HECLA MINING COMPANY (HL): what the price requires
At today's price, HECLA MINING COMPANY (HL) is priced for today's economics sustained for ~7.6 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/HL
Headline
| Field | Value |
|---|---|
| Ticker | HL |
| Company | HECLA MINING COMPANY |
| Current price | $15.19/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 17.3% |
| Operating margin today | 38.6% |
| Margin compression implied | -21.3pp |
| Must persist for | 7.6y |
| Multiple paid | 20x operating income |
The operating-margin requirement is derived from the framework's value band at year 8, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 12.1% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.8 years.
Reconcile: at the x-ray's 9.3% required return this reads ~16%/yr; the models below use their own rates.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +1.23σ |
| sustained it ~7.6 years at this level | 21% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 3.24x | 5 | expensive |
| Earnings | 2.70x | 4 | expensive |
| Relative | 1.79x | 5 | expensive |
| Growth | 0.75x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.8%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $25.01 | 0.61x | yes | FCF base $0.5B, growth 25% (input: historical growth), terminal g 4.0%, WACC 8.8%, 5yr projection |
| DCF Exit Multiple | Growth | $19.09 | 0.80x | yes | Exit EV/EBITDA: 9.3x / 14.3x / 19.3x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $10.40 | 1.46x | yes | P/E 21.03x (blended: static sector reference 14x + trailing (TTM) 37x), scenarios: 15.8x / 21.0x / 25.2x (bear / base = reference held flat / bull), EV/EBITDA 9.88x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $4.38 | 3.47x | yes | BV/sh $3.81, ROE (TTM) 10.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $4.69 | 3.24x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $20.28 | 0.75x | yes | Rev $1.6B, growth 30% (input: historical growth; tapered), Terminal P/S: 4.5x / 6.0x / 7.2x (bear / base = today's held flat / bull, cap 6x) |
| Peter Lynch Fair Value | Relative | $4.92 | 3.09x | yes | EPS $0.41, growth 2% (input: historical EPS growth), PEG=21.13 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $2.18 | 6.97x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.17B × (1−24%) / WACC 8.8% → EPV (no growth) |
| Residual Income | Asset | $4.75 | 3.20x | yes | BV $3.81 + 5yr PV of (ROE (TTM) 10.7% − Kₑ 9.3%) × BV; BV grows 6.9%/yr |
| Graham Number | Asset | $5.93 | 2.56x | yes | √(22.5 × EPS $0.41 × BVPS $3.81) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $8.50 | 1.79x | yes | EBITDA $0.72B × sector EV/EBITDA 8.0x |
| FCF Yield | Earnings | $7.71 | 1.97x | yes | FCF $483.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $13.23 | 1.15x | yes | EPS $0.41 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $2.85 | 5.33x | yes | BV $3.81 × (ROIC 6.6% / WACC 8.8%) |
| P/Sales Sector | Relative | $3.50 | 4.34x | yes | Revenue $1.57B × sector P/S 1.5x |
| PEG Fair Value | Relative | $15.38 | 0.99x | yes | EPS $0.41 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $4.43 | 3.43x | yes | EPS $0.41 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $95.0m |
| Net debt / NOPAT (after-tax) | -0.24x (net cash) |
| Net debt / operating income (pre-tax) | -0.19x (net cash) |
| Interest coverage | 12.3x |
| Share count CAGR (dilution) | 5.5% |
| Burning cash | no |
Bullet Takeaways
- Hecla is the largest silver producer in the United States, and its defining asset is Greens Creek in Alaska, where by-product credits from gold, lead, and zinc push the silver cash cost below zero; the 10-K records a cash cost after by-product credits of negative $1.75 per ounce, meaning the gold and base metals more than pay for the silver. Cash Cost, After By-product Credits, per Ounce $ (1.75 )
- The central risk is the one the company cannot control: metal prices, which the filing lists among factors that are largely beyond our control and are difficult to predict, and at today's price the market is paying roughly 21 times operating income, a multiple that needs the current silver and gold strength to persist for years.
- Watch the 2026 silver production guidance of 15.1 to 16.5 million ounces and the Keno Hill ramp; management has framed a pathway toward more than 20 million ounces annually, and the next prints show whether grade declines at Greens Creek offset the growth mines.
