Assessing Hycroft Mining (HYMC) Valuation After High Grade Silver Finds And ESOP Shelf Registration

Hycroft Mining Holding (HYMC) has filed a shelf registration of approximately US$163.2 million for 4,719,255 Class A common shares linked to an ESOP-related offering, drawing renewed attention to the stock’s recent move.

See our latest analysis for Hycroft Mining Holding.

The shelf registration comes after a sharp run in the share price, with a 30-day share price return of 61.38% and a 90-day move that is more than 4x, driven largely by high grade silver discoveries, rising precious metal prices and insider buying. Over the longer term, total shareholder return has been very large over 1 year and strong over 3 years, even though the 5 year total shareholder return remains negative.

If Hycroft’s swings have caught your attention and you want to see what else is moving, it could be a good time to look at aerospace and defense stocks as another pocket of the market to research.

With Hycroft now trading near recent highs after a very large multi month move and a fresh US$163.2 million shelf tied to ESOP shares, is there still mispricing here, or are markets already baking in the company’s next phase?

Price to Book of 69.2x: Is it justified?

At a last close of US$39.57, Hycroft Mining Holding is trading on a P/B ratio of 69.2x, which screens as very expensive next to peers.

P/B compares the market value of a company to its net assets on the balance sheet. A 69.2x reading suggests investors are paying a high premium over book value for a business that currently reports no revenue and a net loss of US$45.61m.

According to the statements, Hycroft is expensive relative to its immediate peer group at 45x P/B. The gap is even wider against the broader US Metals and Mining industry, which sits at 2.6x. That is a striking difference and it signals that expectations around future asset productivity and potential mine development are far richer than what is implied for the average miner.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price to book of 69.2x (OVERVALUED)

However, you are still looking at a company with no revenue and a US$45.61m net loss, so funding needs or sentiment shifts could quickly challenge this premium.

Find out about the key risks to this Hycroft Mining Holding narrative.

Build Your Own Hycroft Mining Holding Narrative

If you see the story differently or simply want to test your own view against the numbers, you can build a fresh Hycroft thesis in just a few minutes, starting with Do it your way.

A great starting point for your Hycroft Mining Holding research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Hycroft has you thinking more broadly about opportunities, do not stop here. Casting a wider net with a few focused stock idea sets could help sharpen your watchlist.

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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