Sprott (NYSE:SII) Issues Earnings Results

Key Points

• Sprott narrowly missed earnings expectations, reporting quarterly EPS of $1.33 versus the $1.34 consensus, though EPS more than doubled from $0.52 a year earlier.
• Precious-metals volatility hurt the quarter: falling gold and silver prices reduced assets under management by CAD 9.5 billion to CAD 55.6 billion and led to CAD 400 million in net redemptions. However, average AUM rose 70% year over year, while adjusted EBITDA doubled to CAD 50.8 million.
• Critical-materials products remained a growth driver, with positive net sales and strong investor interest in copper, uranium and rare earths. Sprott also declared a quarterly dividend of $0.40 per share, equivalent to a 1.4% annualized yield.

Sprott (NYSE:SII - Get Free Report) posted its quarterly earnings data on Wednesday. The company reported $1.33 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.34 by ($0.01), RTT News reports. Sprott had a net margin of 21.99% and a return on equity of 23.54%. During the same quarter in the previous year, the company earned $0.52 EPS.

Here are the key takeaways from Sprott's conference call:

• Precious-metals volatility pressured results: Gold fell 14.1% and silver 22% in the quarter, driving a CAD 9.5 billion decline in AUM to CAD 55.6 billion and CAD 400 million of net redemptions, primarily from physical precious-metals trusts.
• Despite the quarterly pullback, average AUM rose 70% year over year to CAD 63.9 billion, while adjusted EBITDA doubled to CAD 50.8 million and net income increased to CAD 34.3 million, reflecting higher average AUM and operating leverage.
• Critical-materials products remained a growth area, generating positive net sales even in a difficult market. Management highlighted continued investor interest in copper, uranium, and rare earths, with the Rare Earths ETF Ex-China reaching CAD 50 million in assets in 32 trading days.
• The company reported a 71% adjusted EBITDA margin, a debt-free balance sheet, strong liquidity, and continued share repurchases that become more aggressive at lower stock prices. Management also expects to close its fourth private lending fund sometime in 2027.

Sprott Stock Performance

Shares of Sprott stock traded up $7.94 on Wednesday, reaching $112.69. The company had a trading volume of 431,190 shares, compared to its average volume of 218,061. Sprott has a 52-week low of $61.94 and a 52-week high of $169.63. The firm's 50 day moving average price is $114.55 and its two-hundred day moving average price is $129.44. The firm has a market cap of $2.90 billion, a PE ratio of 34.46 and a beta of 0.83.

Sprott Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Tuesday, September 1st. Shareholders of record on Monday, August 17th will be given a dividend of $0.40 per share. The ex-dividend date is Monday, August 17th. This represents a $1.60 dividend on an annualized basis and a dividend yield of 1.4%. Sprott's dividend payout ratio (DPR) is currently 48.93%.

Hedge Funds Weigh In On Sprott

Hedge funds have recently bought and sold shares of the company. Virtu Financial LLC purchased a new stake in Sprott during the fourth quarter worth about $209,000. Mackenzie Financial Corp grew its holdings in shares of Sprott by 71.1% in the fourth quarter. Mackenzie Financial Corp now owns 23,602 shares of the company's stock valued at $2,315,000 after purchasing an additional 9,811 shares in the last quarter. Regal Partners Ltd increased its stake in Sprott by 3.9% during the 4th quarter. Regal Partners Ltd now owns 102,807 shares of the company's stock worth $10,067,000 after buying an additional 3,885 shares during the period. Toronto Dominion Bank increased its stake in Sprott by 222.8% during the 4th quarter. Toronto Dominion Bank now owns 29,696 shares of the company's stock worth $2,909,000 after buying an additional 20,496 shares during the period. Finally, Oxford Asset Management LLP lifted its holdings in Sprott by 48.7% during the 4th quarter. Oxford Asset Management LLP now owns 5,766 shares of the company's stock worth $565,000 after buying an additional 1,888 shares in the last quarter. Institutional investors and hedge funds own 28.30% of the company's stock.

Wall Street Analyst Weigh In

Several research firms have recently weighed in on SII. Royal Bank Of Canada raised their target price on Sprott from $218.00 to $230.00 and gave the company an "outperform" rating in a research report on Thursday, May 7th. TD Securities reaffirmed a "hold" rating on shares of Sprott in a report on Thursday, May 7th. Weiss Ratings cut shares of Sprott from a "buy (b)" rating to a "buy (b-)" rating in a research report on Thursday, July 30th. Finally, Wall Street Zen upgraded shares of Sprott from a "hold" rating to a "buy" rating in a research report on Saturday, May 9th. Two analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus price target of $230.00.

About Sprott

Sprott Inc is a Toronto‐based alternative asset manager specializing in precious metals, real assets and related investment vehicles. Founded in 1981 by Eric Sprott, the firm has built a reputation for offering physically backed bullion trusts, exchange‐traded funds (ETFs), mutual funds and private managed accounts that provide exposure to gold, silver, platinum and other hard assets. Sprott's product lineup also includes royalty and streaming strategies, which grant investors long‐term participation in mining project cash flows without direct operational risk.

In addition to its flagship physical bullion trusts, Sprott offers actively managed equity portfolios that focus on companies engaged in the exploration, development and production of precious metals.

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