A Fresh Look at Pan American Silver (TSX:PAAS) Valuation After Recent Market Swings

Pan American Silver (TSX:PAAS) shares have posted a mixed performance recently, moving up 2% in the past day but shedding 12% over the past month. Investors may be eyeing these swings as they evaluate the company’s longer-term outlook.

See our latest analysis for Pan American Silver.

Even after a strong 58.6% year-to-date share price return, Pan American Silver’s momentum has cooled lately as the stock slides 12% over the past month. Over a longer period, the story remains impressive, with a three-year total shareholder return of 155% suggesting substantial wealth creation for patient investors.

If the recent swings in Pan American Silver have you rethinking your next move, take a moment to discover fast growing stocks with high insider ownership.

With the stock down lately but still far from its all-time highs, it's worth asking if Pan American Silver is trading at a discount given its recent growth, or if the market has already factored in the company’s future prospects.

Price-to-Earnings of 28.1x: Is it justified?

Pan American Silver trades at a price-to-earnings (P/E) ratio of 28.1x, putting it above both its industry and peer averages, but almost exactly matches what regression analysis suggests is fair.

The price-to-earnings ratio reflects how much investors are willing to pay today for each dollar of current earnings. For a precious metals company like Pan American Silver, this multiple is often shaped by expectations of future profit growth, commodity price swings, and operational efficiency.

While the market is granting PAAS a premium over the Canadian Metals and Mining industry average of 20.5x and its peer average of 27.7x, the current 28.1x multiple is nearly matched with our estimate of the fair P/E ratio at 28.4x. This suggests that the share price could track sector shifts closely going forward, with limited room for multiple expansion unless the earnings outlook improves or commodity prices surge.

Explore the SWS fair ratio for Pan American Silver

Result: Price-to-Earnings of 28.1x (ABOUT RIGHT)

However, continued volatility in commodity prices and unexpected slowdowns in revenue growth could present challenges to Pan American Silver’s recent momentum and valuation.

Find out about the key risks to this Pan American Silver narrative.

Another View: Discounted Cash Flow (DCF) Perspective

While Pan American Silver’s current price-to-earnings ratio looks reasonable, our DCF model arrives at a slightly different conclusion. The SWS DCF model suggests that the shares are trading marginally above their calculated fair value. This indicates they may not offer a significant discount today. Does this mean expectations for future growth are already built in?

Story Continues

Look into how the SWS DCF model arrives at its fair value.PAAS Discounted Cash Flow as at Nov 2025

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Pan American Silver for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 870 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Pan American Silver Narrative

If you see the data differently or want a hands-on approach, you can put together your own view in just a few minutes. Do it your way.

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

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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 PAAS.TO.

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