Santacruz Silver Mining (TSXV:SCZ) Margin Decline Contradicts Prior Bullish Narratives Despite Revenue Growth

Santacruz Silver Mining (TSXV:SCZ) has just posted its Q3 2025 results, reporting revenue of $80.0 million and basic EPS of $0.045. Looking back over recent quarters, the company has seen revenue go from $70.3 million in Q1, to $73.3 million in Q2, and $80.0 million now in Q3. Basic EPS moved from $0.027 up to $0.059, then slightly down to $0.045. Profit margins have been squeezed this quarter, even as revenue momentum remains intact.

See our full analysis for Santacruz Silver Mining.

Next up, we’ll see how these numbers compare to the dominant narratives around Santacruz Silver Mining, and where they cause investors to rethink the story.

See what the community is saying about Santacruz Silver Mining

Margins Slide from 49.2% to 23.9%

• Over the last twelve months, Santacruz Silver Mining’s net profit margin dropped sharply, moving from 49.2% in the prior period down to 23.9% despite continued profitability.
• Consensus narrative notes the margin squeeze directly challenges last year’s strong earnings momentum.
  • Profitability remains high compared to peers, but the reduction in margin undercuts previous five-year compound earnings growth of 61.5% per year.
  • What is surprising is the company’s continued ability to generate profits, even as margin pressure mounts due to rising costs or fluctuating metal prices.

Strong profit growth is now facing headwinds. See how the consensus view weighs these margin trends in detail. 📊 Read the full Santacruz Silver Mining Consensus Narrative.

Trading Far Below DCF Fair Value

• Santacruz shares are trading at CA$2.41, which is 50.9% below the DCF fair value estimate of CA$4.91. This makes the stock look statistically undervalued on paper.
• The general market view sees the 8.6x price-to-earnings ratio, well below both peer and industry averages, as potentially attracting bargain-focused investors. However, significant insider selling in the last quarter gives reason for caution.
  • This discounted valuation is rare for a company with a proven track record of five years of profitability and faster-than-market expected revenue growth.
  • Bears may argue the market expects further margin declines or sees risks ahead not reflected in the simple valuation gap.

Forecast Revenue Growth Outpacing Market

• Revenue is projected to increase 12.49% per year, ahead of the Canadian market’s 4.7% pace. This signals that operational performance is expected to remain robust despite margin setbacks.
• The prevailing market view highlights this top-line growth rate as a critical offset to short-term margin pressure, suggesting that even with compressed earnings margins, Santacruz’s revenue expansion potential keeps it on investors’ watchlists.
  • High quality trailing earnings and a strong five-year historical growth rate support the idea that the business is not solely dependent on one-off results.
  • Still, the recent decline in net income and margins means execution will continue to be closely monitored by analysts and investors alike.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Santacruz Silver Mining on Simply Wall St. Add the company to your watchlist or portfolio so you’ll be alerted when the story evolves.

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A great starting point for your Santacruz Silver Mining research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

See What Else Is Out There

Santacruz Silver Mining’s declining profit margins and insider selling raise real questions about its ability to deliver stable earnings in the future.

If you want steadier performance, check out stable growth stocks screener (2075 results) to discover companies consistently growing revenue and profit without the same volatility or margin concerns.

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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