Is Endeavour Silver’s Recent 75% Rally Justified After Expansion Plan Announcement?

• Wondering if Endeavour Silver is undervalued right now? You are not alone, given all the interest swirling around this precious metals stock.
• The shares have jumped an impressive 75.8% year-to-date, with a 64.1% gain over the last twelve months. It is worth noting they have recently pulled back, down 11.9% in the past week.
• Much of this momentum has been fueled by surging silver prices and renewed investor optimism following the company's recently announced expansion plans at two of its key mines. Industry-wide shifts and positive analyst commentary have added fuel to the narrative, further amplifying recent swings in the share price.
• When it comes to valuation, Endeavour Silver currently scores just 2 out of 6 on our quick value check, which suggests there may be more to the story than simple price moves. We will explore standard and advanced valuation approaches below, so you will have a clear view. Keep reading for an alternative perspective that could change how you think about value for good.

Endeavour Silver scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Endeavour Silver Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a fundamental approach to valuing a company. It projects expected future cash flows and discounts them back to today's value to estimate what the business is worth.

For Endeavour Silver, the latest Free Cash Flow (FCF) stands at negative $151.69 million, reflecting recent investments and volatility common in the metals and mining sector. Looking ahead, analysts expect a sharp turnaround, with FCF projected to reach $190.99 million in 2026 and $252.43 million in 2027. Beyond the five-year mark, future cash flows are extrapolated and show a gradual taper as market and operational growth stabilizes. The ten-year forecast using this DCF approach estimates FCF at $24.94 million by 2035, all denominated in $.

Based on these projections, the DCF model calculates Endeavour Silver's estimated fair value at $4.10 per share. However, with the latest market price notably higher, this implies the stock is trading at a premium of approximately 146.4 percent above its intrinsic value. This suggests significant overvaluation according to this metric.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Endeavour Silver may be overvalued by 146.4%. Discover 872 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Endeavour Silver.

Approach 2: Endeavour Silver Price vs Sales

The Price-to-Sales (P/S) ratio is often the preferred metric for valuing metals and mining companies, especially when earnings are volatile or negative. Revenue tends to be more stable and less affected by accounting choices or short-term fluctuations. This makes the P/S ratio a practical way to compare companies in this sector.

What counts as a “normal” or “fair” P/S ratio can vary based on factors like expected sales growth, profit margins, business risk, and how a company compares to its peers. Higher growth or stronger margins often justify a higher ratio, while companies facing more uncertainty might deserve a lower multiple.

Endeavour Silver currently trades on a P/S ratio of 6.29x. This is above the metals and mining industry average of 5.48x but below the peer group average of 8.88x. This suggests the market is pricing in fairly robust expectations for Endeavour’s top line performance relative to the broader sector.

Simply Wall St’s proprietary Fair Ratio for Endeavour Silver stands at 4.05x. This Fair Ratio takes into account not just broad benchmarks, but also the company’s sales growth outlook, margins, risks, industry landscape, and size. Unlike standard comparisons, it aims to isolate what a rational valuation should be for this specific business rather than just how it measures up against others.

Since Endeavour Silver’s actual P/S ratio is notably higher than its Fair Ratio, the stock looks expensive on this measure alone. The valuation appears rich even after accounting for its unique prospects and risk profile.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1403 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Endeavour Silver Narrative

Earlier, we mentioned a better way to understand valuation, so let's introduce you to Narratives, an innovative approach that connects the story behind a company to the numbers. This method directly links your view of Endeavour Silver to its financial forecasts and fair value estimation.

A Narrative is your investment thesis in action: you outline your perspective on the company’s story, make assumptions about future revenue, earnings, and margins, and see how those shape a fair value. All of this can be done with just a few clicks on the Simply Wall St Community page, where millions of investors share their insights.

Narratives let you clearly compare your estimated fair value with the current stock price, helping you quickly decide if Endeavour Silver aligns with your reasoning, rather than relying solely on consensus or market hype.

Best of all, these Narratives update automatically when new information like earnings or news emerges, so your thesis stays relevant without any extra effort.

For example, some investors believe commercial production at the Terronera mine and rising silver demand will push Endeavour’s fair value up to CA$15.13 per share. Others focus on operational and liquidity risks, placing fair value as low as CA$7.50. This gives you the tools to understand and choose the story that matches your convictions.

Do you think there's more to the story for Endeavour Silver? Head over to our Community to see what others are saying!

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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