If you are wondering whether Endeavour Mining at around C$79.08 is still offering value after a strong run, this article walks through what the current price might be implying.
The stock has pulled back recently, with the share price down 4.7% over the last week and 8.1% over the last month, while still showing a 16.2% gain year to date and a 92.6% return over the past year.
These moves sit against a backdrop of ongoing sector attention on gold producers and investor focus on companies with established operations and balance sheet resilience. For Endeavour Mining, that context matters when judging whether recent performance, including a 165.7% three year return and a 226.7% five year return, still lines up with a reasonable price.
On Simply Wall St’s valuation model, Endeavour Mining scores 4 out of 6 on the value checks. The next sections break down what different valuation methods say about the stock, and then finish with a broader way to think about value that goes beyond any single metric.
A Discounted Cash Flow, or DCF, model estimates what a company could be worth by projecting future cash flows and discounting them back to today’s value using a required return. It is essentially asking what all those future cash flows are worth in today’s dollars.
For Endeavour Mining, the 2 Stage Free Cash Flow to Equity model uses current last twelve month free cash flow of $1.02b as a starting point. Analysts provide explicit forecasts for several years, and Simply Wall St then extrapolates further, with ten year projections running from a forecast $2.36b in 2026 through to $1.62b in 2035. These projected cash flows are discounted back to today based on the model’s assumptions about risk and required return.
On this basis, the DCF model arrives at an estimated intrinsic value of $142.63 per share. Compared with the current share price of around CA$79.08, this implies an intrinsic discount of about 44.6%. This suggests the stock is trading at a sizeable markdown relative to the model’s estimate of value.
For a profitable company like Endeavour Mining, the P/E ratio is a useful way to think about value because it links the share price directly to the earnings that support it. In general, investors tend to accept a higher or lower “normal” P/E depending on what they expect for future growth and how much risk they see in the business.
Endeavour Mining is currently trading on a P/E of 16.11x. That sits close to the broader Metals and Mining industry average of 15.95x, and below the peer group average of 22.06x. Simply Wall St also provides a proprietary “Fair Ratio” of 24.74x, which is the P/E level that could be expected given factors such as earnings growth, profit margins, industry, market cap and company specific risks.
This Fair Ratio is more tailored than a simple comparison with peers or the industry, because it attempts to adjust for differences in growth, risk and profitability rather than assuming all companies deserve the same multiple. With the Fair Ratio of 24.74x sitting above the current P/E of 16.11x, the P/E based view points to the stock trading below that modelled fair level.
Upgrade Your Decision Making: Choose your Endeavour Mining Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach a clear story about Endeavour Mining to concrete numbers by linking your assumptions about future revenue, earnings and margins to a forecast, a Fair Value, and then a simple comparison with the current price. Each Narrative lives inside the Community page and updates as fresh news or earnings arrive. You can see, for example, one investor building a higher Fair Value around a scenario where gold reaches US$4,000 per ounce and the stock is worth about US$156 a share, while another uses a much lower Fair Value of about CA$50.76, and you can decide which story feels closer to your own view.
For Endeavour Mining however, we will make it really easy for you with previews of two leading Endeavour Mining Narratives:
Each one uses the same current share price of about C$79.08 but reaches very different conclusions about what a reasonable Fair Value might be, based on different assumptions about gold prices, costs, future revenue and risk.
Implied discount to this Fair Value at C$79.08: about 49% below the narrative Fair Value
Revenue growth assumed in the model: 50.93%
Assumes gold reaches US$4,000 per ounce and production holds at about 1.2 million ounces, which would lift annual revenue to about US$4.8b under the narrative assumptions.
Uses an all in cost assumption of US$1,400 per ounce, which would leave an estimated US$3.12b of free cash flow before any further adjustments for tax, sustaining capital or growth spending.
Applies a 10x free cash flow multiple and an assumed 200 million shares outstanding to arrive at a Fair Value of about US$156 per share, which is well above the current share price used in this article.
Implied premium to this Fair Value at C$79.08: about 56% above the narrative Fair Value
Revenue change assumed in the model: revenue declines 5.14% a year
Highlights project execution and permitting risks at the Assafou project, higher potential government take in West Africa and reliance on high grade stockpiles and brownfield discoveries at key assets as reasons revenue could be pressured over time.
Builds a case where revenue is expected to decline by about 5.1% per year over the next three years, while margins rise from 12.6% to 18.1% and earnings reach about US$603.0m by around December 2028, with a P/E of 18x on those earnings.
Translates those assumptions into a Fair Value of about C$50.76 per share, which is below both the consensus target of C$75.69 and the current C$79.08 share price, implying the stock could be pricing in stronger outcomes than this scenario allows for.
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.
Companies discussed in this article include EDV.TO.
