PAAS Stock Risk & Deep Value Analysis
Pan American Silver Corp
DVR Score
out of 10
What You Need to Know About PAAS Stock
We analyzed Pan American Silver Corp using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran PAAS through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
PAAS Risk Analysis & Red Flags
What Could Go Wrong
The biggest risk for Pan American Silver is a material and sustained decline in global precious metal prices. Given that 100% of the company's revenue is derived from the sale of silver and gold, a significant drop in prices (e.g., silver falling below $30/oz for multiple quarters) would directly erode its 'record revenue, earnings and cash flows' and substantially reduce its profitability and ability to fund future projects like the Timmins expansion.
Risk Matrix
Overall
Moderate
Financial
Low
Market
High
Competitive
Medium
Execution
Medium
Regulatory
Medium
Red Flags
- ⚠
High sensitivity to volatile commodity prices, which are beyond company control.
- ⚠
Capital-intensive business model requiring significant ongoing investment to maintain production and replace reserves.
- ⚠
Dependence on favorable political and regulatory environments in various operating jurisdictions across the Americas.
Upcoming Risk Events
- 📅
Commodity Price Reversal (next 6-12 months): A significant and sustained decline in silver (e.g., below $30/oz) or gold prices (e.g., below $2,000/oz) could directly impact revenue and profitability.
- 📅
Operational Disruptions at Major Mines (ongoing): Unforeseen geopolitical issues, labor disputes, or technical challenges at key mines (e.g., La Colorada, San Vincente) could reduce production volumes and increase All-in Sustaining Costs (AISC), impacting cash flow.
When to Reconsider
- 🚪
Sell if the price of silver falls below $30/ounce and remains there for two consecutive quarters, signaling a shift in the commodity cycle.
- 🚪
Exit if Q1 2026 'record revenue, earnings and cash flows' reverse significantly, with operating cash flow turning negative for two consecutive quarters.
- 🚪
Sell if the Timmins Camp Project experiences significant delays or cost overruns exceeding 20% of the US$146 million budget, indicating poor capital allocation.
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Investment Thesis
If Pan American Silver continues to capitalize on strong precious metal prices and successfully executes its Timmins Camp Project and other operational improvements, then it can sustain its 'record revenue, earnings and cash flows', leading to consistent shareholder returns via dividends and potentially a modest re-rating to a higher P/E multiple (e.g., 18-20x) as investors reward stable, high-margin commodity exposure. This is bullish because its current valuation does not fully price in the long-term cash generation potential if metal prices remain elevated and operational efficiencies are maintained.
Is PAAS Stock Undervalued?
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PAAS Price Targets & Strategy
12-Month Target
$54.40
Bull Case
$64.00
Bear Case
$44.80
Valuation Basis
Based on 17x forward P/E applied to estimated FY26 EPS of $3.20.
Entry Strategy
Consider dollar-cost averaging between $47-$49, near recent support levels, especially on dips related to commodity price volatility.
Exit Strategy
Take partial profits at $55-$60, with a stop-loss at $45 if metal prices show sustained declines or operational issues emerge.
Portfolio Allocation
3-5% for a moderate-risk portfolio seeking commodity exposure and stable returns, not hyper-growth.
Price Targets & Strategy
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Is PAAS Financially Healthy?
Valuation
P/E Ratio
16.35
Forward P/E
15.12
EV/EBITDA
7.29
PEG Ratio
0.10
Price/Book
1.88
Price/Sales
5.40
Profitability
Gross Margin
44.06%
Operating Margin
41.20%
Net Margin
31.61%
Return on Equity
19.51%
Revenue Growth
33.74%
EPS
$3.11
Balance Sheet
Current Ratio
2.69
Quick Ratio
1.94
Debt/Equity
0.12
Other
Beta (Volatility)
3.61
Dividend Yield
0.83%
Does PAAS Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Stable
Moat Sources
3 Identified
PAAS's moat primarily stems from its access to proven, high-grade deposits and efficient operations. This is durable as long as it can replace or extend its resource base and maintain cost competitiveness. The Timmins expansion and ongoing exploration are key to this durability.
Moat Erosion Risks
- •Depletion of high-grade reserves without sufficient replacement, leading to higher average costs or reduced production.
- •Technological advancements by competitors that significantly reduce extraction costs or unlock new resource types, eroding PAAS's cost advantage.
PAAS Competitive Moat Analysis
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PAAS Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral, largely driven by broader precious metals market sentiment rather than company-specific virality.
Institutional Sentiment
Neutral, with a strong base of institutional ownership (640 owners holding 255,533,227 shares) indicating long-term belief in the company's asset base and operational capabilities, but no recent significant upgrades/downgrades were provided.
Insider Activity (Form 4)
No specific insider buying or selling activity (Form 4 filings) for the last 90 days was provided in the research context.