Bull Case
Valuing a silver miner is unlike valuing almost anything else, because the product sells at a price the company does not set and the cost of pulling it from the ground swings with what else comes up alongside it. That is where Hecla's bull case lives. At Greens Creek, its Alaskan flagship, the silver does not really carry a cost at all once the gold, lead, and zinc that come out of the same rock are credited against it. The annual report makes the point in its own arithmetic: a cash cost after by-product credits of negative $1.75 per ounce. Cash Cost, After By-product Credits, per Ounce $ (1.75 ) When the by-products pay for the mining, every dollar silver rises is close to pure margin.
The most recent quarter showed what that looks like in cash. Hecla reported Q1 2026 revenue of $411 million, net income from continuing operations of $165 million, and record free cash flow of $144 million, with Greens Creek alone generating $126 million of free cash flow at all-in sustaining costs that ran negative after credits. This is the rare cyclical that is throwing off real, bankable cash at the current point in the metal cycle rather than promising it. Trailing operating income near $690 million covers interest more than 19 times over, and the company sits on net cash of roughly $95 million against a liquidity position above $600 million.
The growth is optional rather than required, which is the right posture for a miner. Hecla holds two long-life cornerstone mines in Greens Creek and Lucky Friday, the latter a high-grade Idaho operation, and a third growth leg at Keno Hill in the Yukon. Management has described a path toward more than 20 million ounces of annual silver production through the Keno Hill ramp, a potential Midas restart in Nevada, and other opportunities, against 2026 guidance of 15.1 to 16.5 million ounces. An investor is buying a domestic, low-cost silver base that generates cash today and carries embedded volume upside that does not depend on issuing equity to fund it.
Bear Case
The advantage that makes Greens Creek so cheap to mine is also the one most exposed to erosion, and it erodes in two ways the bull case tends to underweight. The first is grade. Mines deplete their best ore first, and Hecla's own 2026 guidance points to lower milled grades at Greens Creek as the reason consolidated silver production is expected to slip modestly from the prior year. A cash cost of negative $1.75 per ounce is a function of high grade and strong by-product prices; as grade falls, the cost curve moves the wrong way, and the negative-cost story converts into an ordinary-cost story.
The second erosion is the one the company names directly and cannot manage. Hecla sells into prices set by global markets, and its 10-K lists metal prices among factors that are largely beyond our control and are difficult to predict, warning that if those prices fall below our production or cost levels the economics invert. The same filing notes that concentrate revenues are recorded at the time of shipment at forward prices for the estimated metal content, so the realized number depends on where silver and gold settle, not on where they sat when the rock was dug. Today's record free cash flow is a snapshot taken near a cycle high; sustainable earnings for a miner are almost never the peak ones.
That is what makes the price demanding. At roughly 21 times operating income, the market is paying for company-wide profitability to hold near its self-funding ceiling for close to seven years, and only the cash-flow methods reach that price at all; the asset-based, earnings-power, and peer-multiple lenses all read the stock as richly valued. Historically only about a quarter of comparable fast-growers sustained that pace for that long. A miner's earnings are leveraged to a price it does not control, its lowest-cost ounces are finite, and its share count has been rising at roughly 5.5% a year, diluting the per-share claim on those ounces. The bear case is not that Hecla is a bad business; it is that the price is underwriting a cycle high as if it were the new baseline.
Valuation
A miner's profit is the product of two numbers it controls poorly: the metal price and the ore grade. That makes any single-multiple read fragile, because today's operating margin near 42% reflects strong silver and gold against high-grade ore, and neither is guaranteed to hold. The right way to read the price is as a bet on duration. At about $16 (June 27, 2026) a share the market is paying roughly 21 times operating income, which works out to company-wide profitability holding near its self-funding ceiling for close to seven years. Stated plainly, the price assumes the good part of the cycle lasts most of a decade.
The families of valuation method line up in a way that says the same thing from a different angle. The asset-based, earnings-power, and peer-multiple approaches all read the stock as richly valued; only the growth-and-cash-flow methods reach the current price, and they get there by extending today's cash generation forward. When only the forward lens reaches the price and the static lenses sit below it, the premium is a bet on durable cash compounding rather than on cheapness. For a commodity producer that is a strong claim, because the static methods are pricing the average through a cycle while the forward method is crediting the peak.
