$19.70, the most widely followed narrative sets a fair value at CA$16.00, almost a quarter below the last close. The difference is driven by sharply improved net margins and a much lower future profit multiple, with a reassessment following significant recent operational gains.

Substantial ongoing investment in exploration (e.g., 255,000 meters drilled, addition of drilling rigs, and development of large new ore bodies like Navidad and Santo Niño) is expected to extend reserve life, increase production capacity, and drive long-term revenue and cash flow growth. Operational synergies and cost savings from the successful integration of Cerro Los Gatos (including procurement consolidation and efficiency improvements through best practices and technology transfer) are likely to lower all-in sustaining costs and improve net margins and earnings over time.

Read the complete narrative.

Which bold moves and financial leaps underpin this higher-than-expected price? The narrative rests on aggressive drilling, bigger ore bodies, and a profit surge reminiscent of high-flyers. Curious which specific future projections justify such an ambitious valuation? Dive in to uncover what’s fueling the new fair value.

Result: Fair Value of $16.00 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistently high operating costs or unexpected delays in new projects could present challenges to the positive outlook and test long-term profit expectations.

Find out about the key risks to this First Majestic Silver narrative.

Build Your Own First Majestic Silver Narrative

If you see the story differently or want to dig into the numbers yourself, it’s quick and easy to put your own narrative together. Do it your way.

A great starting point for your First Majestic Silver research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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