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Sprott Inc (TSE:SII)
:SII
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Sprott
(NYSE:SII)
78Outperform
Positive Factors
Business Model
Sprott benefits from a scalable business model, generating significant free cash flow and supporting valuations north of 20x earnings.
Financial Performance
Sprott boasts a debt-free balance sheet generating over $60M in free cash flow, providing flexibility for capital deployment such as rising dividends and share buybacks.
Market Share
Sprott's organic growth has been supported by both its flagship precious metals trusts and the introduction of newer funds, with a notable market share increase.
Negative Factors
Sprott (SII) vs. S&P 500 (SPY)
Market Cap
C$1.56B
Dividend Yield2.52%
Average Volume (3M)38.62K
Price to Earnings (P/E)22.8
Beta (1Y)1.14
Revenue Growth19.98%
EPS Growth18.77%
CountryCA
Employees129
SectorFinancial
Sector Strength77
IndustryAsset Management Services
Share Statistics
EPS (TTM)2.65
Shares Outstanding25,814,860
10 Day Avg. Volume53,099
30 Day Avg. Volume38,618
Financial Highlights & Ratios
PEG Ratio1.22
Price to Book (P/B)N/A
Price to Sales (P/S)6.16
Price to Cash Flow (P/CF)10.00
P/FCF Ratio10.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$72.00Price Target Upside12.38% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Sprott Business Overview & Revenue Model
Company DescriptionSprott Inc. (SII) is a global asset management firm dedicated to providing investors with specialized investment products and strategies focused on precious metals and real assets. The company operates through various segments including exchange-listed products, lending, and brokerage. Sprott is renowned for its expertise in the precious metals sector, offering a comprehensive range of solutions including managed equities, exchange-traded funds, and private equity.
How the Company Makes MoneySprott Inc. generates revenue primarily through management fees, transaction fees, and performance fees associated with its investment products and services. The company earns management fees based on assets under management (AUM) in its various funds and investment vehicles. Sprott also generates transaction fees through its brokerage and trading activities, providing services related to the buying and selling of commodities and securities. Performance fees contribute to revenue when investment funds exceed specific performance benchmarks. Additionally, Sprott's lending segment generates interest and fee income through its resource lending activities, offering customized financing solutions to mining companies. Strategic partnerships with financial institutions and resource companies enhance Sprott's market reach and investment capabilities, bolstering its overall revenue potential.
Sprott Financial Statement Overview
Summary
Sprott has demonstrated strong revenue growth and improved profit margins, supported by a robust balance sheet with zero debt. The company has shown impressive cash flow generation. However, the absence of EBIT in 2024 requires attention. Overall, the financial health is solid.Income Statement
Sprott has demonstrated strong revenue growth with a 15.1% increase from 2023 to 2024, alongside a healthy gross profit margin of 48.0% in 2024. However, the absence of EBIT in 2024 may raise concerns about operational efficiency. Net profit margin improved significantly to 29.3%, showcasing enhanced profitability.85
Very Positive
Balance Sheet
The company maintains a robust balance sheet with no total debt recorded in 2024, indicating strong financial stability. The equity ratio stands at 83.2%, reflecting sound financial health and limited leverage risk. Return on equity improved to 15.2%, highlighting efficient use of equity.92
Very Positive
Cash Flow
