Coeur Mining's Earnings Beat Masks Underlying Execution and Valuation Risks

What happened

Coeur Mining released its FY2025 results, beating both sales and earnings expectations and setting new records for gold and silver production, which drove a stock price increase. This positive news aligns with the market's focus on operational momentum, but the DeepValue report reveals the stock is already priced at high multiples, with an EV/EBITDA of 38.0x and P/E of 29.7x, leaving little margin for safety. Critical execution risks persist, such as the fragile Rochester expansion, where management has flagged potential deviations in throughput and costs, and integration challenges at Las Chispas with purchase price allocation noise. Additionally, the pending Investment Canada Act approval for the New Gold acquisition remains a key gate, with no confirmation yet, keeping deal uncertainty elevated. Therefore, while the earnings beat provides short-term optimism, it does not address the fundamental de-risking needed for long-term value creation.

Implication

The earnings beat confirms Coeur's operational improvement, but investors must weigh this against several headwinds: the valuation is stretched, with metrics like 38.0x EV/EBITDA indicating limited upside without flawless execution; key assets like Rochester are execution-fragile, and any sustained underperformance could pressure cash flows; the New Gold acquisition's closure depends on Investment Canada Act approval, which is still uncertain and could delay scale benefits; insider selling patterns and crowded market sentiment suggest underlying skepticism; thus, a wait-and-see approach is prudent until harder catalysts like regulatory approval are secured.

Thesis delta

The FY2025 beat reinforces the operational momentum leg of the thesis, but it does not shift the core investment call. Critical catalysts—such as Investment Canada Act approval by mid-2026 and sustained execution at Rochester—remain unresolved, and the high valuation still offers no margin of safety. Therefore, the 'WAIT' rating stands, as investors should seek lower entry points or clear de-risking before increasing exposure.