Things To Be Wary Of When Buying Wheaton Precious Metals Stock

‘Wheaton Precious Metals (NYSE:WPM) stock looks attractive but volatile – making it a tricky pick to buy at its current price of around $76. We believe there is minimal cause for concern with WPM stock, which makes it attractive but highly sensitive to adverse events as its current valuation is extremely high.

We arrive at our conclusion by comparing the current valuation of WPM stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Wheaton Precious Metals along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a very strong operating performance and financial condition, as detailed below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

How Does Wheaton Precious Metals’ Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, WPM stock looks very expensive compared to the broader market.

• Wheaton Precious Metals has a price-to-sales (P/S) ratio of 30.5 vs. a figure of 2.8 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 39.1 compared to 17.6 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 56.0 vs. the benchmark’s 24.5

How Have Wheaton Precious Metals’ Revenues Grown Over Recent Years?

Wheaton Precious Metals’ Revenues have seen notable growth over recent years.

• Wheaton Precious Metals has seen its top line grow at an average rate of 2.0% over the last 3 years (vs. increase of 6.2% for S&P 500)
• Its revenues have grown 29.7% from $1.0 Bil to $1.3 Bil in the last 12 months (vs. growth of 5.3% for S&P 500)
• Also, its quarterly revenues grew 38.1% to $381 Mil in the most recent quarter from $313 Mil a year ago (vs. 4.9% improvement for S&P 500)

How Profitable Is Wheaton Precious Metals?

Wheaton Precious Metals’ profit margins are considerably higher than most companies in the Trefis coverage universe.

• Wheaton Precious Metals’ Operating Income over the last four quarters was $669 Mil, which represents a considerably high Operating Margin of 55.0% (vs. 13.1% for S&P 500)
• Wheaton Precious Metals’ Operating Cash Flow (OCF) over this period was $950 Mil, pointing to a considerably high OCF Margin of 78.1% (vs. 15.7% for S&P 500)
• For the last four-quarter period, Wheaton Precious Metals’ Net Income was $609 Mil – indicating a considerably high Net Income Margin of 50.1% (vs. 11.3% for S&P 500)

Does Wheaton Precious Metals Look Financially Stable?

Wheaton Precious Metals’ balance sheet looks strong.

• Wheaton Precious Metals’ Debt figure was $5.7 Mil at the end of the most recent quarter, while its market capitalization is $36 Bil (as of 5/13/2025). This implies a very strong Debt-to-Equity Ratio of 0.0% (vs. 21.5% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $818 Mil of the $7.4 Bil in Total Assets for Wheaton Precious Metals.  This yields a moderate Cash-to-Assets Ratio of 9.4% (vs. 15.0% for S&P 500)

How Resilient Is WPM Stock During A Downturn?

WPM stock has been more resilient than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Inflation Shock (2022)

• WPM stock fell 43.8% from a high of $51.71 on 20 April 2022 to $29.08 on 26 September 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 13 April 2023
• Since then, the stock has increased to a high of $85.77 on 11 May 2025 and currently trades at around $76

Covid Pandemic (2020)

• WPM stock fell 28.7% from a high of $33.30 on 24 February 2020 to $23.74 on 19 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 13 April 2020

Global Financial Crisis (2008)

• WPM stock fell 86.7% from a high of $19.50 on 14 March 2008 to $2.59 on 20 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 30 April 2010

Putting All The Pieces Together: What It Means For WPM Stock

In summary, Wheaton Precious Metals’ performance across the parameters detailed above are as follows:

• Growth: Very Strong
• Profitability: Extremely Strong
• Financial Stability: Very Strong
• Downturn Resilience: Strong
• Overall: Very Strong

Hence, despite its extremely high valuation, the stock appears attractive but volatile, which supports our conclusion that WPM is a tricky stock to buy.

Not too happy about the volatile nature of WPM stock? The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. 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.