Sprott has shown impressive free cash flow growth of 137.5% from 2023 to 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.40, suggesting efficient cash conversion, while the free cash flow to net income ratio of 1.37 further underscores liquidity strength.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 168.35M | 146.30M | 154.27M | 164.94M | 114.41M | Gross Profit |
| 80.82M | 64.17M | 74.23M | 87.06M | 55.58M | EBIT |
| 0.00 | 43.88M | 57.59M | 63.38M | 36.66M | EBITDA |
| 74.32M | 57.19M | 60.94M | 67.93M | 40.72M | Net Income Common Stockholders |
| 49.29M | 41.80M | 17.63M | 33.19M | 26.98M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 47.06M | 22.89M | 55.03M | 55.94M | 53.58M | Total Assets |
| 388.80M | 378.83M | 383.75M | 365.87M | 377.35M | Total Debt |
| 0.00 | 24.24M | 54.44M | 29.77M | 16.99M | Net Debt |
| -46.83M | 3.58M | 2.76M | -20.04M | -27.11M | Total Liabilities |
| 65.15M | 73.13M | 106.48M | 74.65M | 86.36M | Stockholders Equity |
| 323.65M | 305.70M | 277.27M | 291.22M | 290.98M |
| Cash Flow | Free Cash Flow | |||
| 67.28M | 28.33M | 32.37M | 50.55M | 13.05M | Operating Cash Flow |
| 69.15M | 29.86M | 32.50M | 51.25M | 26.24M | Investing Cash Flow |
| 24.52M | 4.61M | -23.49M | -20.63M | -17.09M | Financing Cash Flow |
| -57.17M | -63.46M | -3.90M | -24.19M | -22.44M |
Sprott Technical Analysis
Positive
64.07
Price Trends
61.01
Positive
61.09
Positive
59.26
Positive
Market Momentum
<0.01
Negative
51.94
Neutral
34.66
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SII, the sentiment is Positive. The current price of 64.07 is above the 20-day moving average (MA) of 61.11, above the 50-day MA of 61.01, and above the 200-day MA of 59.26, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 51.94 is Neutral, neither overbought nor oversold. The STOCH value of 34.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SII.
Sprott Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $72.92B | 27.91 | 9.42% | 1.59% | 26.99% | -6.63% | |
78 Outperform | C$1.56B | 22.84 | 15.66% | 2.52% | 19.98% | 18.77% | |
75 Outperform | $19.78B | 15.21 | 14.66% | 1.08% | 16.53% | 206.89% | |
75 Outperform | $46.50B | 56.05 | 8.64% | 0.87% | 30.91% | 14.58% | |
70 Outperform | $2.65B | 136.17 | 1.00% | 0.93% | 0.80% | 137.87% | |
64 Neutral | $13.79B | 10.52 | 9.20% | 4.24% | 17.25% | -7.60% | |
56 Neutral | C$5.13B | 229.60 | 1.33% | 0.98% | 1.62% | -232.31% |
* Financial Sector Average
Performance Comparison
TSE:SII
Sprott
61.68
13.96
29.26%
TSE:SSL
Sandstorm Gold
9.09
2.59
39.78%
TSE:OR
Osisko Gold Royalties
27.29
5.72
26.51%
TSE:K
Kinross Gold
15.99
8.39
110.34%
TSE:WPM
Wheaton Precious Metals
102.40
41.63
68.50%
TSE:AEM
Agnico Eagle
145.22
70.95
95.52%
Sprott Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 5.49% | Next Earnings Date: May 2, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong fiscal year for Sprott, marked by continued AUM growth and improved financial performance, though tempered by quarterly challenges, particularly in the uranium market and equity strategy redemptions. However, the company's strategic initiatives, including new ETF launches and a focus on debt reduction, position it well for future growth amidst market uncertainties.Highlights
Seventh Consecutive Year of Double-Digit AUM Growth
Sprott achieved a 10% increase in AUM, reaching $31.5 billion by the end of 2024, driven by rising precious metal prices and $700 million in net sales, mostly in exchange-listed products.
Strong Financial Performance
Net income for the quarter was $11.7 million, up 21% year-over-year. For the full year, net income rose 18% to $49.3 million. Adjusted base EBITDA for the year increased 18% to $85.2 million.
Debt-Free Status and Dividend Increase
Sprott paid down its line of credit, resulting in a debt-free balance sheet, and increased its quarterly dividend by 20% in November.
Launch of New ETFs
Sprott expanded its ETF offerings with the launch of the Sprott Silver Miners & Physical Silver ETF and the Sprott Active Gold and Silver Miners ETF, both receiving positive initial traction.