Where the bet has a genuine floor is the balance sheet. Hecla carries net cash of about $95 million, liquidity above $600 million, and trailing operating income covering interest more than 19 times over. One measurement note worth holding: the trailing operating income read from the quarterly filings runs below the record-basis figure the headline multiple uses, a gap that reflects two different accounting windows rather than an error, so the 21-times figure should be treated as one solve under one set of assumptions, not a precise fact. What is precise is the cash position and the coverage. The downside is bounded by a financially sound, low-cost domestic producer; the upside requires the metal cycle to cooperate for years, and that is the assumption the price rests on.
Catalysts
The Q1 2026 print, reported in early May, set a high bar. Hecla delivered revenue of $411 million, up sharply year over year, net income from continuing operations of $165 million at $0.25 per share, adjusted EBITDA of $265 million, and record free cash flow of $144 million. Silver production reached 3.9 million ounces, with Greens Creek contributing 2.2 million ounces of silver and 13,000 ounces of gold at all-in sustaining costs that ran negative after by-product credits, and Lucky Friday adding 1.2 million ounces. Keno Hill produced 0.5 million ounces, held back by reduced power supply from Yukon Energy during extreme cold and by lower milled grade, a reminder of the operational fragility at the growth mine.
The forward agenda is volume and grade. The company reiterated 2026 silver production guidance of 15.1 to 16.5 million ounces, modestly below the prior year on expected lower grades at Greens Creek, while pointing to a pathway above 20 million ounces annually through the Keno Hill ramp, a potential Midas restart in Nevada, and other growth options. The next earnings reports are the checkpoints on whether Keno Hill stabilizes and whether the Greens Creek grade decline is gradual or steep. Underneath all of it sits the metal price itself, the single variable that most moves the thesis and the one the company cannot influence.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- CDE (COEUR MINING, INC.)
- FY2025 10-K: …liabilities at the date of its financial statements, the allocation of fair value to assets and liabilities assumed in connection with business combinations, the reported amounts of revenue and expenses during the reporting period, and mined reserves. There can be no assurance that actual results will not differ from…
- FY2025 10-K: …the State of Delaware and changed its name to Coeur Mining, Inc. Coeur's corporate headquarters are in Chicago, Illinois. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Risks and uncertainties As a mining company, the revenue, profitability and future rate of growth of the Company are substantially dependent on…
- PAAS (Pan American Silver Corp.)
- (no filing in the citation store)
- MUX (McEWEN INC.)
- FY2025 10-K: …basis. Such competition may result in our Company being unable not only to acquire desired properties, but to recruit or retain qualified employees or to acquire the capital necessary to fund our operation and advance our properties. Our inability to compete with other companies for these resources would have a…
- FY2025 10-K: …characteristics of the individual mines or projects within a geographic region are not alike, or by investee for those which are considered a reportable segment. As a result, these operating segments also represent the Company's reportable segments. The CODM reviews segment income or loss, defined as gold and silver…
- HMY (HARMONY GOLD MINING COMPANY LIMITED)
- FY2025 20-F: …- Holistic health and wellness " on pages 141 to 153 . Mining companies face strong competition and industry consolidation The mining industry is competitive in all of its phases. We compete with other mining companies and individuals for specialised equipment, components and supplies necessary for exploration and…
- FY2025 20-F: . These factors could materially and adversely affect our financial and operating results. We compete with mining and other companies for key human resources with critical skills and our inability to retain key personnel could have an adverse e ffect on our business The risk of losing senior management or being unable…
- AGI (ALAMOS GOLD INC.)
- (no filing in the citation store)
- KGC (KINROSS GOLD CORP)
- (no filing in the citation store)
- BVN (BUENAVENTURA MINING CO INC)
- FY2025 20-F: …services. - Rental of mining concessions (until July 2024). - Holding of investment in shares. - Industrial activities. - Purchase and sale of mineral (Trading). F-93 Table of Contents Notes to the consolidated financial statements (continued) The accounting policies used by the Group in reporting segments…
- FY2025 20-F: …borrowing costs. Inventories are classified as current or non - current depending on the length of time that management estimates will be needed to reach the production state of concentrate extraction for each mining unit. The current portion of the inventories is determined based on the expected amounts to be…
- CCJ (Cameco Corp)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 earnings call