SSR Mining Soars 293% Amid Gold Rally: Does the Surge Reflect Its True Value?

• Ever wondered if SSR Mining might be a hidden gem or if the market has already priced in its true worth? Let's dig into what makes this stock worth a closer look, especially if you're eyeing value opportunities in the materials sector.
• SSR Mining's stock has surged impressively, climbing 5.6% over the last week and an astonishing 293.2% over the past year. This signals fresh investor interest and potentially shifting risk perceptions.
• Recent headlines attribute part of this rally to rising gold prices and growing interest in commodities. Several analysts highlight SSR Mining's strategic acquisitions and exploration successes as significant factors driving sentiment. The company has also been in the spotlight for operational updates and industry partnerships that could shape its long-term growth path.
• Our preliminary valuation checks score SSR Mining a 3 out of 6, meaning it appears undervalued on three key measures. See the full breakdown here. In the sections ahead, we’ll walk through these valuation approaches and reveal an even more insightful way to understand what SSR Mining is really worth.

SSR Mining delivered 293.2% returns over the last year. See how this stacks up to the rest of the Metals and Mining industry.

Approach 1: SSR Mining Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by forecasting its future cash flows and then discounting them back to their value today. For SSR Mining, this approach uses a 2 Stage Free Cash Flow to Equity model, blending analyst estimates with long-term projections.

SSR Mining’s latest trailing twelve month Free Cash Flow stands at $179.3 Million. Analysts provide annual cash flow forecasts for the next several years, with Simply Wall St extrapolating beyond analyst consensus for longer-term projections. According to these calculations, the company’s Free Cash Flow is expected to grow, reaching around $1.03 Billion by 2035.

Based on these projections, the DCF model computes an intrinsic value per share of $110.94. Compared to current share prices, this suggests that SSR Mining is trading at a substantial 71.3% discount. This valuation method signals that the stock is significantly undervalued at its present levels.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests SSR Mining is undervalued by 71.3%. Track this in your watchlist or portfolio, or discover 927 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 SSR Mining.

Approach 2: SSR Mining Price vs Earnings

The Price-to-Earnings (PE) ratio is a popular way to value profitable companies because it captures how much investors are willing to pay for each dollar of earnings. For a company like SSR Mining, which generates consistent profits, the PE ratio serves as a useful snapshot of current valuation sentiment.

It is important to keep in mind that an appropriate or “fair” PE ratio depends on several factors, including a company’s expected earnings growth and its perceived risk profile. Generally, companies with stronger growth prospects or lower risks can justify higher PE multiples, while slower growth or elevated risks typically result in a lower ratio.

SSR Mining currently trades at a PE ratio of 20.9x. This is slightly above the Metals and Mining industry average of 19.6x, and just above the average of its direct peers at 20.1x. However, Simply Wall St’s proprietary Fair Ratio for SSR Mining is calculated at 39.4x. This Fair Ratio incorporates not only growth forecasts and risks, but also factors like profit margins, market capitalisation, and industry dynamics. This makes it a more holistic measure than simply comparing with peers or the sector.

Because SSR Mining’s current PE sits well below its Fair Ratio, this comparison suggests the market is undervaluing the company relative to its true earnings power and potential.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1433 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your SSR Mining Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. This is a simple, yet dynamic approach that lets you tell your story behind the numbers for a company like SSR Mining.

A Narrative is your perspective. You combine what you believe about the company’s future with your own fair value, revenue, earnings, and margin forecasts, creating a story that ties business insights directly to financial outcomes.

This approach powerfully connects a company's outlook to a financial forecast and, ultimately, a fair value. It allows you to see how your investment thesis translates into a buying or selling opportunity.

Narratives are especially easy to use on Simply Wall St's platform, where millions of investors create and update their views in the Community page, helping everyone spot opportunities or risks as soon as new information or earnings emerge.

By using Narratives, you can quickly compare your fair value with the latest share price. This allows you to decide whether SSR Mining is a buy, hold, or sell based on your own convictions, rather than just market sentiment.

For example, some investors using Narratives for SSR Mining believe the company could be worth as much as CA$38.96 per share (driven by sustained high gold prices and operational improvements), while others take a more cautious view, pegging fair value at just CA$14.72 due to regulatory and cost risks.

Do you think there's more to the story for SSR Mining? 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.