TMC the metals (TMC) is back in focus after the National Oceanic and Atmospheric Administration said the company’s consolidated application for a deep sea exploration and commercial recovery permit is in substantial regulatory compliance.

That regulatory milestone has arrived after a volatile period, with the latest share price at $5.97 and a 1 year total shareholder return of about 220% alongside a very large 3 year total shareholder return. This comes even as recent 30 and 90 day share price returns have been negative, suggesting strong longer term momentum with some near term cooling as investors reassess both growth potential and regulatory risk.

If this deep sea mining news has you thinking more broadly about critical materials, it could be worth scanning opportunities in 29 best rare earth metal stocks as a starting point for further research.

With TMC still loss making, trading at $5.97 and sitting at a very large 3-year total shareholder return, the key question now is whether today’s price reflects blue sky expectations or if the market is still underestimating its future growth.

Most Popular Narrative: 47% Undervalued

At a last close of $5.97 against a most-followed narrative fair value of $11.20, TMC is framed as materially undervalued, with that view tightly linked to future permitting, cash generation and critical mineral exposure.

The pre feasibility study and initial assessment outline a large resource with an estimated combined NPV of US$23.6b, targeted steady state revenue of about US$600 per dry ton and an EBITDA margin per ton of roughly 43%. If the company moves closer to these project economics while remaining in the first quartile of the cost curve, that cost position could support resilient margins and long term EBITDA and earnings power.

Want to see how an early stage, zero revenue miner gets to that kind of valuation? The narrative leans on steep revenue build, robust margins and a premium future earnings multiple. Curious which assumptions really carry the fair value story, and how sensitive it is if they shift?

Result: Fair Value of $11.20 (UNDERVALUED)

However, this story still depends heavily on securing a NOAA Commercial Recovery Permit and on actual project costs and recoveries aligning with the US$23.6b NPV assumptions.

Next Steps

With all that in mind, are you leaning toward the bull case or the bear case here, and how quickly do you want to firm up your view? It could be worth weighing both the caution flags and the upside signals in the data, starting with 2 key rewards and 4 important warning signs.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.