TSX:FVI

Stock Analysis Report

Fortuna Silver Mines

Executive Summary

Fortuna Silver Mines Inc. engages in the exploration, extraction, and processing of precious and base metal deposits in Latin America.

Rewards

Trading at 92.1% below its fair value

Earnings are forecast to grow 36.7% per year

Risk Analysis

Highly volatile share price over past 3 months

Profit margins (2.8%) are lower than last year (23.6%)



Snowflake Analysis

High growth potential with excellent balance sheet.


Similar Companies

Share Price & News

How has Fortuna Silver Mines's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FVI's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.4%

FVI

0.03%

CA Metals and Mining

-0.3%

CA Market


1 Year Return

-2.1%

FVI

22.8%

CA Metals and Mining

10.7%

CA Market

Return vs Industry: FVI underperformed the Canadian Metals and Mining industry which returned 22.8% over the past year.

Return vs Market: FVI underperformed the Canadian Market which returned 10.7% over the past year.


Shareholder returns

FVIIndustryMarket
7 Day-3.4%0.03%-0.3%
30 Day4.7%2.7%0.1%
90 Day-12.6%-0.9%1.7%
1 Year-2.1%-2.1%23.8%22.8%14.4%10.7%
3 Year-44.4%-44.4%6.5%4.5%16.0%5.6%
5 Year-9.4%-9.4%35.8%31.5%41.5%20.6%

Price Volatility Vs. Market

How volatile is Fortuna Silver Mines's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Fortuna Silver Mines undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FVI (CA$4.25) is trading below our estimate of fair value (CA$53.95)

Significantly Below Fair Value: FVI is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FVI is poor value based on its PE Ratio (73x) compared to the Metals and Mining industry average (14x).

PE vs Market: FVI is poor value based on its PE Ratio (73x) compared to the Canadian market (15.3x).


Price to Earnings Growth Ratio

PEG Ratio: FVI is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: FVI is good value based on its PB Ratio (0.8x) compared to the CA Metals and Mining industry average (1.3x).


Next Steps

Future Growth

How is Fortuna Silver Mines forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

36.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FVI's forecast earnings growth (36.7% per year) is above the savings rate (1.4%).

Earnings vs Market: FVI's earnings (36.7% per year) are forecast to grow faster than the Canadian market (10.7% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FVI's revenue (20% per year) is forecast to grow faster than the Canadian market (4.9% per year).

High Growth Revenue: FVI's revenue (20% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FVI's Return on Equity is forecast to be low in 3 years time (10%).


Next Steps

Past Performance

How has Fortuna Silver Mines performed over the past 5 years?

33.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FVI has high quality earnings.

Growing Profit Margin: FVI's current net profit margins (2.8%) are lower than last year (23.6%).


Past Earnings Growth Analysis

Earnings Trend: FVI's earnings have grown significantly by 33.7% per year over the past 5 years.

Accelerating Growth: FVI's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FVI had negative earnings growth (-89.3%) over the past year, making it difficult to compare to the Metals and Mining industry average (3.9%).


Return on Equity

High ROE: FVI's Return on Equity (1.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Fortuna Silver Mines's financial position?


Financial Position Analysis

Short Term Liabilities: FVI's short term assets ($126.6M) exceed its short term liabilities ($80.5M).

Long Term Liabilities: FVI's short term assets ($126.6M) do not cover its long term liabilities ($180.7M).


Debt to Equity History and Analysis

Debt Level: FVI's debt to equity ratio (18.1%) is considered satisfactory.

Reducing Debt: FVI had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: FVI's debt is well covered by operating cash flow (58.5%).

Interest Coverage: FVI earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: FVI has a high level of physical assets or inventory.

Debt Coverage by Assets: FVI's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

What is Fortuna Silver Mines's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%5.7%industryaverage1.2%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate FVI's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate FVI's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if FVI's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if FVI's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of FVI's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of Fortuna Silver Mines's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average management tenure


CEO

Jorge A. Ganoza Durant (49yo)

11.3yrs

Tenure

US$5,527,843

Compensation

Mr. Jorge A. Ganoza Durant, B.Sc. Eng, co-founded Fortuna Silver Mines Inc. (formerly Fortuna Ventures Inc.) in 2004. Mr. Durant has been the Chief Executive Officer and President of Fortuna Silver Mines I ...


