Ivanhoe Electric (IE) drew fresh attention after signing a Collaboration and Exploration Agreement with Sociedad Química y Minera de Chile, with SQM committing at least US$9 million to copper exploration in northern Chile over three years.

The SQM agreement lands at a time when momentum in Ivanhoe Electric’s shares has been strong, with a 30 day share price return of 14.66% and a 90 day share price return of 37.90%. Over the longer term, the 1 year total shareholder return of 214.66% and 3 year total shareholder return of 45.81% point to a stock where sentiment has already shifted materially, and the recent collaboration may be reinforcing that trend for investors watching copper focused explorers.

If this agreement has you thinking about where growth focused capital might head next, it could be worth scanning fast growing stocks with high insider ownership for other companies that combine strong momentum with aligned insider interests.

After such strong recent returns and a price of US$19.32 that sits close to the current analyst target of about US$21.92, the key question is whether Ivanhoe Electric is still mispriced or if markets are already incorporating expectations of future growth.

Preferred Price-to-Book of 10x: Is it justified?

Ivanhoe Electric trades on a P/B of 10x compared with a peer and industry average of 2.7x, so the market is currently paying a substantial premium to book value.

P/B looks at the share price relative to the company’s net assets. It is often used for early stage or asset heavy businesses where earnings are still negative. For a copper focused explorer with $3.68m of revenue and a net loss of $54.979m, a high P/B usually signals that investors are placing considerable value on future project potential rather than current financial results.

That 10x P/B multiple stands well above both the peer group and the wider US Metals and Mining industry at 2.7x, which is a strong gap. Without a fair ratio estimate to point to a level the P/B could move towards, the current valuation mainly reflects how much optimism the market is pricing into exploration assets and forecast revenue growth rather than present profitability.

Result: Price-to-book of 10x (OVERVALUED)

However, you still have to weigh exploration risk and ongoing net losses of US$54.979m, which could pressure sentiment if projects or funding plans disappoint.

Build Your Own Ivanhoe Electric Narrative

If you see the data differently or prefer to piece together your own view from the ground up, you can build a full Ivanhoe Electric story in just a few minutes, starting with Do it your way

A great starting point for your Ivanhoe Electric research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

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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.