Hudbay Minerals (TSX:HBM) - Share price, News & Analysis

Q: What is the Fair Price of HBM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

HBM (CA$5.68) is trading above our estimate of [[fair value]] (CA$0.15)

HBM fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	2/6
Past Performance	0/6
Financial Health	3/6
Dividends	0/6

HBM Stock Overview

Hudbay Minerals Inc., a diversified mining company, together with its subsidiaries, focuses on the discovery, production, and marketing of base and precious metals in North and South America.

Risk Analysis

No risks detected for HBM from our risk checks.

Hudbay Minerals Competitors

Altius Minerals

TSX:ALS

CA$854.6m

Major Drilling Group International

TSX:MDI

CA$767.2m

Largo

TSX:LGO

CA$627.2m

Turquoise Hill Resources

TSX:TRQ

CA$6.0b

Price History & Performance

Summary of all time highs, changes and price drops for Hudbay Minerals
Historical stock prices
Current Share Price	CA$5.68
52 Week High	CA$11.17
52 Week Low	CA$4.07
Beta	1.93
1 Month Change	33.65%
3 Month Change	-22.93%
1 Year Change	-28.73%
3 Year Change	29.98%
5 Year Change	-45.28%
Change since IPO	170.45%

Recent News & Updates

Aug 10

Here's What's Concerning About Hudbay Minerals' (TSE:HBM) Returns On Capital

When researching a stock for investment, what can tell us that the company is in decline? Typically, we'll see the...

Shareholder Returns

	HBM	CA Metals and Mining	CA Market
7D	11.2%	0.9%	2.5%
1Y	-28.7%	-14.4%	1.0%

Return vs Industry: HBM underperformed the Canadian Metals and Mining industry which returned -14.3% over the past year.

Return vs Market: HBM underperformed the Canadian Market which returned 0.7% over the past year.

Price Volatility

Is HBM's price volatile compared to industry and market?
HBM volatility
HBM Average Weekly Movement	10.0%
Metals and Mining Industry Average Movement	11.5%
Market Average Movement	10.6%
10% most volatile stocks in CA Market	18.9%
10% least volatile stocks in CA Market	4.3%

Stable Share Price: HBM is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: HBM's weekly volatility (10%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1927	n/a	Peter Gerald Kukielski	https://www.hudbayminerals.com

Hudbay Minerals Inc., a diversified mining company, together with its subsidiaries, focuses on the discovery, production, and marketing of base and precious metals in North and South America. It produces copper concentrates containing copper, gold, and silver; silver/gold doré; molybdenum concentrates; and zinc metals. The company owns three polymetallic mines, four ore concentrators, and a zinc production facility in northern Manitoba and Saskatchewan, Canada, as well as in Cusco, Peru; and copper projects in Arizona and Nevada, the United States.

Hudbay Minerals Fundamentals Summary

How do Hudbay Minerals's earnings and revenue compare to its market cap?
HBM fundamental statistics
Market Cap	US$1.15b
Earnings (TTM)	-US$84.90m
Revenue (TTM)	US$1.58b

0.7x

P/S Ratio

-13.6x

P/E Ratio

Is HBM overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
HBM income statement (TTM)
Revenue	US$1.58b
Cost of Revenue	US$876.59m
Gross Profit	US$701.61m
Other Expenses	US$786.52m
Earnings	-US$84.90m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-0.32
Gross Margin	44.46%
Net Profit Margin	-5.38%
Debt/Equity Ratio	73.8%

How did HBM perform over the long term?

See historical performance and comparison

Dividends

0.4%

Current Dividend Yield

-5%

Payout Ratio

Does HBM pay a reliable dividends?

See HBM dividend history and benchmarks

When do you need to buy HBM by to receive an upcoming dividend?
Hudbay Minerals dividend dates
Ex Dividend Date	Sep 01 2022
Dividend Pay Date	Sep 23 2022
Days until Ex dividend	15 days
Days until Dividend pay date	37 days

Does HBM pay a reliable dividends?

See HBM dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is HBM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HBM?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for HBM. This is calculated by dividing HBM's market cap by their current preferred multiple.
What is HBM's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$1.15b

HBM key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.4x
Enterprise Value/EBITDA	3.9x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does HBM's PS Ratio compare to its peers?