CEO Compensation Analysis

Compensation vs Market: Jorge A.'s total compensation ($USD5.53M) is above average for companies of similar size in the Canadian market ($USD1.07M).

Compensation vs Earnings: Jorge A.'s compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

3.3yrs

Average Tenure

56yo

Average Age

Experienced Management: FVI's management team is considered experienced (3.3 years average tenure).


Board Age and Tenure

7.4yrs

Average Tenure

52yo

Average Age

Experienced Board: FVI's board of directors are considered experienced (7.4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$64,52827 Jun 19
Alfredo Arturo Sillau Valdez
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares16,502
Max PriceUS$3.91
BuyUS$281,12821 Jun 19
Jorge A. Ganoza Durant
EntityIndividual
Role
Chief Executive Officer
President
Shares77,000
Max PriceUS$3.92
BuyUS$588,89617 May 19
Jorge A. Ganoza Durant
EntityIndividual
Role
Chief Executive Officer
President
Shares170,000
Max PriceUS$3.55

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Gordon Jang (54yo)

    Vice President of Finance & Accounting

    • Tenure: 2.7yrs
  • Mario Szotlender (58yo)

    Co-Founder & Director

    • Tenure: 11.5yrs
    • Compensation: US$225.30k
  • Sally Whittall (59yo)

    Corporate Secretary

    • Tenure: 0yrs
  • David Volkert (66yo)

    Vice President of Exploration

    • Tenure: 3.3yrs
    • Compensation: US$753.10k
  • Jorge A. Ganoza Durant (49yo)

    President

    • Tenure: 11.3yrs
    • Compensation: US$5.53m
  • Luis Ganoza Durant (48yo)

    Chief Financial Officer

    • Tenure: 13.5yrs
    • Compensation: US$3.17m
  • Manuel Carlos

    Vice President of Operations

    • Tenure: 8.3yrs
    • Compensation: US$1.64m
  • Carlos Baca

    Investor Relations Manager

    • Tenure: 0yrs
  • Eric Chapman

    Vice President of Technical Services

    • Tenure: 2.9yrs
    • Compensation: US$855.57k
  • Linda Desaulniers

    Legal Counsel

    • Tenure: 1.3yrs

Board Members

  • Simon T. Ridgway (70yo)

    Chairman of the Board

    • Tenure: 13.5yrs
    • Compensation: US$297.30k
  • Mario Szotlender (58yo)

    Co-Founder & Director

    • Tenure: 11.5yrs
    • Compensation: US$225.30k
  • David Farrell (50yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: US$192.36k
  • Jorge A. Ganoza Durant (49yo)

    President

    • Tenure: 11.3yrs
    • Compensation: US$5.53m
  • David Laing (63yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$157.86k
  • Kylie Dickson (38yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$166.78k
  • Alfredo Arturo Sillau Valdez (52yo)

    Independent Director

    • Tenure: 3.1yrs
    • Compensation: US$161.36k

Company Information

Fortuna Silver Mines Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Fortuna Silver Mines Inc.
  • Ticker: FVI
  • Exchange: TSX
  • Founded: 1990
  • Industry: Silver
  • Sector: Materials
  • Market Cap: CA$684.445m
  • Shares outstanding: 160.29m
  • Website: https://www.fortunasilver.com

Number of Employees


Location

  • Fortuna Silver Mines Inc.
  • 200 Burrard Street
  • Suite 650
  • Vancouver
  • British Columbia
  • V6C 3L6
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FVITSX (The Toronto Stock Exchange)YesCommon SharesCACADFeb 1992
F4SDB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 1992
FVI NBMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNFeb 1992
FSMNYSE (New York Stock Exchange)YesCommon SharesUSUSDFeb 1992
0QYMLSE (London Stock Exchange)YesCommon SharesGBCADFeb 1992

Biography

Fortuna Silver Mines Inc. engages in the exploration, extraction, and processing of precious and base metal deposits in Latin America. The company explores for silver, gold, lead, and zinc deposits. Its pr ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 23:53
End of Day Share Price2019/12/09 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.