Where Will First Majestic Silver Stock Be in 3 Years?

Shares of First Majestic Silver (NYSE: AG) have risen by more than 230% over the past year, but are also down nearly 30% from their 52-week high. That's an important dichotomy to consider as you examine this precious metals miner. In three years, the company will likely be better positioned as a business, but that doesn't mean the stock will be an attractive investment.

Silver is First Majestic Silver's big story

First Majestic Silver is very clear that it is the precious metals miner with the most exposure to silver. The metal accounted for around 58% of revenues in 2025, with all precious metals totaling 90% of revenues. Silver accounts for more of the company's top-line than it does for any of its closest precious metals peers.

Image source: Getty Images.

First Majestic Silver's exposure to silver has been a big positive for the stock over the past year, as the metal's price has skyrocketed. In fact, the price of silver has risen even more dramatically than the price of gold. That is a double edge sword, however, because silver has also fallen more dramatically as investor enthusiasm for precious metals has cooled off. It is fairly normal for silver to be more volatile than gold over time.

That's the industry backdrop you need to keep in mind as you consider where First Majestic Silver's stock will be in three years.

First Majestic is "leveraging high silver prices"

To the company's credit, it is attempting to capitalize on high silver prices. And it is rewarding shareholders, as well. For example, it is investing in its business to increase production while it is generating extra cash flow to fund capital investments. That should position the company well for the future, as a business. Meanwhile, it just announced plans to increase its dividend, going from a payout model of 1% of revenues to 2%. While that's probably not enough to interest dividend investors, the company is clearly attempting to share the benefits of today's high silver prices.

That said, the company's stock and its underlying business are two different things. The company may be in a much better position in three years, but the stock's price will still be heavily influenced by silver prices. Which is why investors need to consider both the huge price advance over the past year and the more recent drawdown, which is also fairly large. Silver prices tend to drive investor sentiment around the stock, as is the case with most precious metals miners.

If silver continues to fall, First Majestic Silver will likely follow

Unless you believe silver prices are heading dramatically higher again, First Majestic Silver's stock could easily let you down as an investment. And if history is any guide, the price of silver has more room to fall before the current drawdown is over. Tread carefully with First Majestic Silver. In three years, the business may be more attractive, but the stock price might not be.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.