Is Avino Silver & Gold Mines a Bargain After a 369.8% Rally and Exploration News?

• Wondering whether Avino Silver & Gold Mines is trading at a bargain or starting to look a bit overheated? You are not alone, and the numbers might surprise you.

• The stock has been on a tear, climbing 369.8% year-to-date and boasting a staggering 273.1% return over the last year. This comes even after a recent 14.1% dip in the past month.

• These wild swings have caught the attention of investors, especially following announcements about expanded exploration programs and new resource estimates at their flagship project. Updates around silver production forecasts and commitments to ramp up future operations have fueled both excitement and headlines.

• Despite the buzz, Avino Silver & Gold Mines earns a valuation score of 2 out of 6 on our checklist. Let us break down how that score is calculated and explore why, at the end of the day, there may be an even more insightful way to judge if it is good value.

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

The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting expected future cash flows and discounting them back to today’s value. This method aims to capture the potential worth of Avino Silver & Gold Mines based on what it can reasonably be expected to earn in the future.

For Avino Silver & Gold Mines, the latest reported Free Cash Flow stands at $16.76 Million. Over the next decade, forecasts suggest strong growth, with FCF projections reaching over $191 Million by 2035. Most analyst estimates extend only a few years out, but further growth numbers are extrapolated using available industry data. These figures paint a picture of robust scaling in the company’s operations and cash generation capability.

Putting all the numbers together, the model arrives at an intrinsic value of $31.17 per share. Compared to the current trading price, Avino Silver & Gold Mines appears to be trading at a 79.1% discount relative to its estimated fair value. This suggests the stock is significantly undervalued according to this approach.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Avino Silver & Gold Mines is undervalued by 79.1%. Track this in your watchlist or portfolio, or discover 840 more undervalued stocks based on cash flows.

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

For a profitable company like Avino Silver & Gold Mines, the Price-to-Earnings (PE) ratio is a widely used and effective tool to assess valuation. This metric helps investors compare a company’s market price with its per-share earnings, offering a snapshot of how much the market is willing to pay for each dollar of profit.

It is important to note that what counts as a “normal” or “fair” PE ratio can vary, depending largely on factors like expected earnings growth and business risk. Higher growth prospects or lower risk tend to justify a higher PE, while weaker outlooks or higher risk bring the number down.

Currently, Avino Silver & Gold Mines trades at a PE ratio of 47.33x. Compared to the Metals and Mining industry average of 20.92x and peer average of -0.29x, Avino’s PE stands out as notably higher. However, raw comparisons like these can be misleading, since they do not take into account the company’s unique profile and prospects.

This is where Simply Wall St’s “Fair Ratio” comes in. It is a proprietary benchmark that determines what an appropriate PE should be for Avino, factoring in growth rates, profit margins, risks, market cap and the broader industry landscape. For Avino, the Fair Ratio is calculated at 24.24x. Because this comprehensive measure considers so many variables, it provides a much more insightful gauge of whether the stock’s price makes sense.

Comparing Avino’s actual PE of 47.33x to its Fair Ratio of 24.24x, the current valuation looks significantly higher than what fundamentals would justify. Based on this approach, Avino Silver & Gold Mines appears to be overvalued at its current price.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1414 companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is a way for investors to link a company’s story, including what they believe about its strengths, opportunities, and risks, directly to a clear financial forecast and a resulting fair value. With Narratives, you combine your perspective on key drivers like future revenue, margins, and industry events with the hard numbers, painting a holistic, story-backed picture of what you think the company is truly worth.

Simply Wall St makes this accessible for everyone. On the Community page, investors can craft and share live Narratives, see those of others, and easily compare their fair value estimates to the real-time share price. Narratives help you make more confident buy or sell decisions, because you are seeing not just the numbers, but the logic and beliefs behind them. These Narratives also auto-update when news or earnings releases change the landscape.

For example, one investor who expects silver to reach $100/oz and gold $3,500/oz has built a Narrative projecting Avino’s share price above $19, while another, more cautious Narrative values the company closer to CA$4.25. This shows just how much the story you believe can affect what you think is fair value.

For Avino Silver & Gold Mines, we’ll make it easy for you with previews of two leading Avino Silver & Gold Mines Narratives:

• 🐂 Avino Silver & Gold Mines Bull Case

  Fair Value: $26.79

  Current discount: 75.6%

  Projected Revenue Growth: 78.01%

  • Projects a path to $20+ per share by 2026, based on much higher gold and silver prices and ramp-up at new projects like La Preciosa.

  • Highlights strong financials in 2024, record silver and gold output, debt-free status, and ambitions to become an intermediate producer while leveraging low costs and expanding resources.

  • Identifies bullish scenarios tied to commodity prices, but also outlines risks such as cost inflation, potential regulatory hurdles, and operational execution at new mines.

• 🐻 Avino Silver & Gold Mines Bear Case

  Fair Value: CA$5.30

  Current premium: 23.2%

  Projected Revenue Growth: 21.92%

  • Warns that recent optimism may be overestimating sustained demand and pricing power for silver, and that future profitability could face pressure from rising costs and operational risks.

  • Emphasizes that future growth is highly dependent on successful expansion projects, leaving earnings exposed to single-region and project risks.

  • Analyst consensus sees a lower fair value than the current price, suggesting that even if the business improves, current expectations may be too high relative to future fundamental earnings growth and margins.

Do you think there’s more to the story for Avino Silver & Gold Mines? 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.

Companies discussed in this article include ASM.TO.

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