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 93.6% below its fair value

Earnings are forecast to grow 45.28% per year

Risk Analysis

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



Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.4%

FVI

4.6%

CA Metals and Mining

0.2%

CA Market


1 Year Return

-2.4%

FVI

4.5%

CA Metals and Mining

4.9%

CA Market

Return vs Industry: FVI underperformed the Canadian Metals and Mining industry which returned 4.5% over the past year.

Return vs Market: FVI underperformed the Canadian Market which returned 4.9% over the past year.


Shareholder returns

FVIIndustryMarket
7 Day-1.4%4.6%0.2%
30 Day-4.5%3.7%0.4%
90 Day21.6%10.7%3.7%
1 Year-2.4%-2.4%5.1%4.5%8.2%4.9%
3 Year-40.9%-40.9%-5.4%-7.0%15.9%5.5%
5 Year-10.3%-10.3%26.4%22.6%33.8%14.3%

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$4.89) is trading below our estimate of fair value (CA$76.57)

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 (83.8x) compared to the Metals and Mining industry average (15.8x).

PE vs Market: FVI is poor value based on its PE Ratio (83.8x) compared to the Canadian market (16x).


Price to Earnings Growth Ratio

PEG Ratio: FVI is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: FVI is good value based on its PB Ratio (1x) compared to the CA Metals and Mining industry average (1.5x).


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?

45.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FVI's forecast earnings growth (45.3% per year) is above the savings rate (1.4%).

Earnings vs Market: FVI's earnings (45.3% 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 (17.3% per year) is forecast to grow faster than the Canadian market (4.9% per year).

High Growth Revenue: FVI's revenue (17.3% per year) is forecast to grow slower 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 (7.4%).


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 (10.1%).


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%1.9%markettop25%5.3%industryaverage1.1%forecastin3Yearsn/a

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

How experienced are the management team and are they aligned to shareholders interests?

3.5yrs

Average management tenure


CEO

Jorge A. Ganoza Durant (49yo)

11.5yrs

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 ($USD5.53M) is above average for companies of similar size in the Canadian market ($USD952.49K).

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.


Leadership Team

NamePositionTenureCompensationOwnership
Jorge A. Ganoza Durant
President11.5yrsUS$5.53m0.49% $3.8m
Mario Szotlender
Co-Founder & Director11.7yrsUS$225.30k0.16% $1.2m
Luis Ganoza Durant
Chief Financial Officer13.7yrsUS$3.17m0.096% $748.6k
Manuel Carlos
Vice President of Operations8.5yrsUS$1.64m0.031% $246.4k
Eric Chapman
Vice President of Technical Services3.1yrsUS$855.57k0.029% $225.5k
Gordon Jang
Vice President of Finance & Accounting2.8yrsno data0.0073% $56.8k
Carlos Baca
Investor Relations Manager0yrsno datano data
Linda Desaulniers
Legal Counsel1.4yrsno datano data
David Volkert
Vice President of Exploration3.5yrsUS$753.10k0.038% $294.2k
Sally Whittall
Corporate Secretary0yrsno data0.022% $173.6k

3.5yrs

Average Tenure

56yo

Average Age

Experienced Management: FVI's management team is considered experienced (3.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jorge A. Ganoza Durant
President11.5yrsUS$5.53m0.49% $3.8m
Mario Szotlender
Co-Founder & Director11.7yrsUS$225.30k0.16% $1.2m
Simon T. Ridgway
Chairman of the Board13.7yrsUS$297.30k0.00035% $2.7k
David Farrell
Lead Director0yrsUS$192.36kno data
David Laing
Independent Director3.4yrsUS$157.86kno data
Kylie Dickson
Independent Director2.5yrsUS$166.78kno data
Alfredo Arturo Sillau Valdez
Independent Director3.3yrsUS$161.36k0.010% $80.7k

7.5yrs

Average Tenure

52yo

Average Age

Experienced Board: FVI's board of directors are considered experienced (7.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$783.826m
  • 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 principal properties include the Caylloma silver, lead, and zinc mine located in southern Peru; the San Jose silver-gold mine located in southern Mexico; and the Lindero gold project located in Argentina. The company was formerly known as Fortuna Ventures Inc. and changed its name to Fortuna Silver Mines Inc. in June 2005. Fortuna Silver Mines Inc. was incorporated in 1990 and is based in Vancouver, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 00:35
End of Day Share Price2020/02/18 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.