Is Wall Street Underestimating Coeur Mining Stock’s Potential?

We think Coeur Mining (CDE) stock deserves consideration as a value stock. It is currently trading nearly 32% below its 1 year high, and also trading at a PS multiple which is below the average for the last 3 years. However, it has reasonable revenue growth and strong margins to go with its modest valuation.

Here is what’s going well for the company: Higher metal prices, with gold nearing $4,000/oz and silver exceeding $33/oz, coupled with improved operational efficiencies and lower unit costs at key mines like Rochester and Wharf, are bolstering margins. Recent production increases across all operations and the planned acquisition of New Gold will significantly boost future gold, silver, and copper output. However, a broader decline in precious metals prices and market skepticism around the acquisition contributed to the valuation discount, alongside ongoing needs for reserve replacement.

So what does this translate to? Let’s talk numbers

• Reasonable Revenue Growth: 68.3% LTM and 32.6% last 3 year average.
• Strong Margin: Nearly 14.5% 3-year average operating margin.
• No Major Margin Shock: Coeur Mining has avoided any large margin collapse in the last 12 months.
• Modest Valuation: Despite encouraging fundamentals, CDE stock trades at a PE multiple of 24.4

Why focus on valuation and margin? Buying stocks with low valuations or trading well below their peaks but maintaining strong margins allows investors to capture mean reversion and valuation re-rating potential. The downside risk is potentially less because high-margin businesses can sustain earnings and recover faster when sentiment or market conditions improve. Below is quick comparison of CDE valuation, margin and other fundamentals with S&P median.

LTM: Last Twelve Months

For more details and our view, see Buy or Sell CDE Stock. If you seek an upside with less volatility than a single stock, consider the High Quality Portfolio (HQ) – HQ has outperformed its benchmark – a combination of S&P 500, Russell, and S&P midcap index, and achieved returns exceeding 105% since its inception.

Evidence Of Outperformance Of Value-Margin Play

Below are statistics for stocks with same selection strategy applied between 12/31/2016 and 6/30/2025.

• Average 6-month and 12-month forward returns of 12.7% and 25.8% respectively
• Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods
• Strategy consistent across market cycles.

There is no guarantee that the market will always reward such value stocks, so useful to ask – what is the risk?

Risk Quantified

CDE isn’t immune to big drops. It fell nearly 89% in the Dot-Com Bubble and over 93% during the Global Financial Crisis. The 2018 Correction and Inflation Shock also hit hard, with declines around 77% and 82%, respectively. Even the Covid selloff took it down by about 68%. Strong fundamentals matter, but when panic hits, steep losses can happen.

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read CDE Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.