Lowlights
Fourth Quarter AUM Decline
AUM decreased by 6% from the previous quarter, affected by market value depreciation and termination of certain sub-advised fund contracts.
Challenges in Uranium Market
Uranium prices faced a significant correction, with a 10.7% decline in the fourth quarter and a 19.7% decrease for the year, exacerbated by year-end selling and liquidation of a large fund.
Net Redemptions in Managed Equity Strategies
Reported $182 million in net redemptions in Q4 and $349 million for the full year, including $127 million related to the cancellation of sub-advisory agreements.
Company Guidance
During the Sprott Incorporated 2024 Fourth Quarter Results Conference Call, management provided an overview of the company's financial performance and strategic initiatives. The company reported a seventh consecutive year of double-digit AUM growth, with assets under management (AUM) increasing by $2.8 billion to $31.5 billion as of December 31, 2024. The momentum continued into 2025, with AUM rising by an additional $2 billion to $33.5 billion. Net income for the fourth quarter was $11.7 million, a 21% increase from the same period last year, and full-year net income was $49.3 million, up 18% year-over-year. Adjusted base EBITDA for the quarter was $22.4 million, representing a 19% increase from the previous year. The company highlighted significant growth in its precious metals physical trusts and net inflows to exchange-listed products, which contributed to the strong financial performance. Additionally, Sprott launched two new ETFs and increased its quarterly dividend by 20%, while also achieving a debt-free balance sheet by paying down its line of credit in the fourth quarter. Looking ahead, Sprott remains optimistic about the potential for further AUM growth, driven by rising precious metals prices and ongoing expansion of its critical materials offerings.Sprott Corporate Events
Business Operations and StrategyFinancial Disclosures
Sprott Inc. Reports 2024 Financial Results with Strong AUM Growth
Positive
Feb 26, 2025
Sprott Inc. reported its financial results for the year ended December 31, 2024, highlighting a 10% increase in Assets Under Management (AUM) from the previous year, despite a 6% decline in the fourth quarter. The company benefited from strong precious metals prices and net sales, particularly in its physical trusts and ETFs. Revenue growth was driven by higher management fees and performance fees, although commission revenues saw a decline due to reduced activity and the sale of a Canadian broker-dealer. Sprott continues to invest in sales and marketing to enhance client service and maintain its leadership in the industry.
Dividends
Sprott Inc. Announces Fourth Quarter 2024 Dividend
Positive
Feb 25, 2025
Sprott Inc. has declared a fourth quarter 2024 dividend of US$0.30 per common share, payable on March 25, 2025, to shareholders of record as of March 10, 2025. This announcement reflects Sprott’s ongoing commitment to providing value to its shareholders and may enhance its attractiveness to investors interested in the precious metals and critical materials sectors.
Financial Disclosures
Sprott Inc. Sets Date for 2024 Q4 Earnings Release and Webcast
Neutral
Feb 20, 2025
Sprott Inc. announced it will release its fourth-quarter results for 2024 on February 26, 2025, at 7:00 a.m., followed by an earnings webcast at 10:00 a.m. The webcast will be hosted by CEO Whitney George, CFO Kevin Hibbert, and Sprott Asset Management CEO John Ciampaglia. This announcement highlights Sprott’s commitment to transparency and communication with its stakeholders, which may impact investor confidence and industry positioning.
Product-Related Announcements
Sprott Inc. Launches Active Gold & Silver Miners ETF
Positive
Feb 20, 2025
Sprott Inc. has launched its first actively managed ETF, the Sprott Active Gold & Silver Miners ETF (GBUG), which is aimed at achieving long-term capital appreciation by investing in companies focused on gold and silver exploration, development, and mining, as well as royalty and streaming companies. This launch leverages Sprott’s extensive expertise in precious metals and mining investments, offering a unique opportunity for investors to benefit from active stock picking in a complex industry. The ETF combines active management’s advantages with ETF features like daily transparency and liquidity, positioning Sprott as a leader in the precious metals investment sector.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.