First Majestic Silver Corp. has proven to be one of the standout performers in the market for 2025, with its shares soaring dramatically since the start of the year. Prior to the recent trading session, the stock had escalated by more than 217%, a remarkable appreciation driven largely by prevailing precious metals market conditions. However, on this trading day, the shares experienced a correction as silver prices declined sharply.
During today's session, First Majestic's stock value contracted by roughly 4.1%, trimming an initial loss which approached 6.9% earlier in the day. This pullback in the share price reflects the price movement in the underlying commodity markets, with silver in particular losing much of its overnight gains.
The precious metals rally, which had reached a peak of nearly $83 per ounce in overnight trading for silver, reversed course during regular market hours. By around 1:30 p.m. ET, silver prices had fallen below the $71 per ounce mark. This current trading level still represents a significant premium compared to silver's price at the same time last year, which was approximately $30 per ounce.
In parallel, gold prices also softened during the day, declining to an approximate value of $4,322 per ounce as measured at 10:30 a.m. ET. These movements contribute to the fluctuating investor sentiment for companies heavily involved in precious metals extraction and sales.
First Majestic derives the bulk of its revenue from silver and gold sales despite also generating income through zinc and lead. Specifically, in the first three quarters of 2025, silver accounted for 57% of the company's revenue, while gold contributed 33%. Given the prominent share of precious metals in its sales mix, fluctuations in the prices of silver and gold markedly impact the company’s financial performance and, consequently, its stock valuation.
The relationship between First Majestic’s share price and precious metals prices remains closely correlated, which explains the stock's sensitivity to recent declines in silver and gold prices. Nevertheless, even with the drop today, shares of First Majestic remain notably elevated from their levels prior to 2025.
For investors interested in positions within the silver mining sector, the current pricing of First Majestic stock may present an appealing entry point. Evaluations based on operating cash flow suggest that the shares are currently trading at a multiple of approximately 21.7 times. This multiple is lower than the company’s five-year average cash flow multiple of 24.9, indicating a potential relative valuation discount compared to historical norms. Such metrics offer insight into the stock's valuation dynamics amid fluctuating commodity prices.
In summary, despite some retreat in share value during today's trading session, First Majestic remains a prominent and influential player in precious metals markets. Its stock's substantial increase earlier in the year reflects favorable conditions, although it remains vulnerable to the inherent volatility of commodity prices that shape its revenue and investor returns.