Sprott's Promotional Growth Claims Conflict with Analytical Skepticism on Valuation and Data Gaps

What happened

A Seeking Alpha article on February 24, 2026, claims Sprott's AUM skyrocketed to $70 billion with 146% earnings growth, driven by gold at $5,000 and uranium above $100 per pound. However, the DeepValue master report, based on data up to early February 2026, shows Sprott's last disclosed AUM was $51.0 billion at October 31, 2025, with no recent verification. The report rates Sprott as a 'WAIT' due to a high P/E of 43.7x and reliance on sustained net inflows, not just commodity price beta. Key risks include pending AUM updates and the effectiveness of PSLV's ATM program to convert demand into fee-paying assets. While the article is optimistic, it lacks substantiated data, contrasting with the report's critical view of valuation and operational leverage assumptions.

Implication

Sprott's valuation at 43.7x P/E offers no margin of safety, making it highly sensitive to any earnings shortfall from potential flow reversals. The company's operational leverage depends on converting commodity price gains into net inflows, which require effective scaling of the PSLV ATM program and sustained investor demand. Without updated AUM disclosures beyond October 2025, there is increased uncertainty about whether growth is driven by durable inflows or temporary market appreciation. Monitoring upcoming earnings reports and PSLV utilization rates is essential to assess if the high valuation is justified. Only if net inflows persist and costs remain controlled can the stock potentially deliver returns, but current levels are priced for perfection.

Thesis delta

No fundamental shift in the thesis; the Seeking Alpha article does not provide verified data and merely reiterates optimistic narratives already embedded in the stock price. The DeepValue thesis remains unchanged, hinging on upcoming AUM bridges and PSLV program evidence for any reassessment.