Sprott's 2025 Results Deliver AUM Update, Testing High-Valuation Thesis

What happened

Sprott Inc. announced its year-end 2025 financial results, providing the first consolidated AUM update since October 2025, which the DeepValue report flagged as a critical verification point. The report's WAIT rating hinges on whether AUM growth stems from durable net inflows to physical trusts or fleeting metal price appreciation, with thresholds at $53 billion for a bull case and $48 billion for a bear case. Initial data likely shows AUM holding near $50 billion, but management's optimistic framing may obscure the net inflow breakdown essential for fee sustainability. At a P/E of 43.7x, the stock prices in perfect execution, leaving no margin for error if flows disappoint or the PSLV ATM issuance faces disruptions. Investors must now critically analyze the full release to confirm if net inflows persisted and operating leverage held, as any shortfall could trigger rapid multiple compression.

Implication

This update resolves the lack of post-October 2025 AUM data, allowing investors to assess whether net inflows into physical trusts continued, which is crucial for fee growth amid a 43.7x P/E valuation. If AUM falls below $48 billion due to net outflows, the bear scenario materializes, likely eroding earnings and compressing multiples quickly. Conversely, AUM exceeding $53 billion with positive inflows would support the bull case, but only if adjusted profitability shows operating leverage persists beyond IFRS noise. The PSLV ATM program's effectiveness in converting silver demand into AUM must be verified, as any issuance disorder could undermine investor confidence and long-term growth. Overall, the results narrow the reassessment window to 3-6 months, with the WAIT rating poised to shift based on whether the disclosed metrics align with the DeepValue report's key drivers.

Thesis delta

The investment thesis remains unchanged until detailed 2025 metrics are scrutinized, but the announcement introduces concrete data that could validate or invalidate the core assumption of sustained net inflows. A shift to a BUY requires AUM above $53 billion with clear inflow dominance and PSLV issuance success, while a SELL triggers if AUM drops below $48 billion or flow transparency falters. The thesis delta thus hinges on this data release, moving from speculative等待 to evidence-based decision-making.