Is It Too Late To Consider Hecla Mining (HL) After A 328% One Year Surge?

• If you are wondering whether Hecla Mining shares still offer value after a strong run, you are not alone. This article is designed to break that question down in plain terms.
• The stock last closed at US$22.27, with returns of 14.3% over the past week, 31.2% over the past month, 18.0% year to date, and 327.6% over the past year, so recent performance is front and center for any valuation call.
• Recent attention on silver and precious metals producers has kept Hecla Mining on many watchlists, as investors reassess how miners fit into their portfolios. That backdrop helps explain why the share price performance has been so strong across one-year, three-year at 268.7%, and five-year at 274.3% return periods.
• On our framework, Hecla Mining scores 2 out of 6 for potential undervaluation. Next, we will compare different valuation approaches before finishing with a broader way to judge whether that score really captures the full story.

Hecla Mining scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

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

A Discounted Cash Flow, or DCF, model estimates what a business might be worth today by projecting its future cash flows and then discounting those back to a present value.

For Hecla Mining, the model starts with last twelve month Free Cash Flow of about $124.46 million. Using a 2 Stage Free Cash Flow to Equity approach, analysts and extrapolated estimates project Free Cash Flow reaching around $1.97 billion in 2035, with annual figures between 2026 and 2035 ranging from roughly $602.27 million to $1.97 billion. Simply Wall St only uses direct analyst inputs for the earlier years, and later years are extrapolated from those assumptions.

On this basis, the DCF model arrives at an estimated intrinsic value of about $41.24 per share. Compared with the recent share price of US$22.27, this implies the stock trades at about a 46.0% discount to that intrinsic estimate, which in this model suggests a material level of undervaluation.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Hecla Mining is undervalued by 46.0%. Track this in your watchlist or portfolio, or discover 875 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 Hecla Mining.

Approach 2: Hecla Mining Price vs Earnings

For a profitable company, the P/E ratio is a straightforward way to see how much you are paying for each dollar of earnings, which makes it a useful cross check against the DCF view you just saw.

In simple terms, higher growth and lower perceived risk usually support a higher P/E, while slower growth or higher risk tend to justify a lower P/E. So context really matters when you look at any single number.

Hecla Mining currently trades on a P/E of 75.11x. That sits well above the Metals and Mining industry average of about 26.30x and also above the peer average of 26.52x. To put those comparisons into a broader context, Simply Wall St calculates a proprietary “Fair Ratio” of 29.79x. This is the P/E it would expect for Hecla Mining given factors like its earnings growth profile, profit margins, risks, industry and market cap.

This Fair Ratio is more tailored than a simple industry or peer comparison because it attempts to adjust for company specific characteristics rather than assuming all miners deserve the same multiple. Comparing the Fair Ratio of 29.79x with the actual P/E of 75.11x suggests Hecla Mining currently looks overvalued on this metric.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1447 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Hecla Mining Narrative

Earlier we mentioned that there is an even better way to understand valuation. Think of a Narrative as your own clear story about Hecla Mining that connects what you believe about its business, future revenue, earnings and margins to a forecast and then to a fair value. All of this happens within Simply Wall St’s Community page, where millions of investors share their views and where those Narratives update when news or earnings arrive. This allows you to see in real time how your fair value compares with the current price, whether that is closer to the highest analyst target of US$12.50 or the lowest at US$6.50 in the example above.

Do you think there's more to the story for Hecla 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.

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