Is MAG Silver Corp. (MAG) A Risky Investment?

SNOW Stock
SNOW Stock

MAG Silver Corp. (AMEX:MAG) finished Friday with an addition of $1.46 to close at $14.68, an upside of 11.04 percent. An average of 533,660 shares of common stock have been traded in the last five days. There was a gain of $1.64 in the past week, and it reached a new high 3 times over the past 12 months. The last 20 days have seen an average of 424,445 shares traded, while the 50-day average volume stands at 519,390.

MAG stock has increased by 6.38% in the last month. The company shares reached their 1-month lowest point of $11.91 on 10/19/22. With the stock rallying to its 52-week high on 03/08/22, shares of the company touched a low of $10.32 and a high of $21.73 in 52 weeks. It has reached a new high 9 times so far this year and lost -6.32% or -$0.99 in price. In spite of this, the price is down -32.45% from the 52-week high.

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Valuation Metrics

MAG Silver Corp. (MAG) has a trailing price-to-earnings (P/E) ratio of 86.86. The stock’s beta is 1.06. Other valuation ratios to consider include the price-to-book (PB) ratio at 3.69.

Financial Health

The quick ratio of MAG Silver Corp. for the three months ended March 30 was 30.10, and the current ratio was 30.10, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.00 and a total debt to equity ratio of 0.00 for the quarter ending March 30. Its gross profit as reported stood at $15.86 million compared to revenue of $11.4 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, MAG Silver Corp.’s return on assets was 4.50%.

Earnings Surprise

In the quarter under review, the net income was up than the previous quarter. The company posted a net income of -$4.43 million in the quarter, while revenues were shrunk -30.93%. The analyst consensus anticipated MAG Silver Corp.’s latest quarter earnings to come in at $0.06 per share, but it turned out to be $0.03, a -50.00% surprise. For the quarter, EBITDA amounted to -$3.5 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at MAG Silver Corp. (MAG) price momentum. RSI 9-day as of the close on 04 November was 72.06%, suggesting the stock is Overbought, with historical volatility in this time frame at 59.91%.

As of today, MAG’s price is $13.60 +12.58% or $1.64 from its 5-day moving average. MAG is currently trading +11.63% higher than its 20-day SMA and +15.23% higher than its 100-day SMA. However, the stock’s current price level is +10.13% above the SMA50 and -10.10% below the SMA200.

The stochastic %K and %D were 68.44% and 66.15%, respectively, and the average true range (ATR) was 0.82. With the 14-day stochastic at 95.85% and the average true range at 0.77, the RSI (14) stands at 66.18%. The stock has reached 0.34 on the 9-day MACD Oscillator while the 14-day reading was at 0.68.

Analyst Ratings

Scotiabank downgraded MAG Silver Corp. (AMEX: MAG) to a a Sector perform rating in its most recent analyst report. Previously, the stock was rated as a Sector outperform. The consensus rating for MAG Silver Corp. (MAG) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell MAG, while 3 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 7 others rate it as a “buy”.

What is MAG’s price target for the next 12 months?

Analysts predict a range of price targets between $14.69 and $25.00, with a median target of $17.66. Taking a look at these predictions, the average price target given by analysts for MAG Silver Corp. (MAG) stock is $17.96.


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