Value
7.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 4.8 |
| P/S | 6.7 |
| EV/EBITDA | 6.3 |
| Fwd P/E | 7.8 |
| PEG | 10.0 |
- ▸Forward P/E: 15.7x
- ▸PEG: 0.00
- ▸Attractively valued
AG · Why this verdict
Why First Majestic Silver (AG) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
First Majestic Silver shows 95% year-over-year revenue growth, exceptional free cash flow conversion, and an attractively valued multiple with 42% analyst upside, but high leverage at a debt-to-equity of 9.5 and a spotty earnings delivery record require caution before building a full position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With a near-zero PEG ratio and analysts projecting 42% upside to their consensus target of $22.84, the stock appears attractively valued relative to its earnings growth potential even at current prices. Sentiment breakdown | Price should move toward the $22.84 analyst consensus target over 12 months as revenue growth translates into earnings recognition. | ↓Deteriorating |
| CounterAnalyst coverage is light — only 2 covering analysts — which both inflates the stated upside and reduces its reliability, since a small-sample consensus can diverge sharply from fair value. | ||
Revenue has expanded 95% year-over-year, reflecting powerful operational momentum that puts the company among the fastest-growing names in its space on a trailing basis. Growth breakdown | Revenue growth should remain above 30% year-over-year for at least two consecutive quarters to sustain the growth thesis. | →Stable |
| CounterTwo of the four most recent quarterly earnings results were misses, suggesting the top-line strength is not yet translating reliably into earnings beats, and the most recent quarter fell short of estimates. | ||
Free cash flow is 223% of reported net income — an exceptional conversion rate indicating the business generates substantially more cash than its accounting earnings imply, which is a mark of real earnings quality. Quality breakdown | Free cash flow relative to net income should remain above 150% over the next four quarters, confirming the conversion premium is structural rather than a one-period anomaly. | →Stable |
| CounterVery high free-cash-flow-to-net-income ratios in materials businesses can reflect timing differences — such as deferred investment activity — rather than sustainable conversion; if capital reinvestment resumes, the ratio may normalize sharply. | ||
A debt-to-equity ratio of 9.5 is flagged as a material negative — a leverage burden that reduces financial flexibility and amplifies downside risk if cash generation softens from its currently elevated level. Bear case | Leverage concern diminishes if the debt-to-equity ratio declines below 5.0 over the next 12 months through earnings-driven deleveraging. | ↑Improving |
| CounterThe exceptional free cash flow conversion of 223% provides a meaningful cushion to service debt and could accelerate deleveraging if sustained — high current leverage may be a temporary feature of the company's growth phase rather than a permanent structural constraint. | ||
Two of the four most recent quarters missed consensus estimates, and the most recent quarter fell short by 2.4%, creating uncertainty about whether strong revenue growth will translate into reliable positive surprises. Earnings | Earnings delivery improves if the next two quarters both beat consensus estimates by more than 5%. | ↓Deteriorating |
| CounterOne of the four quarters produced a 30% upside surprise, demonstrating the company is capable of significant beats when conditions align — the mixed track record may reflect volatile production costs rather than a fundamental execution problem. | ||
With a near-zero PEG ratio and analysts projecting 42% upside to their consensus target of $22.84, the stock appears attractively valued relative to its earnings growth potential even at current prices.
↓DeterioratingSentiment breakdown
- Expectation
- Price should move toward the $22.84 analyst consensus target over 12 months as revenue growth translates into earnings recognition.
CounterAnalyst coverage is light — only 2 covering analysts — which both inflates the stated upside and reduces its reliability, since a small-sample consensus can diverge sharply from fair value.
Revenue has expanded 95% year-over-year, reflecting powerful operational momentum that puts the company among the fastest-growing names in its space on a trailing basis.
→StableGrowth breakdown
- Expectation
- Revenue growth should remain above 30% year-over-year for at least two consecutive quarters to sustain the growth thesis.
CounterTwo of the four most recent quarterly earnings results were misses, suggesting the top-line strength is not yet translating reliably into earnings beats, and the most recent quarter fell short of estimates.
Free cash flow is 223% of reported net income — an exceptional conversion rate indicating the business generates substantially more cash than its accounting earnings imply, which is a mark of real earnings quality.
→StableQuality breakdown
- Expectation
- Free cash flow relative to net income should remain above 150% over the next four quarters, confirming the conversion premium is structural rather than a one-period anomaly.