HBM PS Ratio vs Peers

The above table shows the PS ratio for HBM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	3.6x
ALS Altius Minerals	8.8x	-13.3%	CA$854.6m
MDI Major Drilling Group International	1.2x	10.7%	CA$767.2m
LGO Largo	2.1x	6.6%	CA$627.2m
TRQ Turquoise Hill Resources	2.4x	27.8%	CA$6.0b
HBM Hudbay Minerals	0.7x	-0.5%	CA$1.5b

Price-To-Sales vs Peers: HBM is good value based on its Price-To-Sales Ratio (0.7x) compared to the peer average (3.6x).

Price to Earnings Ratio vs Industry

How does HBM's PE Ratio compare vs other companies in the CA Metals and Mining Industry?

Price-To-Sales vs Industry: HBM is good value based on its Price-To-Sales Ratio (0.7x) compared to the Canadian Metals and Mining industry average (2.4x)

Price to Sales Ratio vs Fair Ratio

What is HBM's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HBM PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.7x
Fair PS Ratio	1.6x

Price-To-Sales vs Fair Ratio: HBM is good value based on its Price-To-Sales Ratio (0.7x) compared to the estimated Fair Price-To-Sales Ratio (1.6x).

Share Price vs Fair Value

What is the Fair Price of HBM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HBM (CA$5.68) is trading above our estimate of fair value (CA$0.15)

Significantly Below Fair Value: HBM is trading above our estimate of fair value.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Hudbay Minerals forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

0.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: HBM's forecast earnings growth (0.6% per year) is below the savings rate (1.6%).

Earnings vs Market: HBM is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: HBM is expected to become profitable in the next 3 years.

Revenue vs Market: HBM's revenue is expected to decline over the next 3 years (-0.5% per year).

High Growth Revenue: HBM's revenue is forecast to decline over the next 3 years (-0.5% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: HBM's Return on Equity is forecast to be low in 3 years time (2.5%).

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Past Performance

How has Hudbay Minerals performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-40.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HBM is currently unprofitable.

Growing Profit Margin: HBM is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: HBM is unprofitable, and losses have increased over the past 5 years at a rate of 40.8% per year.

Accelerating Growth: Unable to compare HBM's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: HBM is unprofitable, making it difficult to compare its past year earnings growth to the Metals and Mining industry (-15.8%).

Return on Equity

High ROE: HBM has a negative Return on Equity (-5.3%), as it is currently unprofitable.

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Financial Health

How is Hudbay Minerals's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: HBM's short term assets ($619.7M) exceed its short term liabilities ($439.4M).

Long Term Liabilities: HBM's short term assets ($619.7M) do not cover its long term liabilities ($2.3B).

Debt to Equity History and Analysis

Debt Level: HBM's net debt to equity ratio (57.7%) is considered high.

Reducing Debt: HBM's debt to equity ratio has increased from 61.3% to 73.8% over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable HBM has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: HBM is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by 35.6% per year.

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Dividend

What is Hudbay Minerals's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

0.35%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: HBM's dividend (0.35%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.82%).

High Dividend: HBM's dividend (0.35%) is low compared to the top 25% of dividend payers in the Canadian market (5.3%).

Stability and Growth of Payments

Stable Dividend: HBM is not paying a notable dividend for the Canadian market, therefore no need to check if payments are stable.

Growing Dividend: HBM is not paying a notable dividend for the Canadian market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: HBM is not paying a notable dividend for the Canadian market.

Cash Payout to Shareholders

Cash Flow Coverage: HBM is not paying a notable dividend for the Canadian market.

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Management

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

3.1yrs

Average management tenure

CEO

Peter Gerald Kukielski (66 yo)

3.08yrs

Tenure

US$3,690,389

Compensation

Mr. Peter Gerald Jan Kukielski, MSc, BSc serves as President and Chief Executive Officer of Hudbay Minerals Inc. since January 22, 2020. He had been Interim President of Hudbay Minerals Inc. since July 201...

CEO Compensation Analysis

Compensation vs Market: Peter Gerald's total compensation ($USD3.69M) is above average for companies of similar size in the Canadian market ($USD1.68M).

Compensation vs Earnings: Peter Gerald's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: HBM's management team is considered experienced (3.1 years average tenure).

Board Members

Experienced Board: HBM's board of directors are considered experienced (3.3 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: HBM 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.

Data	Last Updated (UTC time)
Company Analysis	2022/08/15 00:00
End of Day Share Price	2022/08/15 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31