FSM

We rate FORTUNA MINING CORP. (FSM) as a Buy with a composite score of 67.0/100 at a current price of $13.37. The stock scores above average across the majority of our six quantitative factors and ranks #196 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in value (92th percentile) and quality (80th percentile), which together account for the majority of the composite score. All factors score above the 40th percentile, indicating no material weakness in the quantitative profile. We assign a Narrow Moat rating (61/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

FORTUNA MINING CORP. holds an above-average position (#20 of 50) within the Mining sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 67.0/100 places it at rank #196 in our full 7,333-stock universe. At $1.3B in market capitalization, FORTUNA MINING CORP. is a small-cap player in the Mining space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 26% and momentum in the 71th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 41th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 32% (-10.8pp vs sector) narrow to operating margins of 21% (+9.2pp vs sector) and net margins of 13.4%, yielding a gross-to-net conversion rate of 41%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $13.37, FORTUNA MINING CORP. appears undervalued relative to its fundamentals. Our value factor score of 92/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 31.8x (a 131% premium to the sector median of 13.7x), EV/EBITDA of 2.0x (discounted to peers), P/B of 2.7x, P/S of 0.9x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Low uncertainty rating to FORTUNA MINING CORP.. The company exhibits strong financial stability with a beta of 0.74, conservative leverage (12% D/E), and a stability factor in the 52th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 52th percentile with quality at the 80th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: conservative leverage (12% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate FORTUNA MINING CORP.'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 40.4%, disciplined leverage (12% D/E). Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — FORTUNA MINING CORP. meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. We note that the combination of 26.8% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, FORTUNA MINING CORP. receives a Buy rating with a composite score of 67.0/100 (rank #196 of 7,333). Our quantitative framework assigns a Narrow Moat (61/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 67/100.

Our analysis supports a constructive view on FORTUNA MINING CORP.. The combination of identifiable competitive advantages, low uncertainty, and exemplary capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.