CounterVery high free-cash-flow-to-net-income ratios in materials businesses can reflect timing differences — such as deferred investment activity — rather than sustainable conversion; if capital reinvestment resumes, the ratio may normalize sharply.
A debt-to-equity ratio of 9.5 is flagged as a material negative — a leverage burden that reduces financial flexibility and amplifies downside risk if cash generation softens from its currently elevated level.
↑ImprovingBear case
- Expectation
- Leverage concern diminishes if the debt-to-equity ratio declines below 5.0 over the next 12 months through earnings-driven deleveraging.
CounterThe exceptional free cash flow conversion of 223% provides a meaningful cushion to service debt and could accelerate deleveraging if sustained — high current leverage may be a temporary feature of the company's growth phase rather than a permanent structural constraint.
Two of the four most recent quarters missed consensus estimates, and the most recent quarter fell short by 2.4%, creating uncertainty about whether strong revenue growth will translate into reliable positive surprises.
↓DeterioratingEarnings
- Expectation
- Earnings delivery improves if the next two quarters both beat consensus estimates by more than 5%.
CounterOne of the four quarters produced a 30% upside surprise, demonstrating the company is capable of significant beats when conditions align — the mixed track record may reflect volatile production costs rather than a fundamental execution problem.
Per-dimension breakdown
Quality
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.8 |
| ROA | 5.3 |
| Gross margin | 7.9 |
| Op margin | 10.0 |
| Net margin | 9.8 |
| Current ratio | 9.2 |
| FCF quality | 10.0 |
| Moat | 7.9 |
| Piotroski F | 10.0 |
- ▸Strong margins: 20%
- ▸Excellent cash conversion: 223% FCF/NI
- ▸Wide economic moat
- ▸Strong Piotroski F-Score: 9/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 95% YoY
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.3 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 3.5 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+6.1%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.5 |
| Analyst rating | 5.9 |
| Price target | 9.6 |
- ▸Light analyst coverage (2.0) — signal dampened
- ▸Analyst upside: 53%
Insider
5.0/10data confidence 50%Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.5 |
| quality rank | 5.0 |
| growth rank | 0.0 |
Technical
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.9 |
| support resistance | 8.2 |
| 52w position | 0.0 |
| gap | 6.0 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 9.5 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| max pain risk | 7.0 |
| beta | 3.0 |
| debt equity | 9.6 |
| news risk | 5.5 |
- ▸High IV: 84%
Catalyst
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 1.9 |
| dividend safety | 6.8 |
| news activity | 5.0 |
- ▸Earnings concerns: 1B/2M
- ▸Earnings in 10 days
How the verdict was assembled
Engine trigger
Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 0.00, quality 8.2/10, growth 10.0/10). | News modifier -1 (STRONG_BUY_WAIT → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|L3:NEWS_MOD=-1Passed (5)
- ASYMMETRY:2.4>=1.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.5<4.5
Warning (1)
- EARNINGS_PROXIMITY:10d<=14d (soft)
Reward-to-Risk
2.39
Upside
+30.4%
Downside
12.7%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeTemporary headwind — High quality (8.2) with weak momentum (3.5)
SuitabilitySpeculative — Drawdown -51% (>40% off 52w high)
Investment implication
The C-path quality+growth combination triggered the HOLD_IF_HOLDING verdict: quality 8.2 and growth 10.0 both clear their thresholds, with asymmetric R:R of 2.39 supporting the read.
The strongest dimensions are Growth at 10.0, Quality at 8.2, and Value at 7.7; the weakest are Momentum at 3.5, Peer rank at 3.9, and Catalyst at 4.1. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 2.39 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Revenue Growth
Trip ifRevenue growth falls below 30% year-over-year for 2 consecutive quarters.
- P2Exceptional Cash Conversion
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters.
- P3Attractive Valuation With Analyst Upside
Trip ifPrice exceeds $22.84 (the analyst consensus target), confirming the valuation gap has closed.
- P4High Leverage Overhang
Trip ifDebt-to-equity ratio falls below 5.0 from current 9.5, reducing the leverage overhang materially.
- P5Earnings Delivery Uncertainty
Trip ifEPS surprise exceeds 5% for 2 consecutive quarters, demonstrating reliable delivery against estimates.