🎁 💸 Warren Buffett's Top Picks Are Up +49.1%. Copy Them to Your Watchlist – For FreeCopy Portfolio

A-Mark Precious Metals stock downgraded by B.Riley amid weak market

EditorEmilio Ghigini
Published 05/15/2024, 05:37 AM

On Wednesday, B.Riley adjusted its position on A-Mark Precious Metals (NASDAQ:AMRK) stock, shifting the rating from Buy to Neutral and maintaining a price target of $33.00.

The firm cited weaker than expected market conditions over the past two quarters, leading to results that fell short of both their own and the consensus estimates.

A-Mark Precious Metals reported its third-quarter financial results for fiscal year 2024 on May 7, which showed the company's performance amid a challenging market environment.

Despite these conditions, the stock has maintained a position near the upper end of its two-year trading range. Additionally, the trailing 12-month price-to-earnings (P/E) multiple has increased from 5.9x in 2022 to 9.4x currently.

Recent data indicates some positive trends, with silver and gold premiums showing significant increases from their lows earlier in the year. These improvements suggest the possibility of better results for the current quarter. Nonetheless, the firm expressed caution, noting that the stock price may be anticipating a stronger recovery than what the actual financials suggest.

For the fourth quarter of fiscal year 2024, B.Riley projects an adjusted EBITDA of $22.3 million, down from $38.4 million, and earnings per share (EPS) at $0.54, a decrease from the previous $1.06.

Looking ahead to fiscal year 2025, the firm has revised its EPS and EBITDA estimates from $5.96 and $201.5 million to $3.00 and $117.1 million, respectively.

The price target of $33.00 is based on a revised higher multiple of 11.0x P/E and 9.0x enterprise value/EBITDA, reflecting a successful re-rating of the stock during a period of stronger gold prices. Despite the recent improvements in precious metal premiums, the firm remains cautious about the near-term outlook for A-Mark Precious Metals.

InvestingPro Insights

A-Mark Precious Metals (NASDAQ:AMRK) has shown a notable performance in the market, with recent data reflecting a mix of challenges and strengths. The InvestingPro Data reveals a market capitalization of $911.21M, indicating the company's substantial presence in its sector. The P/E ratio, a key indicator of market expectations, stands at 11.58, suggesting a moderate valuation relative to earnings. This is closely aligned with the price target based on a revised higher multiple of 11.0x P/E mentioned in the article.

Moreover, despite concerns about gross profit margins as highlighted by one of the InvestingPro Tips, the company's revenue growth remains robust at 24.66% for the last twelve months as of Q3 2024. This growth could signal potential for the company's performance in the coming quarters. Additionally, the strong return over the last three months, with a price total return of 50.65%, may indicate investor confidence in the company's trajectory.

For investors seeking to delve deeper into A-Mark Precious Metals' financials and future prospects, there are 9 additional InvestingPro Tips available, which can provide further insights into the company's performance and market position. To explore these tips and gain a comprehensive understanding of AMRK, visit https://www.investing.com/pro/AMRK and consider using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.