Options Flow
Normal options activity; no unusual spikes in put/call ratios or large block trades indicating institutional positioning were detected from the provided information.
Earnings Intelligence
Next Earnings
Estimated early-August 2026 (for Q2 2026 results)
Surprise Probability
Medium (Company has demonstrated strong performance, but commodity prices can introduce volatility against estimates)
Historical Earnings Pattern
Stock price tends to react significantly to metal price movements in conjunction with earnings, showing strong upward movement on beats or positive outlooks on commodity prices, and downward pressure on misses or price declines.
Key Metrics to Watch
Competitive Position
Top Competitor
First Majestic Silver (AG)
Market Share Trend
Stable, Pan American Silver maintains its position as a major silver producer, with growth through capital investment (like Timmins) rather than aggressive market share shifts from competitors.
Valuation vs Peers
Trading at a P/E of 15.39, which is generally in line with or slightly above the average for profitable, large-cap precious metals miners, reflecting its strong profitability and balance sheet.
Competitive Advantages
- •Diversified portfolio of high-quality silver and gold mines across stable jurisdictions.
- •Demonstrated operational efficiency and cost management, particularly within its silver segment.
- •Strong balance sheet with significant liquidity allowing for strategic investments and resilience against market downturns.
Market Intelligence
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What Could Drive PAAS Stock Higher?
Near-Term (0-6 months)
- •Q2 2026 Earnings Report (estimated early-August 2026): Strong results driven by sustained metal prices and higher production volumes could re-affirm financial strength and FCF generation.
- •Timmins Camp Project Corporate Update (Q3 2026): Following June 30, 2026, reserve/resource estimates; could increase proven reserves and extend mine life, positively impacting long-term valuation.
Medium-Term (6-18 months)
- •Timmins Camp Project Phase 1 Completion (mid-2028 est.): Successful completion of the US$146M shaft extension and access drifts, leading to increased gold production and lower operating costs per ounce.
- •Global Silver Demand from Industrial Applications (2027-2028): Increasing use of silver in solar panels, EVs, and 5G technology could drive sustained higher silver prices, boosting PAAS's primary revenue stream.
Long-Term (18+ months)
- •Strategic Acquisitions & Exploration Success (2028-2029): If PAAS can acquire attractive, high-grade silver/gold assets or achieve significant exploration success, it could meaningfully expand its resource base and extend its mine life, allowing for sustained production beyond current projections.
- •Sustained Precious Metal Bull Market (beyond 2029): If gold and silver prices remain elevated due to geopolitical instability, inflation, or monetary policy, PAAS's existing asset base would continue to generate substantial free cash flow, supporting dividends and share buybacks and potentially increasing the company's valuation multiple.
Catalysts & Growth Drivers
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What's the Bull Case for PAAS?
- ✓
Watch quarterly All-in Sustaining Costs (AISC) per ounce for both silver and gold – a sustained increase above sector averages could signal eroding cost advantages.
- ✓
Monitor global silver and gold price trends – a significant downturn (e.g., 20%+ decline over 3 months) would directly impact revenue and earnings outlooks.
- ✓
Track progress and budget adherence of the Timmins Camp Project; any material delays or cost overruns could impact future production and investor confidence.
Bull Case Analysis
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How Pan American Silver Corp Makes Money
Pan American Silver Corp. is a major producer of primary silver and gold, along with secondary metals like zinc, lead, and copper. The company operates multiple mines across North and South America, extracting precious and base metals from underground and open-pit operations. It sells these metals on the global market, with revenue directly tied to prevailing commodity prices. Its business model relies on efficient exploration, development, and operation of mining assets to maintain a robust resource base and profitable production.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Pan American Silver Corp (PAAS)?
As of June 20, 2026, Pan American Silver Corp has a DVR Score of 3.9 out of 10, placing it in the "Risk Trap" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Pan American Silver Corp?
Pan American Silver Corp's market capitalization is approximately $29.3B..
What is the risk level for PAAS stock?
Our analysis rates Pan American Silver Corp's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of PAAS?
Pan American Silver Corp currently has a price-to-earnings (P/E) ratio of 16.4. This is in line with broader market averages.
Does Pan American Silver Corp pay a dividend?
Yes, Pan American Silver Corp pays a dividend with a current yield of approximately 0.83%.
Is Pan American Silver Corp's revenue growing?
Pan American Silver Corp has reported revenue growth of 33.7%. The company is showing strong top-line momentum.
Is PAAS stock profitable?
Pan American Silver Corp has a profit margin of 31.6%. This indicates strong profitability.
How often is the PAAS DVR analysis updated?
Our AI-powered analysis of Pan American Silver Corp is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on June 20, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for PAAS (Pan American Silver Corp) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.