Is It Too Late To Consider Endeavour Silver (TSX:EDR) After Its 195% One Year Surge

• If you are wondering whether Endeavour Silver at $13.82 is still offering value after its recent run, the starting point is to understand what the current price actually implies.
• The stock has recorded returns of 10.2% over the last 7 days, 3.6% over 30 days, 11.4% year to date, 194.7% over 1 year and 197.8% over 3 years, with a 5 year return of 102.9%. This naturally raises questions about how much of the story is already priced in.
• Recent coverage has focused on Endeavour Silver as investors look for ways to position within precious metals stocks, which has kept the stock on many watchlists. At the same time, broader sector attention and changing risk appetite in resources have added extra context to these price moves for anyone thinking about valuation.
• On Simply Wall St’s 6 point valuation checklist, Endeavour Silver currently scores 3 out of 6. The rest of this article will break down what different valuation approaches say about that score and then finish with a way to link those numbers back to the broader investment story.

Endeavour Silver delivered 194.7% returns over the last year. See how this stacks up to the rest of the Metals and Mining industry.

Approach 1: Endeavour Silver Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting the company’s future cash flows and discounting them back to today’s value using a required rate of return.

For Endeavour Silver, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is a loss of $208.7 million, so the valuation leans heavily on expectations for future free cash flow. Analyst inputs extend to a few years ahead, with Simply Wall St extrapolating further out. Within the ten year projection set, free cash flow for 2028 is estimated at $242.3 million, with discounted values stepping down in later years as growth assumptions moderate.

On this basis, the DCF model arrives at an estimated intrinsic value of $6.93 per share. Compared with the current share price of CA$13.82, this implies the stock is around 99.5% overvalued on this particular set of cash flow assumptions and discount rates.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Endeavour Silver may be overvalued by 99.5%. Discover 7 high quality undervalued stocks or create your own screener to find better value opportunities.

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

Approach 2: Endeavour Silver Price vs Sales

For companies where earnings can be volatile or negative, the P/S ratio is often a more useful yardstick because it compares the stock price with revenue rather than profit, which can be more stable in resource businesses.

What counts as a reasonable P/S depends on how quickly revenue is expected to grow and how risky the business is. Higher growth and lower perceived risk can support a higher multiple, while slower growth and higher risk usually align with a lower multiple.

Endeavour Silver currently trades on a P/S of 4.88x. That is below the Metals and Mining industry average P/S of 6.45x and below the peer group average of 9.82x. Simply Wall St’s Fair Ratio for Endeavour Silver is 4.24x, which is a proprietary estimate of the P/S multiple that might be appropriate given factors such as growth outlook, profit margins, industry, market cap and company specific risks.

This Fair Ratio is more tailored than a simple comparison with peers or the broad industry because it adjusts for those company specific characteristics rather than assuming all miners should trade on the same multiple. With the actual P/S at 4.88x versus a Fair Ratio of 4.24x, the stock screens as somewhat expensive on this measure.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Endeavour Silver Narrative

Earlier it was mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives, where you tell your story for Endeavour Silver by linking your assumptions about its future revenue, earnings and margins to a forecast and a fair value. You can then compare that fair value with the current price to decide whether the stock looks attractive or expensive to you. This is all done within an easy tool on the Community page that updates as new news or earnings arrive. One investor might build a very optimistic Endeavour Silver Narrative with high silver price and production assumptions and a fair value closer to CA$85.77 per share, while another might build a more cautious Narrative that lines up with bearish analyst targets around CA$12.50.

For Endeavour Silver however, we will make it really easy for you with previews of two leading Endeavour Silver Narratives:

These are built by real investors using their own assumptions, so you can sense check which one feels closer to your view and then adjust the inputs yourself on the Community page.

🐂 Endeavour Silver Bull Case

Narrative fair value: CA$85.77

Current price vs this fair value: around 83.9% below the narrative fair value

Assumed revenue growth rate: 84.79%

• Assumes very high silver prices, for example scenarios that include US$100 to US$150 per ounce and higher, combined with production of around 9 million ounces a year or more after Terronera ramps up.
• Applies strong free cash flow margins and a 10x or higher free cash flow multiple, which supports multi billion dollar market value outcomes and fair values such as CA$85.77 per share in the higher price scenarios.
• Views Endeavour Silver as a scaled producer after Terronera and other assets are contributing, with high leverage to silver and gold prices and the potential for a material re rating if those assumptions play out.

🐻 Endeavour Silver Bear Case

Narrative fair value: CA$12.50

Current price vs this fair value: around 10.6% above the narrative fair value

Assumed revenue growth rate: 28.56%

• Builds in 28.6% annual revenue growth and a move from a current loss to earnings of US$169.1 million by around January 2029, but pairs that with concerns about higher all in sustaining costs and execution risk at Terronera, Kolpa and Pitarrilla.
• Uses a 24.0x P/E on those 2029 earnings, which is higher than the cited US Metals and Mining industry P/E of 22.6x and assumes ongoing share count growth of 7.0% a year for the next three years.
• Arrives at a CA$12.50 fair value that sits at the low end of the analyst range, implying that at around CA$13.82 today, the stock could already be pricing in most of that more cautious earnings path.

If neither preview feels quite right, there are four Endeavour Silver Narratives in total, with three leaning toward an undervalued stance and one toward an overvalued stance, so you can benchmark your own expectations against a range of detailed scenarios before deciding how, or whether, to position around the stock.

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Endeavour Silver 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 Endeavour Silver? 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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