Shares of Silvercorp Metals Inc. (SVM, Financial)Â (TSX:SVM, Financial)Â were down 0.48% at $2.06 in after-hours trading on Thursday after releasing fourth-quarter and fiscal 2019 results. The quarter ended March 31.
GAAP earnings of 7 cents per share beat estimates by 3 centst. Non-GAAP earnings of 3Â cents per share were in line with expectations.
Despite topping projections by $800,000, fourth-quarter revenue of $34.95 million declined 9.1% year over year. The gross profit margin fell 300 basis points to 47% as a result of lower metal prices and sales volumes of silver and lead.
Silvercorp Metals sold 1.3 million ounces of silver, contributing 47.7% to total sales, and sold 700 ounces of gold, representing 2.3% of total sales. The miner sold 12.7 million pounds of lead and 7.3 million pounds of zinc which, together, made up 50% of total sales.
The Vancouver-based miner has operations in the Ying Mining District in the Henan Province and the GC Mine in the Guangdong Province of China.
As a result of a higher yield at the GC Mine in terms of ore throughput, grades and recoveries, which was reflected in lower production costs, Silvercorp closed the quarter with 37.1% growth in cash on hand to $67.4 million.
As of March 31, the company also has $47.84 million in short-term securities, $10.84 million in stockpiles and $4.475 million in total debt. Thus, the balance sheet appears to be very strong.
The company is also running a profitable business, as indicated by a full fiscal 2019 Ebitda margin of 52.8% compared to the industry median of 24.5%.
The stock closed at $2.1 per share on Thursday with a market capitalization of approximately $354.85 million. For the 52 weeks through May 23, the share price has fallen 29% to below the 200-, 100- and 50-day simple moving average lines. The closing price on Thursday was 14.8% above the 52-week low of $1.83 and 45.2% below the 52-week high of $3.05.
The 14-day relative strength index of 35 is approaching oversold levels.
Wall Street issued a buy recommendation rating with an average price target of $4.70 per share, reflecting 67.3% upside from Thursday’s closing price.
Silvercorp Metals also trades on the Toronto Stock Exchange. Shares were trading around 2.81 Canadian dollars ($2.1) at close on Thursday with a market capitalization of about $355.6 million.
The closing price was below the 200-, 100- and 50-day simple moving average lines. The 52-week range is CA$2.43 to CA$3.95.
The 14-day relative strength index is 37.
In addition, the stock has underperformed the VanEck Vectors Junior Gold Miners (GDXJ, Financial) exchange-traded fund by about 14% over the past year through May 23.
Disclosure: I have no positions in any securities mentioned.
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