PSLV

We rate Sprott Physical Silver Trust (PSLV) as a Buy with a composite score of 69.4/100 at a current price of $28.82. The stock scores above average across the majority of our six quantitative factors and ranks #109 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in momentum (98th percentile) and quality (82th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (17th percentile) and stability (30th percentile) tempers our overall conviction. We assign a Narrow Moat rating (52/100), Medium 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.

Sprott Physical Silver Trust holds a top-quartile position (#4 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 69.4/100 places it at rank #109 in our full 7,333-stock universe. At $5.0B in market capitalization, Sprott Physical Silver Trust is a mid-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 1644% and momentum in the 98th 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 17th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 100% (+23.5pp vs sector) narrow to operating margins of 100% (+83.0pp vs sector) and net margins of 100.0%, yielding a gross-to-net conversion rate of 100%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $28.82, Sprott Physical Silver Trust appears undervalued relative to its fundamentals. Our value factor score of 80/100 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 EV/EBITDA of 5.4x (discounted to peers), P/B of 3.4x, P/S of 5.4x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a Medium uncertainty rating to Sprott Physical Silver Trust. The stock presents a balanced risk profile: below-average price stability (30th percentile) and low beta of 0.48 — while defensive, this may indicate limited upside participation in bull markets. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: below-average price stability (30th percentile); low beta of 0.48 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 30th percentile and quality factor at the 82th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 100% provide a buffer against cost pressures; conservative leverage (0% 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 Sprott Physical Silver Trust's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 61.7%, disciplined leverage (0% D/E), best-in-class net margins of 100.0%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Sprott Physical Silver Trust 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 62.8% 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, Sprott Physical Silver Trust receives a Buy rating with a composite score of 69.4/100 (rank #109 of 7,333). Our quantitative framework assigns a Narrow Moat (52/100, trend: stable), Medium uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 61/100.

Our analysis supports a constructive view on Sprott Physical Silver Trust. The combination of identifiable competitive advantages, medium 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.