First Majestic Silver Heads Into Q2 Print With Borrow Market Fully Relaxed

AG reports Q2 results on July 31 against a backdrop of loose lending conditions and a stock that has given back nearly 8% over the past month — a softer setup than the silver price alone might suggest.

The lending market is as uncrowded as it has been all year. Availability has ballooned to nearly 4,874% — meaning the pool of shares available to borrow dwarfs current short positions by almost 49 to one. That stands well above even the 52-week minimum availability of 269%, reflecting a dramatic loosening of borrow conditions over recent months. Borrowing costs confirm the picture: the cost to borrow is running at just 0.52%, down roughly 27% on the month. Short interest itself is modest at 1.5% of the free float, and has drifted only marginally higher over the week. There is no meaningful squeeze pressure in the lending market heading into the print.

The stock's own price action tells a more complicated story. AG closed at CAD 21.93 on July 30, reclaiming 2.4% on the day but still sitting 8.3% below where it traded a month ago. Most TSX silver peers recovered similarly on the day — PAAS gained 3.1%, FVI 4.6%, and SVM 5.3% — but on the week, First Majestic lagged all three, losing 5.3% while Fortuna and Agnico Eagle (AEM) each added more than 3%. That underperformance is notable: it suggests stock-specific rather than sector-wide pressure in the run-up.

The bull and bear cases pivot on how the company has converted surging revenue into earnings quality. A recent ORTEX note flagged a 113% year-on-year sales increase and strong free cash flow margins — the growth story is not in dispute. But momentum has deteriorated sharply, and EPS momentum scores rank in just the 14th and 15th percentiles on 30- and 90-day horizons. The most recent earnings event, in May, produced a modest 1.9% one-day gain that subsequently unravelled into a 19.9% five-day decline — a sobering precedent for bulls expecting the silver rally to carry the stock. The ORTEX short score has eased to 28.3, consistent with a name where conviction on the short side is low but enthusiasm on the long side has also faded. EV/EBITDA has edged up to 6.9x over the month even as the price fell, implying multiple expansion driven by earnings compression rather than re-rating.

The Q2 print is therefore less a test of whether First Majestic is growing and more a question of whether the company can deliver margin and earnings quality that arrests the widening gap between its revenue trajectory and its deteriorating momentum scores.