Is It Time To Reassess Avino Silver & Gold Mines (TSX:ASM) After The Recent Share Price Slide

• If you are wondering whether Avino Silver & Gold Mines stock offers value at current levels, it helps to line up the recent share price moves with what the underlying valuation signals are actually saying.
• The stock last closed at US$7.64, with the price falling 19.3% over the past week and 25.7% over the past month, while still showing a 60.2% gain over the last year and a very large 3 year return of around 7x.
• Recent coverage has focused on Avino Silver & Gold Mines as part of broader discussions around silver and gold producers, which often ties into changing expectations for precious metals and capital allocation in the sector. This backdrop helps explain why the stock has seen sharp short term moves even as its multi year return remains very large.
• Right now the company carries a valuation score of 2 out of 6. The rest of this article will walk through what different valuation methods say about the stock, and then finish with a way to put those numbers in a broader context.

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

Approach 1: Avino Silver & Gold Mines Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company might be worth by projecting its future cash flows and discounting them back to today’s value. For Avino Silver & Gold Mines, the model used here is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections.

The latest free cash flow stands at about $20.43 million. Using analyst estimates for the early years and then extrapolating further, Simply Wall St projects free cash flow rising to about $108.21 million in 2035, with each year between 2026 and 2035 assigned a specific estimate and discount factor. These projected cash flows are then discounted and combined with a terminal value to arrive at an estimated intrinsic value of $13.10 per share.

Compared with the recent share price of US$7.64, this DCF output suggests the stock trades at roughly a 41.7% discount to that intrinsic value, which indicates Avino Silver & Gold Mines appears materially undervalued on this model alone.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Avino Silver & Gold Mines is undervalued by 41.7%. Track this in your watchlist or portfolio, or discover 9 more high quality undervalued stocks.

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.

Approach 2: Avino Silver & Gold Mines Price vs Earnings (P/E)

For profitable companies, the P/E ratio is a useful way to see how much investors are paying for each dollar of earnings. Higher growth expectations and lower perceived risk usually support a higher P/E, while lower growth or higher risk tend to justify a lower, more conservative multiple.

Avino Silver & Gold Mines currently trades on a P/E of 25.24x. That is above the Metals and Mining industry average P/E of 13.61x and also above the peer average of 13.32x. This signals that the stock is priced higher than many sector peers on reported earnings.

Simply Wall St’s Fair Ratio for Avino Silver & Gold Mines is 19.92x. This is a proprietary estimate of what a reasonable P/E could be, given factors such as the company’s earnings growth profile, industry, profit margins, market cap and specific risks. Because it adjusts for these company level characteristics, the Fair Ratio can give a more tailored reference point than a simple comparison with peers or the broader industry.

Comparing the current P/E of 25.24x with the Fair Ratio of 19.92x suggests the stock trades above this Fair Ratio benchmark. This points to the shares looking overvalued on this metric alone.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Avino Silver & Gold Mines Narrative

Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced as a simple way for you to attach a clear story about Avino Silver & Gold Mines to the numbers, connecting your view on future revenue, earnings and margins to a Fair Value that you can compare with the current share price.

On Simply Wall St’s Community page, Narratives let you set out your assumptions and see a full forecast that updates automatically when fresh information like news or earnings is added. This helps your Fair Value view stay aligned with what is happening at the company.

For Avino Silver & Gold Mines, one investor might build a very optimistic Narrative around a scenario where silver reaches $100 per ounce and production reaches 7,000,000 silver equivalent ounces, which leads to a Fair Value of about $89.00 per share. Another investor might use a more cautious Narrative that aligns with a Fair Value of CA$4.25. Both can then compare their Fair Value to the current market price to decide whether the stock looks attractive or expensive based on their own story.

For Avino Silver & Gold Mines however we will make it really easy for you with previews of two leading Avino Silver & Gold Mines Narratives:

🐂 Avino Silver & Gold Mines Bull Case

Fair Value: CA$89.00 per share

Implied undervaluation vs last close: about 91.4% below this fair value

Assumed revenue growth: 137.49%

• Assumes silver at US$100 per ounce and Avino reaching 7,000,000 silver equivalent ounces of production.
• Uses an all in sustaining cost assumption of US$30 per ounce, which results in high free cash flow in the scenario.
• Applies free cash flow multiples to arrive at fair value estimates that are much higher than the recent share price.

🐻 Avino Silver & Gold Mines Bear Case

Fair Value: CA$4.25 per share

Implied overvaluation vs last close: about 79.8% above this fair value

Assumed revenue growth: 3.78%

• Focuses on risks tied to asset concentration in Mexico, regulatory pressure and finite resources that could affect long term margins.
• Builds in moderate revenue growth and higher future profit margins, but pairs this with a lower future P/E multiple than today.
• Arrives at a fair value that sits well below the recent share price, reflecting concern that current expectations may be too optimistic.

These two Narratives sit at opposite ends of the current range. If you want to test your own view against them and see the detailed forecasts side by side, you can start with the full set of community Narratives for Avino Silver & Gold Mines and then adjust the inputs to match your own assumptions.To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Avino Silver & Gold Mines on Simply Wall St. Add the company to your watchlist or portfolio so you’ll be alerted when the story evolves.

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.

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