SSR MINING INC (NASDAQ:SSRM): A GARP Candidate with Strong Growth and Valuation

For investors looking to balance the search for growth with a degree of caution, the Growth At a Reasonable Price (GARP) method presents a viable middle path. This method tries to find companies showing good expansion potential, but whose shares are not valued at a level that assumes all future success. By concentrating on stocks with good growth paths that also show fair prices and acceptable basic financial condition, investors may reduce some of the risks found in pure growth investing. One method for finding such chances is the "Affordable Growth" screen, which selects for stocks with high growth ratings, along with acceptable scores in profitability, financial condition, and price.

SSR MINING INC (NASDAQ:SSRM) recently appeared through such a screening method, receiving an overall basic rating of 6 out of 10. A detailed look at its detailed fundamental report shows a profile that matches the main ideas of affordable growth, especially through its high scores in Growth (8/10) and Valuation (9/10).

A Strong Valuation Profile

The valuation argument for SSR Mining is especially notable, which is a key part for any GARP method. The company seems notably low-priced compared to both its industry and the wider market, suggesting the market may not be completely valuing its possibilities. Important measures supporting this view include:

• Good Earnings Multiples: SSRM trades at a Price/Earnings (P/E) ratio of 17.49, which is less expensive than 86% of similar companies in the Metals & Mining industry and under the current S&P 500 average. More revealing is its forward P/E ratio of 6.58, which is lower than almost 95% of industry rivals.
• Good Cash Flow Valuation: The company's Price/Free Cash Flow ratio also shows a low price compared to most of its industry.
• Growth Adjustment: The low PEG ratio, which modifies the P/E for expected growth rates, further indicates that the stock's price may not fully reflect its planned earnings increase.

This mix of low multiples against good growth expectations is exactly what affordable growth screens try to find, as it offers a possible buffer not present in high-priced growth stocks.

Solid Growth Path

A fair price alone is not enough; the "growth" part must be present and believable. SSR Mining's report notes good momentum and a positive forecast.

• Recent Results: Over the last year, the company has posted strong growth, with Revenue rising by 30.30% and Earnings Per Share (EPS) growing by 58.44%.
• Increasing Future Forecasts: Analyst estimates point to an even better period ahead. Revenue is expected to increase at an average rate of almost 33% each year, while EPS is predicted to grow by over 71% per year on average. The report states that these growth rates show a rise from the past several years.

This forward-looking growth profile is important, as the GARP method depends on the continuation of that expansion to support and eventually exceed the current share price.

Supporting Basics: Profitability and Condition

While growth and valuation are the main numbers for this screen, the method also needs "acceptable" scores in profitability and financial condition to confirm the company has the operational soundness and steadiness to achieve its plans. SSR Mining's scores here are satisfactory, though they show points of both strength and concern.

Profitability (Rating: 6/10): The company shows good operational efficiency. Its Gross Margin of 46.52% and Operating Margin of 27.14% rate well within the competitive mining industry. Returns on Assets, Equity, and Invested Capital are all acceptable and showing recent gain. However, the report notes a drop in the Operating Margin over recent years and a three-year average Return on Invested Capital that is behind the industry, reducing the overall profitability score.

Financial Health (Rating: 5/10): This is the area with the most clear points of attention. On the good side, SSRM keeps a very low Debt/Equity ratio of 0.04 and a good Current Ratio, showing acceptable short-term cash availability and a careful balance sheet structure. The significant note of care comes from its Altman-Z score of 1.69, which indicates financial pressure and raises bankruptcy risk compared to more stable firms. This mixed view in financial condition shows why the affordable growth screen selects for "acceptable" condition rather than high performance, it tries to avoid the weakest companies while recognizing that high-growth firms can sometimes have higher financial risk.

Conclusion

SSR Mining presents an example of the balances and possibilities found in the affordable growth method. The company's very strong valuation measures and increasing growth forecasts make it a notable candidate for investors looking for GARP stocks. Its acceptable profitability gives a base for this growth. However, the noted concerns about its financial condition score, particularly the warning shown by the Altman-Z score, highlight the importance of the screening requirements. The method deliberately needs a minimum level of condition and profitability to filter out companies whose growth may not last due to financial weakness.

For investors wanting to review other companies that meet similar standards of good growth, fair valuation, and acceptable basics, more results from the Affordable Growth screen can be found here.

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Disclaimer: This article is for information only and does not make up financial guidance, a suggestion, or an offer or request to buy or sell any securities. The review is based on data and ratings given by outside sources. Investors should do their own separate research and talk with a qualified financial advisor before making any investment choices. Past results are not a guide for future outcomes.